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What changed in OneMain Holdings, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of OneMain Holdings, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+285 added−309 removedSource: 10-K (2024-02-13) vs 10-K (2023-02-10)

Top changes in OneMain Holdings, Inc.'s 2023 10-K

285 paragraphs added · 309 removed · 236 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

72 edited+10 added−17 removed23 unchanged
Biggest changeWe offer the following optional credit insurance products to our customers: • Credit life insurance — Insures the life of the borrower in an amount typically equal to the unpaid balance of the finance receivable and provides for payment to the lender of the finance receivable in the event of the borrower’s death. • Credit disability insurance — Provides scheduled monthly loan payments to the lender during borrower’s disability due to illness or injury. • Credit involuntary unemployment insurance — Provides scheduled monthly loan payments to the lender during borrower’s involuntary unemployment.
Biggest changeWe also offer optional credit insurance products to our customers, including credit life insurance, credit disability insurance, and credit involuntary unemployment insurance. Credit life insurance insures the borrower’s life, paying the outstanding finance receivable upon the borrower’s death.
PRIVACY, DATA PROTECTION, AND CYBERSECURITY Regulatory and legislative activity in the areas of privacy, data protection, and cybersecurity continues to increase worldwide. We have established policies and practices that provide a framework for compliance with applicable privacy, data protection, and cybersecurity laws and work to meet evolving customer privacy expectations.
PRIVACY, DATA PROTECTION, AND CYBERSECURITY Regulatory and legislative activity in the areas of privacy, data protection, and cybersecurity continues to increase worldwide. We have established policies and practices that provide a framework for compliance with applicable privacy, data protection, and cybersecurity laws and work to meet evolving customer expectations.
REGULATION Federal Laws Various federal laws and regulations govern loan origination, servicing, and collections, including: • the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") (which, among other things, created the Consumer Finance Protection Bureau (“CFPB”)); • the Equal Credit Opportunity Act (which, among other things, prohibits discrimination against creditworthy applicants) and Regulation B, which implements this statute; • the Fair Credit Reporting Act (which, among other things, governs the use of credit bureau reports and reporting information to credit bureaus) and Regulation V, which implements this statute; • the Truth in Lending Act (which, among other things, governs disclosure of applicable charges and other terms of consumer credit) and Regulation Z, which implements this statute; • the Fair Debt Collection Practices Act (which, among other things, governs practices in collecting certain debts) and Regulation F, which implements this statute; • the Gramm-Leach-Bliley Act (which, among other things, governs the handling of personal financial information) and Regulation P, which implements this statute; • the Military Lending Act (which, among other things, governs certain consumer lending to active-duty military servicemembers and their spouses and covered dependents, and limits the interest rate and certain fees, charges and premium they may be charged on certain loans); • the Servicemembers Civil Relief Act (which, among other things, can impose limitations on the interest rate and the servicer’s ability to collect on a loan originated with an obligor who is on active-duty status and up to nine months thereafter); • the Real Estate Settlement Procedures Act (which regulates the making and servicing of closed end residential mortgage loans) and Regulation X, which implements this statute; • the Federal Trade Commission’s Consumer Claims and Defenses Rule, also known as the “Holder in Due Course” Rule (which, among other things, allows a consumer to assert, against the assignees of certain credit contracts, certain claims that the consumer may have against the originator of the credit contracts); and • the Federal Trade Commission Act (which, among other things, prohibits unfair and deceptive acts and practices).
REGULATION Federal Laws Various federal laws and regulations govern credit origination, servicing, and collections, including: • the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") (which, among other things, created the Consumer Finance Protection Bureau (“CFPB”)); • the Equal Credit Opportunity Act (which, among other things, prohibits discrimination against creditworthy applicants) and Regulation B, which implements this statute; • the Fair Credit Reporting Act (which, among other things, governs the use of credit bureau reports and reporting information to credit bureaus) and Regulation V, which implements this statute; • the Truth in Lending Act (which, among other things, governs disclosure of applicable charges and other terms of consumer credit) and Regulation Z, which implements this statute; • the Fair Debt Collection Practices Act (which, among other things, governs practices in collecting certain debts) and Regulation F, which implements this statute; 13 Table of Contents • the Gramm-Leach-Bliley Act (which, among other things, governs the handling of personal financial information) and Regulation P, which implements this statute; • the Military Lending Act (which, among other things, governs certain consumer lending to active-duty military servicemembers and their spouses and covered dependents, and limits the interest rate and certain fees, charges and premium they may be charged on certain loans); • the Servicemembers Civil Relief Act (which, among other things, can impose limitations on the interest rate and the servicer’s ability to collect on a loan originated with an obligor who is on active-duty status and up to nine months thereafter); • the Real Estate Settlement Procedures Act (which regulates the making and servicing of closed end residential mortgage loans) and Regulation X, which implements this statute; • the Federal Trade Commission’s Consumer Claims and Defenses Rule, also known as the “Holder in Due Course” Rule (which, among other things, allows a consumer to assert, against the assignees of certain credit contracts, certain claims that the consumer may have against the originator of the credit contracts); and • the Federal Trade Commission Act (which, among other things, prohibits unfair and deceptive acts and practices).
The extent of such regulation varies by product and by state, but relates primarily to the following: • licensing; • conduct of business, including marketing and sales practices; • periodic financial and market conduct examination of the affairs of insurers; • form and content of required financial reports; • standards of solvency; • limitations on the payment of dividends and other affiliate transactions; • types of products offered; • approval of policy forms and premium rates; • formulas used to calculate any unearned premium refund due to an insured customer; • permissible investments; • deposits of securities for the benefit of policyholders; • reserve requirements for unearned premiums, losses, and other purposes; and • claims processing.
The extent of such regulation varies by product and by state, but relates primarily to the following: • licensing; • conduct of business, including marketing and sales practices; • periodic financial and market conduct examination of the affairs of insurers; 15 Table of Contents • form and content of required financial reports; • standards of solvency; • limitations on the payment of dividends and other affiliate transactions; • types of products offered; • approval of policy forms and premium rates; • formulas used to calculate any unearned premium refund due to an insured customer; • permissible investments; • deposits of securities for the benefit of policyholders; • reserve requirements for unearned premiums, losses, and other purposes; and • claims processing.
All OneMain leaders and team members receive unconscious-bias training aimed at creating a positive, inclusive work environment. We require diverse candidates (women or minorities) to be considered for all leadership roles. This commitment to diversity begins with the Board, whose membership includes 50% ethnic or racial minorities and 25% women. OneMain’s 2021 U.S.
All OneMain leaders and team members receive unconscious-bias training aimed at creating a positive, inclusive work environment. We require diverse candidates (women or minorities) to be considered for all leadership roles. This commitment to diversity begins with the Board, whose membership includes 50% ethnic or racial minorities and 25% women. OneMain’s 2022 U.S.
The SEC’s website, www.sec.gov , contains these reports and other information that registrants (including OMH and OMFC) file electronically with the SEC. These reports are also available free of charge through our website, www.omf.com under “Investor Relations,” as soon as reasonably practicable after we file them with, or furnish them to, the SEC.
The SEC’s website, www.sec.gov , contains these reports and other information that registrants (including OMH and OMFC) file electronically with the SEC. These reports are also available free of charge through our website, www.onemainfinancial.com under “Investor Relations,” as soon as reasonably practicable after we file them with, or furnish them to, the SEC.
In addition, OMH's Code of Business Conduct and Ethics (the “Code of Ethics”), Code of Ethics for Principal Executive and Senior Financial Officers (the “Financial Officers’ Code of Ethics”), Corporate Governance Guidelines and the charters of the committees of the Board are posted on our website at www.omf.com under “Investor Relations” and printed copies are available upon request .
In addition, OMH's Code of Business Conduct and Ethics (the “Code of Ethics”), Code of Ethics for Principal Executive and Senior Financial Officers (the “Financial Officers’ Code of Ethics”), Corporate Governance Guidelines and the charters of the committees of the Board are posted on our website at www.onemainfinancial.com under “Investor Relations” and printed copies are available upon request .
We strive to recruit, train, and retain outstanding, diverse team members that believe in our mission, live our values, and go the extra mile for our customers. Our inclusive culture allows team members at all levels of the organization to further their careers and achieve both their personal and professional goals.
Diversity and Inclusion We strive to recruit, train, and retain outstanding, diverse team members that believe in our mission, live our values, and go the extra mile for our customers. Our inclusive culture allows team members at all levels of the organization to further their careers and achieve both their personal and professional goals.
Item 1. Business. BUSINESS OVERVIEW This report combines the Annual Reports on Form 10-K for the year ended December 31, 2022 for OneMain Holdings, Inc. (“OMH”), a publicly held financial service holding company, and its wholly owned direct subsidiary, OneMain Finance Corporation (“OMFC”).
Item 1. Business. BUSINESS OVERVIEW This report combines the Annual Reports on Form 10-K for the year ended December 31, 2023 for OneMain Holdings, Inc. (“OMH”), a publicly held financial service holding company, and its wholly owned direct subsidiary, OneMain Finance Corporation (“OMFC”).
Our centralized operational functions support the following: • soliciting business; • processing payments; • originating personal loans; • issuing and servicing optional insurance products; • servicing of certain delinquent personal loans; • managing bankruptcy process for loans in Chapter 7, 11, 12 and 13 proceedings; • managing litigation requests against delinquent borrowers; • tracking collateral protection insurance; • repossessing and re-marketing of titled collateral; • supervising sales and retention of customers; and • managing charge-off recovery operations.
Our central operational functions support the following: • soliciting business; • processing payments; • originating personal loans; • issuing and servicing optional products; • servicing of certain delinquent personal loans; • managing bankruptcy process for loans in Chapter 7, 11, and 13 proceedings; • managing litigation requests against delinquent borrowers; • tracking collateral protection insurance; • repossessing and re-marketing of titled collateral; • supervising sales and retention of customers; and • managing charge-off recovery operations.
The information on, or that is accessible through, our website is not incorporated by reference into this report. The website addresses listed in this Item are provided for the information of the reader and are not intended to be active links. 18 Table of Contents
The information on, or that is accessible through, our website is not incorporated by reference into this report. The website addresses listed in this Item are provided for the information of the reader and are not intended to be active links. 19 Table of Contents
There is a clear trend of increased state regulation on loan origination, servicing and collection, as well as more detailed reporting, more detailed examinations, and coordination of examinations among the states. State authorities also regulate and supervise our insurance business.
There is a clear trend of increased state regulation on credit origination, servicing and collection, as well as more detailed reporting, more detailed examinations, and coordination of examinations among the states. State authorities also regulate and supervise our insurance business.
OMH and OMFC are referred to in this report, collectively with their subsidiaries, whether directly or indirectly owned, as “the Company,” “OneMain,” “we,” “us,” or “our.” As one of the nation’s leaders in offering nonprime customers responsible access to credit, we: • provide responsible personal loan products; • offer credit card products; • offer optional credit insurance and other products; • offer a customer-focused financial wellness program; • service loans owned by us and third parties; • pursue strategic acquisitions and dispositions of assets and businesses, including loan portfolios or other financial assets; and • may establish joint ventures or enter into other strategic alliances.
OMH and OMFC are referred to in this report, collectively with their subsidiaries, whether directly or indirectly owned, as “the Company,” “OneMain,” “we,” “us,” or “our.” As one of the nation’s leaders in offering nonprime consumers responsible access to credit, we: • provide responsible personal loan products; • offer credit card products; • offer optional products; • offer a customer-focused financial wellness program; • service loans owned by us and third parties; • pursue strategic acquisitions and dispositions of assets and businesses; and • may establish joint ventures or enter into other strategic alliances.
We evaluate internal systems, processes, and controls to mitigate operational risk and control and monitor our businesses through a variety of methods including the following: • our operational policies and procedures that standardize various aspects of lending and collections; • our branch finance receivable systems control loan size, interest rates, maturity dates, and fees of our customers’ accounts; create loan documents specific to the state in which the branch location operates or to the customer’s location if the loan is made electronically through our centralized operations; and control cash receipts and disbursements; • our accounting personnel reconcile bank accounts, investigate discrepancies, and resolve differences; • our credit risk management system reports allow us to track individual branch location performance and to monitor lending and collection activities; • our privacy and information security incident response plan establishes a privacy and information security response team that responds to information security incidents by identifying, evaluating, responding to, investigating, and resolving information security incidents impacting our information systems; • our executive information system is available to headquarters and field operations management to review the status of activity through the close of business of the prior day; • our branch operations management structure, Regional Quality Coordinators, and Compliance Field Examination teams are designed to oversee a large, decentralized organization with succeeding levels of supervision and are staffed with experienced personnel; • our branch and central operations compensation plans are based on credit quality and compliance, and are regularly reviewed for consistency with overall corporate goals and customer service; • our compliance department assesses our compliance with federal and state laws and regulations and our internal policies and procedures; oversees training to ensure team members have a sufficient level of understanding of such laws, regulations, policies, and procedures that impact their job responsibilities; and manages our state regulatory examination process; • our Executive Office of Customer Care maintains our consumer complaint resolution and reporting process; and • our internal audit department audits our business for adherence to operational policies and procedures, and compliance with federal and state laws and regulations.
We evaluate internal systems, processes, and controls to mitigate operational risk and control and monitor our businesses through a variety of methods including the following: • our operational policies and procedures that standardize various aspects of lending and collections; • our branch finance receivable systems control loan size, interest rates, maturity dates, and fees of our customers’ accounts; create loan documents specific to the state in which the branch location operates or to the customer’s location if the loan is made electronically through our central operations; and control cash receipts and disbursements; • our accounting personnel reconcile bank accounts, investigate discrepancies, and resolve differences; • our credit risk management system reports allow us to track individual branch location performance and to monitor lending and collection activities; • our cybersecurity incident response plan establishes a team that responds to cybersecurity incidents by identifying, evaluating, investigating, resolving, and remediating incidents impacting our information and information systems; • our executive level reporting is available to headquarters and field operations management to review the status of activity through the close of business of the prior day; 12 Table of Contents • our branch operations management structure, Regional Quality Coordinators, and Compliance Field Examination teams are designed to oversee a large, decentralized organization with succeeding levels of supervision and are staffed with experienced personnel; • our branch and central operations compensation plans are based on credit quality and compliance, and are regularly reviewed for consistency with overall corporate goals and customer service; • our compliance department assesses our compliance with applicable federal and state laws and regulations and our internal policies and procedures; oversees training to ensure team members have an understanding of such laws, regulations, policies, and procedures that impact their job responsibilities; and manages our regulatory examination process; • our Executive Office of Customer Care maintains our consumer complaint resolution and reporting process; and • our internal audit department audits our business for adherence to operational policies and procedures, and compliance with federal and state laws and regulations.
State Laws Various state laws and regulations also govern loan originations, servicing, and collections. Many states have laws and regulations that are similar to the federal laws referred to above, but the degree and nature of such laws and regulations vary from state to state.
State Laws Various state laws and regulations also govern credit originations, servicing, and collections. Many states have laws and regulations that are similar to the federal laws referred to above, but the degree and nature of such laws and regulations vary from state to state.
Our consumer businesses are subject to the privacy, disclosure, and safeguarding provisions of the Gramm-Leach-Bliley Act ("GLBA") and Regulation P, which implements the statute.
Our consumer businesses are subject to the privacy, disclosure, and safeguarding provisions of the Gramm-Leach-Bliley Act (“GLBA”) and Regulation P, which implements the GLBA.
In December 2021, the Federal Trade Commission published amendments to its Safeguards Rule that prescribe more specific administrative and technical requirements for a financial institution’s information security program. Various states also have adopted laws, rules, and regulations pertaining to privacy and/or cybersecurity that may be as, or more stringent and expansive than federal requirements.
In December 2021 and October 2023, the Federal Trade Commission published amendments to its Safeguards Rule that prescribe more specific administrative and technical requirements for a financial institution’s cybersecurity program. Various states also have adopted laws, rules, and regulations pertaining to privacy and/or cybersecurity that may be as, or more stringent and expansive than federal requirements.
In April 2022, OMFC completed its first social securitization in which we issued $600 million principal amount of notes backed by personal loans made to individuals with mailing addresses containing zip codes in rural communities, with 75% of such loans made to borrowers with annual net income of $50,000 or less.
In April 2022, OMFC completed its first social securitization in which we issued notes backed by personal loans made to individuals with mailing addresses containing zip codes in rural communities, with 75% of such loans made to borrowers with annual net income of $50,000 or less.
We obtain a security interest in titled property for our secured personal loans. Our customers are primarily considered nonprime and therefore are a higher credit risk, and often require significantly higher levels of servicing than prime customers. As a result, we generally charge these customers higher interest rates.
We obtain a security interest in titled property for our secured personal loans. 11 Table of Contents Our customers are primarily considered nonprime and therefore a higher credit risk, who often require significantly higher levels of servicing than prime customers. As a result, we generally charge these customers higher interest rates.
Our branch network of approximately 1,400 locations in 44 states is staffed with expert personnel and is complemented by our online lending and servicing capabilities and centralized operations staff, which allow us to serve customers in person, digitally, and over the phone.
Our branch network of approximately 1,400 locations in 44 states is staffed with expert personnel and is complemented by our digital lending and servicing capabilities and central operations staff, which allow us to serve customers in person, digitally, and over the phone.
Using third party market data as of December 2022 and internally aligning to our current product offerings and customer credit scores, we estimate U.S. nonprime consumers collectively have approximately $1.2 trillion of outstanding borrowings in the form of personal loans, auto loans and leases, and credit cards. We believe this large market provides us with an attractive growth opportunity.
Using third party market data as of December 2023 and internally aligning to our current product offerings, we estimate U.S. nonprime consumers collectively have approximately $1.3 trillion of outstanding borrowings in the form of personal loans, auto loans and leases, and credit cards. We believe this large market provides us with an attractive growth opportunity.
In addition, we believe a diverse talent pool and inclusive work environment makes us stronger, helps us fulfill our Company’s mission, and meaningfully connects us with the customers and communities we serve.
We believe a diverse talent pool and inclusive work environment makes us stronger, helps us fulfill our Company’s mission, and connects us with the customers and communities we serve.
For additional information regarding our commitments to support our customers, communities, team members, and our corporate environment, please refer to our 2021 ESG report, which is available on our Investor Relations website. AVAILABLE INFORMATION OMH and OMFC file annual, quarterly, current reports, and other information with the SEC. OMH also files proxy statements.
For additional information regarding our commitments to support our customers, communities, team members, and our corporate environment, please refer to our 2022 ESG Report, which is available on our Investor Relations website. 18 Table of Contents AVAILABLE INFORMATION OMH and OMFC file annual, quarterly, current reports, and other information with the SEC. OMH also files proxy statements.
CORPORATE SOCIAL RESPONSIBILITY Our approach to corporate social responsibility (“CSR”) is a natural extension of our mission to continue to support and improve the financial well-being of our customers, communities, and team members. We are mindful of challenges faced by our customers and continue to prioritize offering them support through our borrower assistance programs.
Our approach to Impact is a natural extension of our mission to continue to support and improve the financial well-being of our customers, communities, and team members. We are mindful of challenges faced by our customers and continue to prioritize offering them support through our borrower assistance programs.
SEASONALITY See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Seasonality” included in this report for discussion of our seasonal trends. HUMAN CAPITAL Overview OneMain is dedicated to providing lending solutions to help hardworking Americans improve their financial well-being by offering products that are designed to be the starting point for their financial stability and growth.
SEASONALITY See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Seasonality” in Part II - Item 7 in this report for discussion of our seasonal trends. 16 Table of Contents HUMAN CAPITAL Overview OneMain is dedicated to providing credit solutions to help hardworking Americans improve their financial well-being by offering products that are designed to be the starting point for their financial stability and growth.
As part of our commitment to financial wellness, Credit Worthy by OneMain Financial is a $4 million commitment with strategic partner EVERFI, a global social-impact technology provider, to develop and distribute free, digital financial education to high schools nationwide over four academic school years. In 2022, we delivered the curriculum to more than 2,000 schools and 130,000 students.
As part of our commitment to financial wellness, Credit Worthy by OneMain Financial is a $4 million commitment with strategic partner EVERFI, a global social-impact technology provider, to develop and distribute free, digital financial education to high schools nationwide over four academic school years. Since program inception, we have delivered the curriculum to more than 3,400 schools and 275,000 students.
We also have proven analytics that allow us to have strong loss performance through economic cycles. We believe our deep understanding of local markets and customers, together with our proprietary underwriting process, sophisticated data analytics, and decisioning tools allow us to price, manage, and monitor risk effectively through changing economic conditions.
We believe our deep understanding of local markets and customers, together with our proprietary underwriting process, sophisticated data analytics, and decisioning tools allow us to price, manage, and monitor risk effectively through changing economic conditions.
While federal laws preempt similar state laws in some instances, many times compliance with state laws and regulations is still required. 14 Table of Contents In general, these additional state laws and regulations, under which we conduct a substantial amount of our lending business: • provide for state licensing and periodic examination of lenders and loan originators, including state laws adopted or amended to comply with licensing requirements of the federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (which, in some states, requires licensing of individuals who perform real estate loan modifications); • require the filing of reports with regulators and compliance with state regulatory capital requirements; • impose maximum term, amount, interest rate, and limit other charges; • impose consumer privacy rights and other obligations that may require us to notify customers, employees, state attorneys general, regulators, and others in the event of a security breach; • regulate whether and under what circumstances we may offer insurance and other optional products in connection with a lending transaction; and • provide for additional consumer protections.
In general, these additional state laws and regulations, under which we conduct a substantial amount of our lending business: • provide for state licensing and periodic examination of lenders and loan originators, including state laws adopted or amended to comply with licensing requirements of the federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (which, in some states, requires licensing of individuals who perform real estate loan modifications); • require the filing of reports with regulators and compliance with state regulatory capital requirements; • impose maximum term, amount, interest rate, and limit other charges; • create consumer privacy rights and impose obligations on how we collect, process, store, and share certain information, and may require us to notify customers, employees, state attorneys general, regulators, and others in the event of a security breach; • regulate whether and under what circumstances we may offer optional products in connection with a lending transaction; and • provide for additional consumer protections.
The increased oversight by these leaders reflects the Company’s commitment to monitoring ESG matters and risks for potential impact on the Company and the consumer lending industry, as well as potential opportunities that we may gain through proactive identification of ESG issues.
These senior executives each hold responsibility for different Impact workstreams. The increased oversight by these leaders reflects the Company’s commitment to monitoring Impact matters and risks for potential effects on the Company and the consumer lending industry, as well as potential opportunities that we may gain through proactive identification of Impact issues.
In addition, each year team members have the opportunity to provide candid feedback in an Employee Engagement Survey on how engaged they are and how enabled they feel in their roles at OneMain.
In addition, each year team members have the opportunity to provide candid feedback in an Employee Engagement Survey on how engaged they are and how enabled they feel in their roles at OneMain. As of December 31, 2023, 90% of team members participated in the annual Employee Engagement Survey.
We use proprietary modeling, along with data purchased from credit bureaus, alternative data providers, and our existing data/experience to acquire and develop new and profitable customer relationships. 10 Table of Contents Our digital platform allows current and prospective customers the ability to apply for and close a personal loan online, at www.omf.com .
We use proprietary modeling, along with data purchased from credit bureaus, alternative data providers, and our existing data/experience to acquire and develop new and profitable customer relationships. Our digital platform allows current and prospective customers the ability to apply for and close a personal loan online, at www.onemainfinancial.com . Our digital user experience includes video, chat, and co-browsing with customers.
Finally, we believe that integrity, transparency, and respect are at the heart of our success, and that these ethical values must inform every interaction we have with customers and with each other. Diversity and Inclusion At OneMain, diversity and inclusion lead the way for recruitment and retention.
Finally, we believe that integrity, transparency, and respect are at the heart of our success, and that these ethical values must inform every interaction we have with customers and with each other.
As of December 31, 2022, we had over 9,200 employees. Our commitment to help our community starts with our own team members. We believe in putting people first with our focus on recruiting, developing, and supporting our team members that reflect and celebrate the communities in which we operate.
As of December 31, 2023, we had approximately 9,100 employees. Our commitment to help our community starts with our own team members. We believe in putting people first with a focus on recruiting, developing, and supporting our team members, and celebrating the communities in which we operate.
OneMain maintains a Women’s Leadership Development program, a Diverse Talent Leadership program, a training program on mitigating unconscious bias for all team members, allyship training for managers, a Day of Inclusion virtual series, and partners with PFLAG, an organization dedicated to supporting, educating, and advocating for LGBTQ+ people and their families, to offer Straight for Equality development sessions.
OneMain maintains a Women’s Leadership Development program, a Diverse Talent Leadership program, and offers allyship training for managers. We also hold a virtual series of Day of Inclusion events and partner with PFLAG, an organization dedicated to supporting, educating, and advocating for LGBTQ+ people and their families, to offer Straight for Equality development sessions.
The investigation and enforcement provisions of Title X of the Dodd-Frank Act may adversely affect our business if the CFPB or one or more state attorneys general or state regulators believe that we have violated any federal consumer financial protection laws, including the prohibition in Title X against unfair, deceptive, or abusive acts or practices.
It is not known if or when the CFPB may consider reactivating the rulemaking process for the larger-participant rule for consumer installment loans. 14 Table of Contents The investigation and enforcement provisions of Title X of the Dodd-Frank Act may adversely affect our business if the CFPB or one or more state attorneys general or state regulators believe that we have violated any federal consumer financial protection laws, including the prohibition in Title X against unfair, deceptive, or abusive acts or practices.
Our social debt issuances reinforce our commitment to financial inclusion and providing underrepresented communities with access to safe, affordable credit. They also provide concrete and measurable funding vehicles to advance the Company’s social responsibility program.
Our social debt issuances reinforce our commitment to financial inclusion and providing underrepresented communities with access to safe, affordable credit. They also provide concrete and measurable funding vehicles to advance the Company’s Impact program. Additional information regarding our Social Bonds and Social Bond Framework is available on our Investor Relations website.
Our regulators are increasingly focused on ensuring that these policies and practices are adequate, including providing consumers with choices, if required, about how we use and share their information and ensuring that we appropriately safeguard their personal information and account access.
Our regulators are increasingly focused on the adequacy of these policies and practices, including with respect to providing consumers with choices about how we use and share their information, and the processes we take to safeguard their personal information and account access.
Our personal loan business comprises products and services that have performed well through various market conditions. Our personal loans are non-revolving, with a fixed rate, have fixed terms generally between three to six years, and are secured by automobiles, other titled collateral, or are unsecured. Our loans have no pre-payment penalties.
Our personal loans are non-revolving, with a fixed rate, have fixed terms generally between three to six years, and are secured by automobiles, other titled collateral, or are unsecured. Our loans have no pre-payment penalties. Credit cards are open-ended, revolving, with a fixed rate, and are unsecured.
The Dodd-Frank Act also gives the CFPB supervisory authority over entities that are designated as “larger participants” in certain financial services markets, including the auto financing market and the consumer installment lending market. On June 30, 2015, the CFPB published its final rule for designating “larger participants” in the auto financing market.
Currently, the CFPB has supervisory authority over the Company as a mortgage servicer. The Dodd-Frank Act also gives the CFPB supervisory authority over entities that are designated as “larger participants” in certain financial services markets, including the auto financing market and the consumer installment lending market.
We originate and service secured and unsecured personal loans, offer credit cards, and provide optional credit and non-credit insurance and related products through our branch and centralized operations as well as our digital platform. Personal loan origination and servicing, credit cards, and insurance products form the core of our operations.
We originate and service unsecured and secured personal loans, including auto finance, offer credit cards, and provide optional credit and non-credit insurance and other optional products through our branch and central operations, as well as our digital platform.
In 2022, we made a $50 million commitment to support minority depository institutions and a military veteran owned and operated investment bank supporting job placement and transition services for veterans.
We continue to advance our mission to improve the financial well-being of hardworking Americans, particularly those in underserved communities. In 2022, we made a $50 million commitment to support minority depository institutions and a military veteran owned and operated investment bank supporting job placement and transition services for veterans.
Our credit cards compete with many local, regional, and national issuers in the highly competitive credit card industry that seek to serve the same consumers that we serve. We believe that competition between credit card issuers occurs primarily on the basis of customer experience, price, credit limit, rewards programs, and service quality.
Our credit cards compete with many local, regional, and national issuers in the non-prime credit card industry. Competition between credit card issuers occurs primarily based on customer experience, price, credit availability, rewards programs, and service quality. We believe that we possess several competitive strengths that allow us to compete effectively with other lenders in our industry.
OneMain equips each team member at all levels of our organization with the tools and support, both personal and professional, to further their careers. We empower our employees to learn new skills, meet personalized development goals, and grow their careers. Team members are guided through their performance management with regular goal setting and coaching.
We empower our employees to learn new skills, meet personalized development goals, and grow their careers. Team members are guided through their performance management with regular goal setting and coaching. OneMain conducts regular employee trainings, including Continuing Professional Education and leadership development at each level.
We also utilize third-party debt collectors and will continue to be responsible for oversight of their procedures and controls, as they pertain to our collection activities. 13 Table of Contents The CFPB has enforcement authority with respect to various federal consumer protection laws for some providers of consumer financial products and services, such as any nonbank that it has reasonable cause to determine has engaged or is engaging in conduct that poses risks to consumers with regard to consumer financial products or services.
The CFPB has supervisory authority with respect to various federal consumer protection laws for some providers of consumer financial products and services, such as any nonbank that it has reasonable cause to determine has engaged or is engaging in conduct that poses risks to consumers with regard to consumer financial products or services.
The systems permit branch office management to review the individual and collective performance of branch locations for which they are responsible. CENTRALIZED OPERATIONS We continually seek to identify functions that could be more effective if centralized to achieve reduced costs or free our lending specialists to service our customers and market our products.
CENTRAL OPERATIONS We continually seek to identify functions that could be more effective if centralized to achieve reduced costs or free our lending specialists to service our customers and market our products.
These competitors are various types of financial institutions that operate within our geographic network and over the internet that offer similar products and services. We believe that competition between consumer installment lenders occurs primarily on the basis of customer experience, price, speed of service, flexibility of loan terms offered, and operational capability.
There are numerous local, regional, and national competitors that seek to serve the non-prime consumers and that operate within our geographic network or over the internet offering similar products and services. Competition between lenders occurs primarily on the basis of customer experience, price, speed of service, flexibility of loan terms offered, and operational capability.
We believe that we possess several competitive strengths that allow us to compete effectively with other lenders in our industry. We utilize an omnichannel operating model, including a digital lending footprint and a branch network rooted in local communities. Our national branch network serves as a proven distribution channel.
We utilize an omnichannel operating model, including a digital lending footprint and a branch network rooted in local communities. Our national branch network serves as a proven distribution channel. We also have proven analytics that allow us to have strong loss performance through economic cycles.
Our insurance business is conducted through our wholly owned insurance subsidiaries, American Health and Life Insurance Company (“AHL”) and Triton Insurance Company (“Triton”). AHL is a life and health insurance company licensed in 49 states, the District of Columbia, and Canada to write credit life, credit disability, and non-credit insurance products.
AHL is a life and health insurance company licensed in 49 states, the District of Columbia, and Canada to write credit life, credit disability, and non-credit insurance products. Triton is a property and casualty insurance company licensed in 50 states, the District of Columbia, and Canada to write credit involuntary unemployment, credit disability, and collateral protection insurance.
We provide origination, underwriting, and servicing of personal loans, primarily to nonprime customers. In addition, we offer two credit cards, BrightWay and BrightWay+, through a third-party bank partner from which we purchase the receivable balances.
We provide origination, underwriting, and servicing of personal loans. In addition, we offer two credit cards, BrightWay and BrightWay+, through a third-party bank partner from which we purchase the receivable balances. We believe we are well positioned for future growth with an experienced management team, proven access to the capital markets, and strong demand for consumer credit.
Our digital platform provides our current and prospective customers with the option of applying for our products via our website, www.omf.com . INDUSTRY AND MARKET OVERVIEW We operate in the consumer finance industry serving consumers who have limited access to credit from banks, credit card companies, and other traditional lenders.
INDUSTRY AND MARKET OVERVIEW We operate in the consumer finance industry serving consumers who have limited access to credit from banks, credit card companies, and other lenders.
With the adoption of this regulation, we are considered a larger participant in the auto financing market and are subject to supervision and examination by the CFPB of our auto loan business, consisting of loans for the purchase of autos, and refinances of such loans.
On June 30, 2015, the CFPB published its final rule for designating “larger participants” in the auto financing market. With the adoption of this regulation, we are considered a larger participant in the auto financing market and are subject to supervision and examination by the CFPB.
Our compensation and benefits package includes competitive pay, healthcare, retirement benefits, as well as paid time off and holidays, parental leave, disability benefits, military leave, and paid development and volunteer time off, along with other benefits and employee resources.
Our compensation and benefits package includes competitive pay, healthcare, retirement benefits, as well as paid time off and holidays, parental leave, disability benefits, military leave, and paid development and volunteer time off, along with other benefits and employee resources. 17 Table of Contents Human Rights OneMain recognizes our responsibility to help protect and promote human rights, and we strive to meet our responsibility to respect human rights with our team members, customers, and the communities we serve.
We currently have servicing facilities in Mendota Heights, Minnesota; Tempe, Arizona; London, Kentucky; Evansville, Indiana; Fort Mill, South Carolina; and Fort Worth, Texas.
We currently have servicing facilities in Mendota Heights, Minnesota; Tempe, Arizona; London, Kentucky; Evansville, Indiana; Fort Mill, South Carolina; and Fort Worth, Texas. We believe these facilities position us for additional portfolio purchases and/or fee-based servicing, as well as additional flexibility in the servicing of our lending products.
We develop these models using numerous factors, including past customer credit repayment experience and application data, and periodically revalidate these models based on recent portfolio performance. Our underwriting process for our personal loans also includes an assessment of the applicant’s income and expenses to ensure he or she has the capacity to repay the loan.
Our underwriting process for our personal loans also includes an assessment of the applicant’s income and expenses to ensure he or she has the capacity to repay the loan.
These state laws include the California Consumer Privacy Act (as amended by the California Privacy Rights Act of 2020) and the New York Cybersecurity Regulation. Certain of these requirements may apply to the personal information of our employees and contractors as well as to our customers.
These state laws include, but are not limited to, the California Consumer Privacy Act (as amended by the California Privacy Rights Act of 2020), the Oregon Consumer Privacy Act, and the New York Department of Financial Services (“NYDFS”) Cybersecurity Regulation.
Our business benefits from an origination and servicing process that leverages our local community presence. Our customers often develop a relationship with their local office representatives, which we believe not only improves the credit performance of our personal loans but also improves customer loyalty and the longer term relationship.
Our customers often develop a relationship with their local office representatives, which we believe not only improves the credit performance of our personal loans but also improves customer loyalty and the longer-term relationship. We solicit customers through a variety of channels, including but not limited to direct mail offers, affiliate partners, targeted online advertising, search engines, and e-mail.
Our applications, regardless of whether they are completed in person, over the phone, or online, go through our best-in-class underwriting processes, including an ability-to-pay assessment, monthly budgeting, income verification, and centralized automated credit decisioning. Our goal is to continue to improve the way we serve our customers and extend responsible credit, so customers are able to repay their loans.
These tools simplify and optimize the customer experience. We offer borrowers an option to close remotely through our digital platform without coming into a branch location. Our applications, regardless of whether they are completed in person, over the phone, or online, go through our best-in-class underwriting processes, including an ability-to-pay assessment, monthly budgeting, income verification, and central automated credit decisioning.
Credit Risk. Credit quality is driven by our long-standing underwriting philosophy, which considers a prospective customer’s willingness to pay and the capacity to repay the personal loan. We use credit risk scoring models at the time of the credit application to assess the applicant’s likelihood of repaying the loan.
Our goal is to continue to improve the way we serve our customers and extend responsible credit, so customers are able to repay their loans. Credit Risk. Credit quality is driven by our long-standing underwriting philosophy, which considers a prospective customer’s willingness and capacity to repay the personal loan.
Account servicing and collections for our finance receivables are handled at the branch location, in our centralized service centers, through our digital platform, or third-party servicers. Servicing and collection activity is conducted and documented on systems that log and maintain a permanent record of all transactions and may also be used to assess a customer’s application.
Servicing and collection activity is conducted and documented on systems that log and maintain a permanent record of all transactions and may also be used to assess a customer’s application. The systems permit branch office management to review the individual and collective performance of branch locations for which they are responsible.
We believe these facilities position us for additional portfolio purchases and/or fee-based servicing, as well as additional flexibility in the servicing of our lending products. 11 Table of Contents OPERATIONAL CONTROLS We continuously strive to strengthen our system of internal controls to ensure compliance with laws, rules, and regulations, and to improve the oversight of our operations.
OPERATIONAL CONTROLS We continuously strive to strengthen our system of internal controls to ensure compliance with laws, rules, and regulations, and to improve the oversight of our operations.
COMPETITION We operate primarily in the consumer lending industry. We focus on serving the nonprime customer through our national branch network, online, and over the phone. We have a number of local, regional, national, and digital competitors in the consumer installment lending industry that seek to 15 Table of Contents serve the same consumers that we serve.
COMPETITION We operate in the consumer lending industry with a focus on serving the nonprime customer through our national branch network, central operations, affiliate partners, online, and over the phone.
See also “Competition” included in this report. 9 Table of Contents SEGMENT Consumer and Insurance At December 31, 2022, Consumer and Insurance (“C&I”) was our only reportable segment.
We believe we are well-positioned to capitalize on the significant growth and expansion opportunity within our industry. See also “Competition” included in this report. SEGMENT Consumer and Insurance At December 31, 2023, Consumer and Insurance (“C&I”) was our only reportable segment.
As part of Credit Worthy by OneMain Financial, we will award up to $300,000 in scholarships over four years. As part of our commitment to social responsibility, we are focused on sustainable growth and our carbon footprint.
As part of Credit Worthy by OneMain Financial, we will award up to $300,000 in scholarships over four years. As part of our commitment to Impact, we continuously look for opportunities to minimize our environmental impacts and promote sustainability. In 2023, we published our Environmental Policy to emphasize our dedication to sustainability and compliance for our business.
As of December 31, 2022, 88% of team members participated in the annual Employee Engagement Survey. 16 Table of Contents Talent Retention and Development We believe that motivated and engaged team members are more productive, innovative, and collaborative, which in turn helps consistently deliver an excellent customer experience.
Talent Retention and Development We believe that motivated and engaged team members are more productive, innovative, and collaborative, which in turn helps consistently deliver an excellent customer experience. OneMain equips each team member at all levels of our organization with the tools and support, both personal and professional, to further their careers.
We believe we are well positioned for future growth with an experienced management team, proven access to the capital markets, and strong demand for consumer credit. At December 31, 2022, we had $20.0 billion of finance receivables due from approximately 2.47 million customer accounts. We also service personal loans for our whole loan sale partners.
At December 31, 2023, we had $21.3 billion of finance receivables due from approximately 2.8 million customer accounts. We also service personal loans for our whole loan sale partners. At December 31, 2023, we had $22.2 billion of managed receivables due from approximately 3.0 million customer accounts.
A re-age is intended to assist delinquent customers who have experienced financial difficulties but have demonstrated both an ability and a willingness to repay their loan. After the re-age, the customer’s account status is brought current. Account Servicing.
If we believe the borrower’s financial difficulties are not temporary, the account is evaluated for other methods of borrower assistance, such as modification of loan terms. A re-age may also be offered to assist delinquent customers who have experienced financial difficulties but have demonstrated both an ability and a willingness to repay their loan.
Our ESG strategy is guided by three priorities: building trust and strong relationships with our stakeholders, providing responsible lending solutions, and contributing to our communities through education, financial wellness, and volunteerism. In 2021, with the support of our Chief Executive Officer (“CEO”), leadership, and investors, we created our ESG Executive Council.
A copy of our Human Rights Statement is available on our Investor Relations website. IMPACT Our Impact strategy is guided by three priorities reflecting our commitment to social responsibility: building trust and strong relationships with our stakeholders, providing responsible credit solutions, and contributing to our communities through education, financial wellness, and volunteerism.
In addition, credit card offerings continue to deepen our existing customer relationships, attract new customers, and furthers our vision to become the lender of choice for nonprime customers. We believe we are well-positioned to capitalize on the significant growth and expansion opportunity within our industry.
Our national branch network and digital platform, combined with our central operational capabilities, provide an opportunity to serve this market efficiently and responsibly. In addition, our auto finance and credit card offerings continue to deepen our existing customer relationships, attract new customers, and further our vision to become the lender of choice for nonprime customers.
Various U.S. federal, state, and territory regulators have also enacted data security breach notification requirements that are applicable to us. 12 Table of Contents OneMain has an enterprise risk framework which includes cybersecurity as a key potential risk area.
Certain of these requirements may apply to the personal information of our employees and contractors, as well as to our customers. Various U.S. federal, state, and territory regulators have also enacted, or are in the process of enacting, data security breach notification requirements that are applicable to us.
We may extend the opportunity of a deferment to customers when they are experiencing a temporary financial hardship. The account is brought current after granting the deferment. To assess whether a borrower’s financial difficulties are temporary, we review the terms of each deferment to evaluate the borrower’s financial ability to repay the loan.
We may extend the opportunity of a deferment and bring the customer current if they are experiencing a temporary financial hardship. We evaluate the borrower’s financial situation to ensure that it is temporary and the ability to resume monthly payments would be solved by the deferment.
Triton is a property and casualty insurance company licensed in 50 states, the District of Columbia, and Canada to write credit involuntary unemployment, credit disability, and collateral protection insurance. See Note 10 of the Notes to the Consolidated Financial Statements included in this report for further information on our insurance business. Products and Services.
See Note 10 of the Notes to the Consolidated Financial Statements in Part II - Item 8 in this report for further information on our insurance business. Products and Services. Our personal loan business comprises products and services that have performed well through various market conditions.
Should a customer fail to maintain required insurance on property pledged as collateral for the finance receivable, we obtain collateral protection insurance, at the customer’s expense, that protects the value of that collateral. Customer Development. We staff each of our branch locations with local well-trained personnel, including professionals who have significant experience in the industry.
We require collateral protection insurance, at the customer’s expense, when they fail to maintain required insurance on property pledged as collateral for the finance receivable, that protects the value of that collateral. We provide our customers financial wellness tools, free of charge. Trim by OneMain is a financial wellness platform intended to help improve our customers’ financial well-being.
Removed
At December 31, 2022, we managed a combined total of 2.56 million customer accounts and $20.8 billion of managed receivables.
Added
Personal loan origination and servicing, credit cards, and insurance products form the core of our operations. 10 Table of Contents Our insurance business is conducted through our wholly owned insurance subsidiaries, American Health and Life Insurance Company (“AHL”) and Triton Insurance Company (“Triton”).
Removed
We are one of the few national participants in the consumer installment lending industry. Our national branch network and digital platform, combined with our centralized operational capabilities, provide an opportunity to serve this market efficiently and responsibly.
Added
Credit disability insurance provides scheduled monthly loan payments during borrower’s disability, while credit involuntary unemployment insurance provides scheduled monthly loan payments during involuntary unemployment.
Removed
Credit cards are open-ended, revolving, with a fixed rate, and are unsecured.
Added
Our other optional products primarily consist of traditional term life policies, optional membership plans from an unaffiliated company and Guaranteed Asset Protection (“GAP”) coverage, to cover the shortfall between the customer’s auto loan balance and the payment amount made by the customer’s primary auto insurance.
Removed
We offer optional non-credit insurance policies, which are primarily traditional level-term life policies with very limited underwriting. We offer optional membership plans from an unaffiliated company. We have no direct risk of loss on these membership plans, and these plans are not considered insurance products.
Added
Some of the features currently offered include bill negotiation, subscription management, budgeting, and spend tracking. Customer Development. We staff each of our branch locations with local well-trained personnel, including professionals who have significant experience in the industry. Our business benefits from an origination and servicing process that leverages our local community presence.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAny failure, interruption, or breach in our cybersecurity could result in reputational harm, disruption of our customer relationships, or our inability to originate, process and service our finance receivable products, any of which could have a materially adverse effect on our financial condition, results of operations, and liquidity. 21 Table of Contents Further, any of these cybersecurity and operational risks could expose us to lawsuits by customers for identity theft or other damages resulting from data breach involving PII or misuse of their PII and possible financial liability, any of which could have a material adverse effect on our financial condition, results of operations, and liquidity.
Biggest changeFurther, if any of these cybersecurity and operational risks materialize, they could expose us to lawsuits by customers for identity theft or other damages (for example, in the case of a data breach involving PII or misuse of PII), and possible financial liability, any of which could have a material adverse effect on our financial condition, results of operations, and liquidity.
The information systems of these third parties may be vulnerable to security breaches and, despite our best efforts, we may not be able to ensure that these third parties have appropriate security controls in place to protect the information we share with them.
The information systems of these third parties may be vulnerable to security breaches and, despite our best efforts, we may not be able to ensure that these third parties have appropriate security controls in place to protect information we share with them.
To estimate the appropriate level of allowance for finance receivable losses, we consider known and relevant internal and external factors that affect finance receivable collectability, including the total amount of finance receivables outstanding, historical finance receivable charge-offs, our current collection patterns, and current and forecasted economic trends.
To estimate the appropriate level of allowance for finance receivable losses, we consider known and relevant internal and external factors that affect finance receivable collectability, including the total amount of finance receivables outstanding, historical finance receivable delinquency and charge-offs, our current collection patterns, and current and forecasted economic trends.
By using derivative instruments, we are exposed to credit and market risks, including the risk of loss associated with variations in the spread between the asset yield and the funding and/or hedge cost, default risk, and the risk of insolvency or other inability of the counterparty to a particular derivative financial instrument to perform its obligations. 22 Table of Contents We may not be able to make technological improvements as quickly as some of our competitors, which could harm our ability to compete and adversely affect our financial condition, results of operations, and liquidity.
By using derivative instruments, we are exposed to credit and market risks, including the risk of loss associated with variations in the spread between the asset yield and the funding and/or hedge cost, default risk, and the risk of insolvency or other inability of the counterparty to a particular derivative financial instrument to perform its obligations. 23 Table of Contents We may not be able to make technological improvements as quickly as some of our competitors, which could harm our ability to compete and adversely affect our financial condition, results of operations, and liquidity.
These provisions provide for: • a classified Board with staggered three-year terms; • certain rights with respect to the designation of directors for nomination and election to the Board, including the ability of Värde to appoint one director, for so long as Värde has beneficial ownership of less than 10% but at least 5% of the voting power of OMH; • removal of directors only for cause and only with the affirmative vote of at least 80% of the voting interest of stockholders entitled to vote; • no ability for stockholders to call special meetings of OMH's stockholders; • advance notice requirements by stockholders with respect to director nominations and actions to be taken at annual meetings; • the ability for stockholders to act outside a meeting by written consent only if unanimous; and 30 Table of Contents • the issuance of blank check preferred stock by the Board from time to time in one or more series and to establish the terms, preferences and rights of any such series of preferred stock, all without approval of OMH stockholders.
These provisions provide for: • a classified Board with staggered three-year terms; • certain rights with respect to the designation of directors for nomination and election to the Board, including the ability of Värde to appoint one director, for so long as Värde has beneficial ownership of less than 10% but at least 5% of the voting power of OMH; • removal of directors only for cause and only with the affirmative vote of at least 80% of the voting interest of stockholders entitled to vote; • no ability for stockholders to call special meetings of OMH's stockholders; • advance notice requirements by stockholders with respect to director nominations and actions to be taken at annual meetings; • the ability for stockholders to act outside a meeting by written consent only if unanimous; and • the issuance of blank check preferred stock by the Board from time to time in one or more series and to establish the terms, preferences and rights of any such series of preferred stock, all without approval of OMH stockholders.
Regulators may allege or determine, based upon such misconduct, that our systems and procedures to detect and deter employee misconduct are inadequate. Misconduct by our employees, or even unsubstantiated allegations of misconduct, could result in a material adverse effect on our reputation and our business. 32 Table of Contents Item 1B. Unresolved Staff Comments. None.
Regulators may allege or determine, based upon such misconduct, that our systems and procedures to detect and deter employee misconduct are inadequate. Misconduct by our employees, or even unsubstantiated allegations of misconduct, could result in a material adverse effect on our reputation and our business. 33 Table of Contents Item 1B. Unresolved Staff Comments. None.
OMFC and OMFG currently act as the servicers with respect to the personal loan securitization trusts and related series of asset-backed securities. If OMFC or OMFG defaults in its servicing obligations, an early amortization event could occur with respect to the relevant asset-backed securities and OMFC or OMFG, as applicable, could be replaced as servicer.
OMFC and OMFG currently act as the servicers with respect to the securitization trusts and related series of asset-backed securities. If OMFC or OMFG defaults in its servicing obligations, an early amortization event could occur with respect to the relevant asset-backed securities and OMFC or OMFG, as applicable, could be replaced as servicer.
At its maximum, our exposure to repurchases or our indemnification obligations under our representations and warranties could include the current unpaid balance of all finance receivables that we have sold or securitized, and which are not subject to settlement agreements with purchasers.
Our maximum exposure to repurchases or our indemnification obligations under our representations and warranties could include the current unpaid balance of all finance receivables that we have sold or securitized, and which are not subject to settlement agreements with purchasers.
Our branch locations and centralized servicing centers, as well as our administrative and executive offices, are part of an electronic information network that is designed to permit us to originate and track finance receivables and collections and perform other tasks that are part of our everyday operations.
Our branch locations and central servicing centers, as well as our administrative and executive offices, are part of an electronic information network that is designed to permit us to originate and track finance receivables and collections and perform other tasks that are part of our everyday operations.
Insurance claims and policyholder liabilities are difficult to predict and may exceed the related reserves set aside for claims (losses) and associated expenses for claims adjudication (loss adjustment expenses). Additionally, events such as natural disasters, pandemic disease, cyber security breaches and other types of catastrophes, and prolonged economic downturns, could adversely affect our financial condition and results of operations.
Insurance claims and policyholder liabilities are difficult to predict and may exceed the related reserves set aside for claims (losses) and associated expenses for claims adjudication (loss adjustment expenses). Additionally, events such as natural disasters, pandemic disease, cybersecurity breaches and other types of catastrophes, and prolonged economic downturns, could adversely affect our financial condition and results of operations.
In addition, our collections could suffer, and we may incur additional expenses if we are required to change collection practices or stop collecting on certain debts because of a lawsuit or action on the part of regulators. 26 Table of Contents Changes in law and regulatory developments could result in significant additional compliance costs relating to securitizations.
In addition, our collections could suffer, and we may incur additional expenses if we are required to change collection practices or stop collecting on certain debts because of a lawsuit or action on the part of regulators. Changes in law and regulatory developments could result in significant additional compliance costs relating to securitizations.
Rating agencies could alter their ratings processes or criteria after we have accumulated 29 Table of Contents finance receivables for securitization in a manner that effectively reduces the value of those finance receivables by increasing our financing costs or otherwise requiring that we incur additional costs to comply with those processes and criteria.
Rating agencies could alter their ratings processes or criteria after we have accumulated finance receivables for securitization in a manner that effectively reduces the value of those finance receivables by increasing our financing costs or otherwise requiring that we incur additional costs to comply with those processes and criteria.
Thus, holders of OMH's common stock bear the risk that our future offerings may reduce the market price of OMH's common stock and dilute their stockholdings in us. 31 Table of Contents The future issuance of additional common stock in connection with our incentive plans, acquisitions or otherwise will dilute all other stockholdings.
Thus, holders of OMH's common stock bear the risk that our future offerings may reduce the market price of OMH's common stock and dilute their stockholdings in us. The future issuance of additional common stock in connection with our incentive plans, acquisitions or otherwise will dilute all other stockholdings.
If customer behavior changes as a result of economic conditions and if we are unable to accurately 19 Table of Contents predict how the unemployment rates, and general economic conditions may affect our allowance for finance receivable losses, our allowance for finance receivable losses may be inadequate.
If customer behavior changes as a result of economic conditions and if we are unable to accurately predict how the unemployment rates, and general economic conditions may affect our allowance for finance receivable losses, our allowance for finance receivable losses may be inadequate.
In assessing our current financial position and developing operating plans, management has made significant judgments and estimates with respect to our liquidity, including but not limited to: • our ability to generate sufficient cash to service all of our outstanding debt; • our continued ability to access debt and securitization markets and other sources of funding on favorable terms; • our ability to complete on favorable terms, as needed, additional borrowings, securitizations, finance receivable portfolio sales, or other transactions to support liquidity, and the costs associated with these funding sources, including sales at less than carrying value and limits on the types of assets that can be securitized or sold, which would affect our profitability; • the potential for downgrade of our debt by rating agencies, which would have a negative impact on our cost of, and access to, capital; • our ability to comply with our debt covenants; • our ability to make capital returns to OMH's stockholders; • the amount of cash expected to be received from our finance receivable portfolio through collections (including prepayments) and receipt of finance charges; • the potential for declining financial flexibility and reduced income should we use more of our assets for securitizations and finance receivable portfolio sales; and • the potential for reduced income due to the possible deterioration of the credit quality of our finance receivable portfolios. 28 Table of Contents Additionally, there are numerous risks to our financial results, liquidity, and capital raising and debt refinancing plans that are not quantified in our current liquidity forecasts.
In assessing our current financial position and developing operating plans, management has made significant judgments and estimates with respect to our liquidity, including but not limited to: • our ability to generate sufficient cash to service all of our outstanding debt; • our continued ability to access debt and securitization markets and other sources of funding on favorable terms; • our ability to complete on favorable terms, as needed, additional borrowings, securitizations, finance receivable portfolio sales, or other transactions to support liquidity, and the costs associated with these funding sources, including sales at less than carrying value and limits on the types of assets that can be securitized or sold, which would affect our profitability; • the potential for downgrade of our debt by rating agencies, which would have a negative impact on our cost of, and access to, capital; • our ability to comply with our debt covenants; • our ability to make capital returns to OMH's stockholders; • the amount of cash expected to be received from our finance receivable portfolio through collections (including prepayments) and receipt of finance charges; • the potential for declining financial flexibility and reduced income should we use more of our assets for securitizations and finance receivable portfolio sales; and • the potential for reduced income due to the possible deterioration of the credit quality of our finance receivable portfolios.
See Note 4 of the Notes to the Consolidated Financial Statements included in this report for quantification of our largest concentrations of net finance receivables. We cannot give assurance that our policies and procedures for underwriting, processing, and servicing personal loans or credit cards will adequately adapt to adverse economic or other changes.
See Note 4 of the Notes to the Consolidated Financial Statements in Part II - Item 8 in this report for quantification of our largest concentrations of net finance receivables. We cannot give assurance that our policies and procedures for underwriting, processing, and servicing personal loans or credit cards will adequately adapt to adverse economic or other changes.
This could result in more in-depth examinations, which could be costlier and lead to more significant enforcement actions. 24 Table of Contents We are also subject to potential enforcement, supervisions, and other actions that may be brought by state attorneys general or other state enforcement authorities and other governmental agencies.
This could result in more in-depth examinations, which could be costlier and lead to more significant enforcement actions. We are also subject to potential enforcement, supervisions, and other actions that may be brought by state attorneys general or other state enforcement authorities and other governmental agencies.
Cyber-attacks can have cascading impacts that unfold with increasing speed across our computer systems and networks and those of our third-party vendors. System redundancy and other continuity measures may be ineffective or inadequate, and our business continuity and disaster recovery planning may not be sufficient to adequately address the disruption.
Cyber-attacks can have cascading impacts that unfold with increasing speed across our systems and networks and those of our third-party vendors. System redundancy and other continuity measures may not be effective or adequate, and our business continuity and disaster recovery planning may not be sufficient to adequately address the disruption.
See Note 7 of the Notes to the Consolidated Financial Statements included in this report for further information on goodwill and intangible asset impairment. Damage to our reputation could adversely impact our business and financial results. Our ability to attract and retain customers and employees is significantly impacted by our reputation.
See Note 7 of the Notes to the Consolidated Financial Statements in Part II - Item 8 in this report for further information on goodwill and intangible asset impairment. Damage to our reputation could adversely impact our business and financial results. Our ability to attract and retain customers and employees is significantly impacted by our reputation.
If our confidential information is intercepted, stolen, misused, or mishandled while in possession of a third-party, it could result in reputational harm to us, loss of customer business, and additional regulatory scrutiny, and it could expose us to civil litigation and possible financial liability, any of which could have a material adverse effect on our financial condition, results of operations, and liquidity.
If our confidential information is intercepted, accessed without authorization, destroyed, stolen, misused, or mishandled while in possession of a third-party, it could result in reputational harm to us, loss of customer business, regulatory scrutiny, civil litigation and possible financial liability, any of which could have a material adverse effect on our financial condition, results of operations, and liquidity.
Our profitability depends, in large part, on our ability to underwrite and originate finance receivables. Some of our competitors may have greater financial, technical, and marketing resources than we possess. Some competitors may also have a lower cost of funds and access to funding sources that may not be available to us.
The consumer finance industry is highly competitive. Our profitability depends, in large part, on our ability to underwrite and originate finance receivables. Some of our competitors may have greater financial, technical, and marketing resources than we possess. Some competitors may also have a lower cost of funds and access to funding sources that may not be available to us.
Our yield, as well as our cash flows from operations and results of operations, could be materially and adversely affected if we are unable to increase the interest rates charged on new loans to offset any increases in our cost of funds.
Our yield, as well as our cash flows from operations and results of operations, could be materially and adversely affected if we are unable to increase the interest rates charged on new loans to offset any increases in our cost of funds. Accordingly, any increase in interest rates could negatively affect our financial condition, results of operations, and liquidity.
The allowance is primarily based on historical experience, current conditions, and our reasonable and supportable forecast of economic conditions.
The allowance is primarily based on historical experience, current conditions, and our reasonable and 20 Table of Contents supportable forecast of economic conditions.
Our risk management policies, procedures, and techniques, including our scoring technology, may not be sufficient to identify all of the risks we are exposed to, mitigate the risks we have identified, or identify concentrations of risk or additional risks to which we may become subject in the future.
Our risk management policies, procedures, and techniques, including our scoring technology, may not be sufficient to identify all the risks we are exposed to, mitigate the risks we have identified, or identify concentrations of risk or additional risks to which we may become subject in the future. We also face risks due to our remote workforce and digital operations.
Our operations rely heavily on the secure processing, storage, and transmission of confidential customer and other information including, among other things, PII, in our computer systems and networks, as well as those of third parties.
Our operations rely heavily on the secure collection, processing, storage, and transmission of tens of millions of records with confidential customer and other information including, among other things, PII, in our systems and networks, as well as those of third parties.
Requirements of the Dodd-Frank Act and oversight by the CFPB significantly increase our regulatory costs and burdens. The Dodd-Frank Act and the related regulations increased oversight of financial services and products by the CFPB, and imposed restrictions on the allowable terms for certain consumer credit transactions.
The Dodd-Frank Act and the related regulations increased oversight of financial services and products by the CFPB, and imposed restrictions on the allowable terms for certain consumer credit transactions.
If OMFC’s current ratings are downgraded, it will likely increase the interest rate that we would have to pay to raise money in the capital markets, making it more expensive for us to borrow money and adversely impacting our access to capital.
Each agency’s rating should be evaluated independently of any other agency’s rating. If OMFC’s current ratings are downgraded, it will likely increase the interest rate that we would have to pay to raise money in the capital markets, making it more expensive for us to borrow money and adversely impacting our access to capital.
In addition, regulators may impose penalties and/or require remedial action if they identify weaknesses in our security systems, and we may be required to incur significant costs to increase our cybersecurity to address any vulnerabilities that may be discovered or to remediate the harm caused by any security breaches.
In addition, regulators may impose penalties and/or require remedial action if they identify areas of noncompliance or weaknesses in our security systems, controls, processes, procedures, and policies, and we may be required to incur significant costs to enhance our cybersecurity program, including to address any vulnerabilities that may be discovered or to remediate the harm caused by any security breaches.
Any violations of these laws and regulations may require us to change our business practices or operational structure. Violations could subject us to material legal claims, monetary penalties, sanctions, and obligations to compensate and/or notify customers, employees, state attorneys general, regulators, and others, or take other remedial actions. Our use of third-party vendors is subject to regulatory review.
Any future violations of these laws and regulations could adversely impact our reputation and subject us to material legal claims, monetary penalties, sanctions, and obligations to compensate and/or notify customers, employees, state attorneys general, regulators, and others, or take other remedial actions. 26 Table of Contents Our use of third-party vendors is subject to regulatory review.
Our future success significantly depends on the continued service and performance of our key management personnel. Our senior management team has significant industry experience and would be difficult to replace. Competition for these employees is intense and we may not be able to attract and retain key personnel.
Our senior management team has significant industry experience and would be difficult to replace. Competition for these employees is intense and we may not be able to attract and retain key personnel.
Changes in market conditions could adversely affect the rate at which our borrowers prepay their loans and the value of our finance receivables portfolio, as well as increase our financing cost, which could negatively affect our financial condition, results of operations, and liquidity.
These risks may not be adequately captured by our existing risk management framework. Changes in market conditions could adversely affect the rate at which our borrowers prepay their loans and the value of our finance receivables portfolio, as well as increase our financing cost, which could negatively affect our financial condition, results of operations, and liquidity.
We also must comply with extensive regulations in servicing our legacy real estate loans and loan portfolios for other parties and will have to comply with these servicing regulations if we acquire loan portfolios in the future for which we act as a servicer.
We also must comply with extensive regulations in servicing our legacy real estate loans and loan portfolios for other parties and will have to comply with these servicing regulations if we acquire loan portfolios in the future for which we act as a servicer. Our operations are subject to regular examination by state regulators and U.S. federal and foreign regulators.
Accordingly, any increase in interest rates could negatively affect our financial condition, results of operations, and liquidity. 20 Table of Contents We may be required to indemnify or repurchase finance receivables from purchasers of finance receivables that we have sold or securitized, or which we will sell or securitize in the future, if our finance receivables fail to meet certain criteria or characteristics or under other circumstances, which could adversely affect our financial condition, results of operations, and liquidity.
Changes in market conditions may also impact market interest rates which could increase the amount of interest expense that we pay on our borrowings, and in turn increase our cost of funds and adversely affect our business, results of operations, and financial condition. 21 Table of Contents We may be required to indemnify or repurchase finance receivables from purchasers of finance receivables that we have sold or securitized, or which we will sell or securitize in the future, if our finance receivables fail to meet certain criteria or characteristics or under other circumstances, which could adversely affect our financial condition, results of operations, and liquidity.
As part of our business, we may share confidential customer information and proprietary information with customers, vendors, service providers, and business partners.
In addition, we may share confidential customer information and proprietary information with customers, vendors, service providers, and business partners.
A material failure to comply with applicable laws and regulations could result in regulatory actions, including substantial fines or penalties, lawsuits, and damage to our reputation, which could have a material adverse effect on our financial condition, results of operations, and liquidity. For more information with respect to the regulatory framework affecting our businesses, see “Business—Regulation” included in this report.
A material failure to comply with applicable laws and regulations could result in regulatory actions, including substantial fines or penalties, lawsuits, and damage to our reputation, which could have a material adverse effect on our financial condition, results of operations, and liquidity.
Therefore, any person acquiring 10% or more of OMH's common stock may need the prior approval of the Texas insurance and/or licensing regulators, or a determination from such regulators that “control” has not been acquired, which could significantly delay or otherwise impede their ability to complete such purchase.
Therefore, any person acquiring 10% or more of OMH's common stock may need the prior approval of the Texas insurance and/or licensing regulators, or a determination from such regulators that “control” has not been acquired, which could significantly delay or otherwise impede their ability to complete such purchase. 31 Table of Contents RISKS RELATED TO OMH'S COMMON STOCK The market price and trading volume of OMH's common stock may be volatile, which could result in rapid and substantial losses for OMH's stockholders.
RISKS RELATED TO OUR INDUSTRY AND REGULATION We operate in a highly competitive market, and we cannot ensure that the competitive pressures we face will not have a material adverse effect on our financial condition, results of operations, and liquidity. The consumer finance industry is highly competitive.
Even if integration is successful, anticipated benefits and synergies may not be achieved. 24 Table of Contents RISKS RELATED TO OUR INDUSTRY AND REGULATION We operate in a highly competitive market, and we cannot ensure that the competitive pressures we face will not have a material adverse effect on our financial condition, results of operations, and liquidity.
Many state regulators and some federal regulators have indicated an intention to pool their resources to conduct examinations of licensed entities, including us, at the same time (referred to as a “multi-state” examination).
These examinations may require us to change our policies or practices, pay monetary fines, or make reimbursements to customers. Many state regulators and some federal regulators have indicated an intention to pool their resources to conduct examinations of licensed entities, including us, at the same time (referred to as a “multi-state” examination).
RISKS RELATED TO OMH'S COMMON STOCK The market price and trading volume of OMH's common stock may be volatile, which could result in rapid and substantial losses for OMH's stockholders. The market price of OMH's common stock has been and may continue to be volatile and could be subject to wide fluctuations and may decline significantly in the future.
The market price of OMH's common stock has been and may continue to be volatile and could be subject to wide fluctuations and may decline significantly in the future.
If we are unable to complete additional securitization transactions or unsecured debt offerings on a timely basis or upon terms acceptable to us or otherwise access adequate sources of liquidity, our ability to fund our own operational requirements and satisfy financial obligations may be adversely affected. 27 Table of Contents Our indebtedness is significant, which could affect our ability to meet our obligations under our debt instruments and could materially and adversely affect our business and ability to react to changes in the economy or our industry.
If we are unable to complete additional securitization transactions or unsecured debt offerings on a timely basis or upon terms acceptable to us or otherwise access adequate sources of liquidity, our ability to fund our own operational requirements and satisfy financial obligations may be adversely affected.
If we are unable to obtain funds from our subsidiaries, or if our subsidiaries do not generate sufficient cash from operations, we may be unable to meet our financial obligations or pay dividends, and the Board may exercise its discretion not to pay dividends.
If we are unable to obtain funds from our subsidiaries, or if our subsidiaries do not generate sufficient cash from operations, we may be unable to meet our financial obligations or pay dividends, and the Board may exercise its discretion not to pay dividends. 30 Table of Contents OMH may not pay dividends on its common stock in the future, even if liquidity and leverage targets are met.
The products included debt cancellation/suspension products and other types of payment protection insurance. We collect on delinquent debt. We also sell optional insurance and non-insurance products in connection with our loans. Our debt collection practices and sales of optional insurance and non-insurance products could be challenged in a similar manner by the CFPB or state consumer lending regulators.
We also sell optional insurance and non-insurance products in connection with our loans. Our debt collection practices and sales of optional insurance and non-insurance products could be challenged in a similar manner by the CFPB or state consumer lending regulators. Some of the rulemaking under the Dodd-Frank Act remains pending.
In the event of such an occurrence, if third-party financing is not available, our liquidity could be materially adversely affected, and as a result, substantial doubt could exist about our ability to continue as a going concern.
In the event of such an occurrence, if third-party financing is not available, our liquidity could be materially adversely affected, and as a result, substantial doubt could exist about our ability to continue as a going concern. 29 Table of Contents OMFC's credit ratings could adversely affect our ability to raise capital in the debt markets at attractive rates, which could negatively affect our financial condition, results of operations, and liquidity.
These systems may encounter service disruptions due to system, network or software failure, security breaches, cyber-attacks, ransomware, computer viruses, accidents, power disruptions, telecommunications failures, acts of terrorism or war, physical or electronic break-ins, or other events, disruptions, or intrusions. In addition, denial-of-service attacks could overwhelm our internet sites and prevent us from adequately serving customers.
These systems have encountered, and may in the future encounter, service disruptions due to system, network or software vulnerabilities or failures, security breaches, cyber-attacks, social engineering, ransomware, viruses, accidents, power disruptions, telecommunications failures, acts of terrorism or war, physical or electronic break-ins, or other events, disruptions, or intrusions.
We may not receive such relief on a timely basis, if at all, and such relief may require us to modify or curtail our operations. If we are deemed to be an investment company, we may also be required to institute burdensome compliance requirements and our activities may be restricted.
We may not receive such relief on a timely basis, if at all, and such relief may require us to modify or curtail our operations.
A disruption could impair our ability to offer and process our loans, provide customer service, perform collections or other necessary business activities, which could result in a loss of customer business, subject us to additional regulatory scrutiny, or expose us to civil litigation and possible financial liability, or otherwise materially adversely affect our financial condition and results of operations.
These kinds of cyber-attacks and the challenges described herein, or a series of smaller attacks in the aggregate, could impair our ability to offer and process our loans, provide customer service, perform collections or other necessary business activities, and maintain our operations, which could result in a loss of customer business, negative impact to our brand and reputation, subject us to regulatory scrutiny, or expose us to civil litigation and possible financial liability, or otherwise have a material adverse effect on our financial condition and results of operations.
The CFPB’s broad supervisory and enforcement powers could affect our business and operations significantly in terms of increased operating and regulatory compliance costs, and limits on the types of products we offer and the way they are offered, among other things. 25 Table of Contents The CFPB and certain state regulators have acted against some lenders regarding, for instance, debt collection and the marketing of optional products offered by the lenders in connection with their loans.
The CFPB’s broad supervisory and enforcement powers could affect our business and operations significantly in terms of increased operating and regulatory compliance costs, and limits on the types of products we offer and the way they are offered, among other things.
While our sale and securitization documents vary, they generally contain customary provisions that may require us to repurchase finance receivables if our representations and warranties concerning the quality and characteristics, including but not limited to regulatory requirements in connection with origination and servicing, of the finance receivable are inaccurate and there is borrower fraud.
While our sale and securitization documents vary, they generally contain customary provisions that may require us to repurchase finance receivables if there is a breach of representations and warranties concerning the quality and characteristics of the finance receivables and such breach is material and adverse to the purchasers.
Our current corporate credit ratings are below investment grade and, as a result, our borrowing costs may further increase and our ability to borrow may be limited.
Historically, we have funded our operations and repaid our debt and other obligations using funds collected from our finance receivable portfolio and new debt issuances. Our current corporate credit ratings are below investment grade and, as a result, our borrowing costs may further increase and our ability to borrow may be limited.
Some of the rulemaking under the Dodd-Frank Act remains pending. As a result, the complete impact of the Dodd-Frank Act remains uncertain. It is not clear what form remaining regulations will ultimately take, or how our business will be affected.
As a result, the complete impact of the Dodd-Frank Act remains uncertain. It is not clear what form remaining regulations will ultimately take, or how our business will be affected. For more information with respect to the regulatory framework affecting our businesses and the CFPB, see “Business—Regulation” included in this report.
A default could also significantly limit our alternatives to refinance our indebtedness. This limitation may significantly restrict our financing options during times of either market distress or our financial distress, which are precisely the times when having financing options is most important.
This limitation may significantly restrict our financing options during times of either market distress or our financial distress, which are precisely the times when having financing options is most important. 28 Table of Contents The assessment of our liquidity is based upon significant judgments and estimates that could prove to be materially incorrect.
Although we have insurance that is intended to cover certain losses from such events, there can be no assurance that such insurance will be adequate or available. We are also subject to the theft or misuse of physical customer and employee records at our facilities.
Insurance may not be adequate or available to cover losses from such events. We are also subject to the theft or misuse of physical customer and employee records at our facilities. Our branch locations and central servicing centers have physical customer records necessary for day-to-day operations that contain confidential information about our customers.
The anticipated benefits and synergies of any future acquisition will assume a successful integration, and will be based on projections and other assumptions, which are inherently uncertain. Even if integration is successful, anticipated benefits and synergies may not be achieved. 23 Table of Contents The COVID-19 pandemic may continue to adversely affect consumer finance businesses including OneMain.
The anticipated benefits and synergies of any future acquisition will assume a successful integration, and will be based on projections and other assumptions, which are inherently uncertain.
These third parties are also sources of risk associated with operational errors, system interruptions or breaches and unauthorized disclosure of confidential information. If our vendors encounter any of these issues, we could be exposed to disruption of service, damage to our reputation and litigation. If we lose the services of any of our key management personnel, our business could suffer.
If our vendors encounter any of these issues, we could be exposed to disruption of service, damage to our reputation and litigation. If we lose the services of any of our key management personnel, our business could suffer. Our future success significantly depends on the continued service and performance of our key management personnel.
For additional information regarding pending legal proceedings and other contingencies, see Note 14 of the Notes to the Consolidated Financial Statements included in this report. Certain operations rely on external vendors. We rely on third-party vendors to provide products and services necessary to maintain day-to-day operations, including a portion of our information systems, communication, data management and transaction processing.
For additional information regarding pending legal proceedings and other contingencies, see Note 14 of the Notes to the Consolidated Financial Statements in Part II - Item 8 in this report. 32 Table of Contents Certain operations rely on external vendors.
For more information with respect to the regulatory framework affecting our businesses and the CFPB, see “Business—Regulation” included in this report. Current and proposed regulations relating to consumer privacy, data protection, and information security could increase our costs. We are subject to federal and state consumer privacy, data protection, and information security laws and regulations.
Current and proposed regulations relating to consumer privacy, data protection, and cybersecurity could increase our costs. We are subject to federal and state consumer privacy, data protection, and cybersecurity laws and regulations.
For example, we are subject to the federal Gramm-Leach-Bliley Act and the New York Cybersecurity Regulation, which govern the use of PII by financial institutions and require certain safeguards for protecting PII. Moreover, various state laws and regulations may require us to notify customers, employees, state attorneys general, regulators, and others in the event of a security breach.
Moreover, various state laws and regulations may require us to notify customers, employees, state attorneys general, regulators, and others in the event of a security breach. Federal and state legislators and regulators are pursuing new guidance, laws, and regulations relating to consumer privacy, data protection, and cybersecurity.
Agency ratings are not a recommendation to buy, sell or hold any security, and may be revised or withdrawn at any time by the issuing organization. Each agency’s rating should be evaluated independently of any other agency’s rating.
S&P, Moody’s, and KBRA rate OMFC’s debt. Ratings reflect the rating agencies’ opinions of a company’s financial strength, operating performance, strategic position, and ability to meet its obligations. Agency ratings are not a recommendation to buy, sell or hold any security, and may be revised or withdrawn at any time by the issuing organization.
Accordingly, we are exposed to the risk that these vendors might not perform in accordance with the contracted arrangements or service level agreements. Such failure to perform could be disruptive to our operations and have a materially adverse impact on our business, financial condition, and results of operations.
We rely on third-party vendors to provide products and services necessary to maintain day-to-day operations, including a portion of our information systems, communication, data management and transaction processing. Accordingly, we are exposed to the risk that these vendors might not perform in accordance with the contracted arrangements or service level agreements.
RISKS RELATED TO OUR INDEBTEDNESS An inability to access adequate sources of liquidity may adversely affect our ability to fund operational requirements and satisfy financial obligations. Our ability to access capital and credit may be significantly affected by disruption in the U.S. credit markets and any potential credit rating downgrades on our debt.
Our ability to access capital and credit may be significantly affected by disruption in the U.S. credit markets and any potential credit rating downgrades on our debt. In addition, the risk of volatility and uncertainty surrounding the macroeconomic environment could continue to create significant volatility in, and uncertainty around access to the capital markets.
The larger-participant rule for consumer installment loans was one of the rulemaking initiatives the CFPB designated as inactive in its Spring 2018 rulemaking agenda. It is not known if or when the CFPB may consider reactivating the rulemaking process for the larger participant rule for consumer installment loans.
The CFPB currently has supervisory authority over the Company as a mortgage servicer,and as a “larger participant” in the auto financing market. The larger-participant rule for consumer installment loans was one of the rulemaking initiatives the CFPB designated as inactive in its Spring 2018 rulemaking agenda.
Federal and state legislators and regulators are pursuing new guidance, laws, and regulations relating to consumer privacy, data protection, and information security. Compliance with current or future consumer privacy, data protection, and information security laws and regulations could result in higher compliance, technology, or other operating costs.
Compliance with current or future consumer privacy, data protection, and cybersecurity laws and regulations could result in higher compliance, technology, or other operating costs. Any violations of these laws and regulations may require us to change our business practices or operational structure.
Cyber-attacks, including ransomware, are constantly evolving, increasing the difficulty of detecting and successfully defending against them. We also may face new or heightened risk due to the increase in our remote workforce and digital operations. We may have no current capability to detect certain vulnerabilities, which may allow them to persist in our system environment over long periods of time.
In addition, denial-of-service attacks could overwhelm our internet sites, applications, and services and prevent us from adequately serving customers and maintaining our operations. Cyber-attacks, including ransomware, are constantly evolving, increasing the difficulty of detecting, responding to, and successfully defending against them. We also may face heightened risk due to our remote workforce, use of third-party services, and digital operations.
These security measures may not be sufficient and may be vulnerable to hacking, employee error, malfeasance, system error, faulty password management, or other irregularities.
Network and data security measures, such as encryption, access controls, authentication mechanisms, and other security measures intended to protect our systems and data may not be sufficient and data may be vulnerable to hacking, unauthorized 22 Table of Contents access, employee error (including phishing and social engineering), malfeasance, system error, faulty password management, or other weaknesses that could be exploited.
The CFPB currently has supervisory authority over our real estate servicing activities, and may in the future have supervisory authority over other parts of our consumer lending business. It also has the authority to bring enforcement actions for violations of laws over which it has jurisdiction regardless of whether it has supervisory authority for a given product or service.
It is not known if or when the CFPB may consider reactivating the rulemaking process for the larger participant rule for consumer installment loans. It also has the authority to bring enforcement actions for violations of laws over which it has jurisdiction regardless of whether it has supervisory authority over an entity.
Additionally, as a result of the COVID-19 pandemic and the significant increase in our remote workforce and digital operations, our vulnerability to unauthorized access to confidential information may increase. We devote significant resources to network and data security, including using encryption, access controls, authentication, and other security measures intended to protect our computer systems and data.
Additionally, due to our remote workforce and digital operations, including our use of third parties and third-party services, our vulnerability to unauthorized access to confidential information may increase.
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We also face evolving risks as a result of the significant increase in our remote workforce and digital operations. These risks may not be adequately captured by our existing risk management framework.
Added
Our security measures vary in maturity across the business, and some of our peers may have more mature cybersecurity programs, which could impact our ability to market and sell our products and services.
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Our branch locations and centralized servicing centers have physical customer records necessary for day-to-day operations that contain confidential information about our customers. We also retain physical records in various storage locations.
Added
We may fail or be unable to timely detect and patch certain vulnerabilities, including those classified as zero-day vulnerabilities, which may allow unauthorized actors to gain access to and persist in our system environment over long periods of time. Our logs and other forensic evidence also may not provide a complete picture of a cyber-attack.
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The virus causing COVID-19 was identified in late 2019 and was declared a global pandemic in March 2020. Governmental authorities took a number of steps to combat or slow the spread of COVID-19. Efforts to combat the virus continue to be complicated by viral variants and uneven global access to and acceptance of vaccines.
Added
Any failure, interruption, breakdown, noncompliance, or breach in our cybersecurity measures or controls, policies, or procedures could result in reputational harm, disruption of our customer relationships, litigation or regulatory enforcement, or in our inability to originate, process, and service our finance receivable products, any of which could have a material adverse effect on our financial condition, results of operations, and liquidity.
Removed
These measures have and may continue to impact all or portions of the Company’s workforce and our current and prospective customers. While many of the restrictions related to the COVID-19 pandemic have largely been eased, uncertainty continues to exist regarding such measures and potential future measures.
Added
We also retain physical records in various storage locations.
Removed
In response to COVID-19, we modified our business practices with a portion of our employees working remotely to minimize interruptions in our business.
Added
For more information with respect to the regulatory framework affecting our businesses, see “Business—Regulation” included in this report. 25 Table of Contents Requirements of the Dodd-Frank Act and oversight by the CFPB significantly increase our regulatory costs and burdens.
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Although these changes have allowed us to continue operations safely, the technology in home environments may not be as robust as in our offices and could cause networks, information systems, applications, and other tools available to employees to be more limited or less reliable than in our offices.
Added
The CFPB and certain state regulators have acted against some lenders regarding, for instance, debt collection and the marketing of optional products offered by the lenders in connection with their loans. The products included debt cancellation/suspension products and other types of payment protection insurance. We collect on delinquent debt.
Removed
The continuation of these work-from-home measures also introduces additional operational risk, including increased cybersecurity risk from phishing, malware, and other cybersecurity attacks, all of which could expose us to risks of data or financial loss and could seriously disrupt our operations and the operations of any impacted customers.
Added
For example, we are subject to the federal GLBA and the NYDFS Cybersecurity Regulation, which govern the collection, processing, sharing, storage, use, and protection of PII and other confidential information by financial institutions and require certain safeguards, controls, policies, and processes for protecting PII and other confidential information.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeOur branch locations have lease terms generally ranging from three to five years. We lease administrative offices in Wilmington, Delaware; Irving, Texas; Charlotte, North Carolina; and New York, New York, which expire in 2023, 2025, 2025, and 2028, respectively. Additionally, we lease office space in Baltimore, Maryland, expiring in 2026, which has been partially sublet.
Biggest changeThese facilities include Fort Mill, South Carolina; Tempe, Arizona; Fort Worth, Texas; and Mendota Heights, Minnesota, with leases that expire in 2027, 2027, 2028, and 2029, respectively. We also lease administrative offices in Irving, Texas; Baltimore, Maryland; Charlotte, North Carolina; New York, New York; and Wilmington, Delaware, which expire in 2025, 2026, 2027, 2028, and 2031, respectively.
Our investment in real estate and tangible property is not significant in relation to our total assets due to the nature of our business. At December 31, 2022, our subsidiaries owned a loan servicing facility in London, Kentucky, and six buildings in Evansville, Indiana. The Evansville buildings also support our administrative and centralized functions.
Our investment in real estate and tangible property is not significant in relation to our total assets due to the nature of our business. At December 31, 2023, our subsidiaries owned a loan servicing facility in London, Kentucky, and six buildings in Evansville, Indiana. The Evansville buildings also support our administrative and central functions.
Our branch office operations, administrative offices, centralized operations, and loan servicing facilities support our Consumer and Insurance segment.
Our branch office operations, administrative offices, central operations, and loan servicing facilities support our Consumer and Insurance segment.
Removed
Item 2. Properties. Our branch network includes approximately 1,400 locations in 44 states. We support our branch business by conducting branch office operations, branch office administration, and centralized operations, including our servicing facilities, in Mendota Heights, Minnesota; Tempe, Arizona; Fort Mill, South Carolina; and Fort Worth, Texas, in leased premises.
Added
Item 2. Properties. Our branch network includes approximately 1,400 locations in 44 states. Our branches have lease terms generally ranging from three to five years. In addition to our branches, several of our central servicing facilities operate in leased premises.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings. The information required with respect to this item can be found under "Legal Contingencies" in Note 14 of the Notes to the Consolidated Financial Statements found elsewhere in this Annual Report, which is incorporated by reference into this Item 3. Item 4. Mine Safety Disclosures. None. 33 Table of Contents PART II
Biggest changeItem 3. Legal Proceedings. The information required with respect to this item can be found under "Legal Contingencies" in Note 14 of the Notes to the Consolidated Financial Statements in Part II - Item 8 in this Annual Report, which is incorporated by reference into this Item 3.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeISSUER PURCHASES OF EQUITY SECURITIES The following table presents information regarding repurchases of our common stock, excluding commissions and fees, during the quarter ended December 31, 2022: Period Total Number of Shares Purchased Average Price paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (a) Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (a) October 1 - October 31 659,386 $ 31.85 659,386 $ 761,198,965 November 1 - November 30 480,726 37.79 480,726 743,032,987 December 1 - December 31 481,529 36.34 481,529 725,533,397 Total 1,621,641 $ 34.94 1,621,641 ( a) On February 2, 2022, the Board authorized a $1 billion stock repurchase program, excluding fees, commissions, and other expenses related to the repurchases.
Biggest changeISSUER PURCHASES OF EQUITY SECURITIES The following table presents information regarding repurchases of our common stock, excluding commissions and fees, during the quarter ended December 31, 2023, based on settlement date: Period Total Number of Shares Purchased Average Price paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (a) Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (a) October 1 - October 31 530,814 $ 37.81 530,814 $ 660,499,429 November 1 - November 30 — — — 660,499,429 December 1 - December 31 — — — 660,499,429 Total 530,814 $ 37.81 530,814 (a) On February 2, 2022, the Board authorized a $1 billion stock repurchase program, excluding fees, commissions, and other expenses related to the repurchases.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. MARKET INFORMATION AND STOCKHOLDERS OMH’s common stock is listed for trading on the New York Stock Exchange (“NYSE”) under the symbol “OMF.” On January 31, 2023, there were two record holders of OMH's common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. MARKET INFORMATION AND STOCKHOLDERS OMH’s common stock is listed for trading on the New York Stock Exchange (“NYSE”) under the symbol “OMF.” On January 31, 2024, there were two record holders of OMH's common stock.
This data assumes simultaneous investments of $100 on December 31, 2017 and reinvestment of any dividends. The information in this “Stock Performance” section shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C, or to the liabilities of Section 18 of the Exchange Act.
This data assumes simultaneous investments of $100 on December 31, 2018 and reinvestment of any dividends. The information in this “Stock Performance” section shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C, or to the liabilities of Section 18 of the Exchange Act.
OMH is not obligated to purchase any shares under the program, which may be modified, suspended or discontinued at any time . 34 Table of Contents STOCK PERFORMANCE The following data and graph show a comparison of the cumulative total shareholder return for OMH's common stock, the NYSE Financial Sector (Total Return) Index, and the NYSE Composite (Total Return) Index from December 31, 2017 through December 31, 2022.
OMH is not obligated to purchase any shares under the program, which may be modified, suspended or discontinued at any time. 36 Table of Contents STOCK PERFORMANCE The following data and graph show a comparison of the cumulative total shareholder return for OMH's common stock, the NYSE Financial Sector (Total Return) Index, and the NYSE Composite (Total Return) Index from December 31, 2018 through December 31, 2023.
To provide funding for the dividends mentioned above, OMFC paid dividends to OMH of $471 million and $1.3 billion in 2022 and 2021, respectively. Because we are holding companies and have no direct operations, we will only be able to pay dividends from our available cash on hand and any funds we receive from our subsidiaries.
To provide funding for the dividends mentioned above, OMFC paid dividends to OMH of $478 million and $471 million in 2023 and 2022, respectively. Because we are holding companies and have no direct operations, we will only be able to pay dividends from our available cash on hand and any funds we receive from our subsidiaries.
See Notes 8 and 10 of the Notes to the Consolidated Financial Statements included in this report for further information on OMFC's debt agreements and our insurance subsidiary dividends, respectively.
See Notes 8 and 10 of the Notes to the Consolidated Financial Statements in Part II - Item 8 in this report for further information on OMFC's debt agreements and our insurance subsidiary dividends, respectively.
This figure does not reflect the beneficial ownership of shares held in nominee name. On January 31, 2023, the closing price for OMH's common stock, as reported on the NYSE, was $43.14. DIVIDEND POLICY In February of 2019, the Board announced a program of quarterly dividends.
This figure does not reflect the beneficial ownership of shares held in nominee name. On January 31, 2024, the closing price for OMH's common stock, as reported on the NYSE, was $47.60. DIVIDEND POLICY In February of 2019, the Board announced a program of quarterly dividends.
Removed
At December 31, 2017 2018 2019 2020 2021 2022 OneMain Holdings, Inc. $ 100.00 $ 93.46 $ 175.88 $ 238.02 $ 294.29 $ 214.36 NYSE Composite Index 100.00 91.21 114.70 122.83 148.42 134.75 NYSE Financial Sector Index 100.00 86.93 112.73 110.21 138.03 120.56
Added
At December 31, 2018 2019 2020 2021 2022 2023 OneMain Holdings, Inc. $ 100.00 $ 189.30 $ 245.53 $ 316.21 $ 229.37 $ 374.03 NYSE Composite Index 100.00 125.41 133.49 162.71 147.75 168.32 NYSE Financial Sector Index 100.00 129.21 125.41 158.88 138.68 162.51

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest change(dollars in millions, except per share amounts) At or for the Years Ended December 31, 2022 2021 2020 Interest income $ 4,435 $ 4,364 $ 4,368 Interest expense 892 937 1,027 Provision for finance receivable losses 1,402 593 1,319 Net interest income after provision for finance receivable losses 2,141 2,834 2,022 Other revenues 629 531 526 Other expenses 1,607 1,624 1,571 Income before income taxes 1,163 1,741 977 Income taxes 285 427 247 Net income $ 878 $ 1,314 $ 730 Share Data: Earnings per share: Diluted $ 7.06 $ 9.87 $ 5.41 Selected Financial Statistics (a) Total finance receivables: Net finance receivables $ 19,986 $ 19,212 $ 18,084 Average net receivables $ 19,440 $ 18,281 $ 17,997 Yield 22.79 % 23.84 % 24.24 % Gross charge-off ratio 7.40 % 5.41 % 6.46 % Recovery ratio (1.29) % (1.21) % (0.92) % Net charge-off ratio 6.10 % 4.20 % 5.54 % Personal loans: Net finance receivables $ 19,879 $ 19,187 $ 18,084 Origination volume $ 13,879 $ 13,825 $ 10,729 Number of accounts 2,334,097 2,336,845 2,304,951 Number of accounts originated 1,365,989 1,388,123 1,099,767 30-89 Delinquency ratio 3.07 % 2.43 % 2.28 % Credit cards (b): Net finance receivables $ 107 $ 25 $ — Purchase volume $ 172 $ 26 $ — Number of open accounts 135,335 65,513 — 30-89 Delinquency ratio 5.90 % 0.08 % — % Debt balances: Long-term debt balance $ 18,281 $ 17,750 $ 17,800 Average daily debt balance $ 17,854 $ 17,441 $ 18,080 (a) See “Glossary” at the beginning of this report for formulas and definitions of our key performance ratios.
Biggest change(dollars in millions, except per share amounts) At or for the Years Ended December 31, 2023 2022 2021 Interest income $ 4,564 $ 4,435 $ 4,364 Interest expense 1,019 892 937 Provision for finance receivable losses 1,721 1,402 593 Net interest income after provision for finance receivable losses 1,824 2,141 2,834 Other revenues 735 629 531 Other expenses 1,719 1,615 1,624 Income before income taxes 840 1,155 1,741 Income taxes 199 283 427 Net income $ 641 $ 872 $ 1,314 Share Data: Earnings per share: Diluted $ 5.32 $ 7.01 $ 9.88 Selected Financial Statistics * Total finance receivables: Net finance receivables $ 21,349 $ 19,986 $ 19,212 Average net receivables $ 20,527 $ 19,440 $ 18,281 Gross charge-off ratio 8.74 % 7.40 % 5.41 % Recovery ratio (1.26) % (1.29) % (1.21) % Net charge-off ratio 7.48 % 6.10 % 4.20 % Personal loans: Net finance receivables $ 21,019 $ 19,879 $ 19,187 Yield 22.20 % 22.78 % 23.84 % Origination volume $ 12,851 $ 13,879 $ 13,825 Number of accounts 2,415,058 2,334,097 2,336,845 Number of accounts originated 1,258,813 1,365,989 1,388,123 Net charge-off ratio 7.42 % 6.09 % 4.20 % 30-89 Delinquency ratio 3.28 % 3.07 % 2.43 % Credit cards: Net finance receivables $ 330 $ 107 $ 25 Purchase volume $ 442 $ 172 $ 26 Number of open accounts 430,784 135,335 65,513 Debt balances: Long-term debt balance $ 19,813 $ 18,281 $ 17,750 Average daily debt balance $ 19,047 $ 17,854 $ 17,441 * See “Glossary” at the beginning of this report for formulas and definitions of our key performance ratios. 43 Table of Contents Comparison of Consolidated Results for 2023 and 2022 Interest income increased $129 million or 3% in 2023 when compared to 2022 due to growth in average net receivables, partially offset by lower yield.
We may adjust the amounts determined by our model for management’s estimate of the effects of model imprecision which include but are not limited to, any changes to underwriting criteria and portfolio seasoning. Forecasting macroeconomic conditions requires significant judgment and estimation uncertainty.
We may adjust the amounts determined by our model for management’s estimate of the effects of model imprecision, which include but are not limited to, any changes to underwriting criteria and portfolio seasoning. Forecasting macroeconomic conditions requires significant judgment and involves estimation uncertainty.
The table below outlines OMFC’s long-term corporate debt ratings and outlook by rating agencies: As of December 31, 2022 Rating Outlook S&P BB Stable Moody’s Ba2 Stable KBRA BB+ Positive Currently, no other entity has a corporate debt rating, though they may be rated in the future.
The table below outlines OMFC’s long-term corporate debt ratings and outlook by rating agencies: As of December 31, 2023 Rating Outlook S&P BB Stable Moody’s Ba2 Stable KBRA BB+ Positive Currently, no other entity has a corporate debt rating, though they may be rated in the future.
Macroeconomic Sensitivity To demonstrate the sensitivity of forecasting macroeconomic conditions, we compared the output of our model using a baseline scenario to that of a downside scenario. As of December 31, 2022, the impact of a ten percentage point increase in weighting towards a downside scenario increased the estimate by approximately $25 million.
Macroeconomic Sensitivity To demonstrate the sensitivity of forecasting macroeconomic conditions, we compared the output of our model using a baseline scenario to that of a downside scenario. As of December 31, 2023, the impact of a ten percentage point increase in weighting towards a downside scenario increased the estimate by approximately $25 million.
These patterns are then applied to the current portfolio to obtain an estimate of future losses. Management exercises its judgment when determining the amount of allowance for finance receivable losses. Our judgment is based on quantitative analyses, qualitative factors, such as recent portfolio, industry, and other economic trends, and experience in the consumer finance industry.
These patterns are then applied to the current portfolio to obtain an estimate of future losses. 56 Table of Contents Management exercises its judgment when determining the amount of allowance for finance receivable losses. Our judgment is based on quantitative analyses, qualitative factors, such as recent portfolio, industry, and other economic trends, and experience in the consumer finance industry.
See Note 8 of the Notes to the Consolidated Financial Statements in Part II - Item 8 included in this report for more information on the restrictive covenants under OMFC’s debt agreements, as well as the guarantees of OMFC’s long-term debt. 54 Table of Contents Securitized Borrowings We execute private securitizations under Rule 144A of the Securities Act of 1933, as amended.
See Note 8 of the Notes to the Consolidated Financial Statements in Part II - Item 8 included in this report for more information on the restrictive covenants under OMFC’s debt agreements, as well as the guarantees of OMFC’s long-term debt. Securitized Borrowings We execute private securitizations under Rule 144A of the Securities Act of 1933, as amended.
Comparison of Consolidated Results for 2021 and 2020 For a comparison of OMH's results of operation for the years ended 2021 and 2020, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—OMH’s Consolidated Results” in Part II - Item 7 of OMH's Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on February 11, 2022. 42 Table of Contents NON-GAAP FINANCIAL MEASURES Management uses C&I adjusted pretax income (loss), a non-GAAP financial measure, as a key performance measure of our segment.
Comparison of Consolidated Results for 2022 and 2021 For a comparison of OMH's results of operation for the years ended 2022 and 2021, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—OMH’s Consolidated Results” in Part II - Item 7 of OMH's Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 10, 2023. 44 Table of Contents NON-GAAP FINANCIAL MEASURES Management uses C&I adjusted pretax income (loss), a non-GAAP financial measure, as a key performance measure of our segment.
Future purchases may be made through the open market, privately negotiated transactions with third parties, or pursuant to one or more tender or exchange offers, all of which are subject to terms, prices, and consideration we may determine at our discretion. During the year ended December 31, 2022, OMH generated net income of $878 million.
Future purchases may be made through the open market, privately negotiated transactions with third parties, or pursuant to one or more tender or exchange offers, all of which are subject to terms, prices, and consideration we may determine at our discretion. During the year ended December 31, 2023, OMH generated net income of $641 million.
Securitization Transactions Completed - ODART 2022-1, OMFIT 2022-2, and OMFIT 2022-3 For information regarding the issuances of our secured debt, see “Liquidity and Capital Resources” under Management’s Discussion and Analysis of Financial Condition and Results of Operations in this report.
Securitization Transactions Completed - ODART 2023-1, OMFIT 2023-1, and OMFIT 2023-2 For information regarding the issuances of our secured debt, see “Liquidity and Capital Resources” under Management’s Discussion and Analysis of Financial Condition and Results of Operations in this report.
OMH's Investing Activities Net cash used for investing activities of $2.1 billion for both the years ended December 31, 2022 and 2021 was primarily due to net principal originations and purchases of finance receivables and purchases of available-for-sale and other securities, partially offset by the proceeds from sales of finance receivables and calls, sales, and maturities of available-for-sale and other securities.
Net cash used for investing activities of $2.1 billion for both the years ended December 31, 2022 and 2021 was primarily due to net principal originations and purchases of finance receivables and purchases of available-for-sale and other securities, partially offset by the 52 Table of Contents proceeds from sales of finance receivables and calls, sales, and maturities of available-for-sale and other securities.
During the year ended December 31, 2022, we sold $720 million of gross finance receivables, compared to $505 million during the year ended December 31, 2021. See Note 4 of the Notes to the Consolidated Financial Statements included in this report for further information on the whole loan sale transactions.
During the year ended December 31, 2023, we sold $585 million of gross finance receivables, compared to $720 million during the year ended December 31, 2022. See Note 4 of the Notes to the Consolidated Financial Statements included in this report for further information on the whole loan sale transactions.
See Note 17 of the Notes to the Consolidated Financial Statements in this report for a description of our segment, methodologies used to allocate revenues and expenses to our C&I segment, and reconciliations of segment total to consolidated financial statement amounts.
See Note 17 of the Notes to the Consolidated Financial Statements in Part II - Item 8 in this report for a description of our segment, methodologies used to allocate revenues and expenses to our C&I segment, and reconciliations of segment total to consolidated financial statement amounts.
Net cash used for financing activities of $1.8 billion and $370 million for the years ended December 31, 2021 and 2020, respectively, were primarily due to debt repayments, cash dividends paid, and the cash paid to repurchase common stock, partially offset by the issuance and borrowings of long-term debt.
Net cash used for financing activities of $326 million and $1.8 billion for the years ended December 31, 2022 and 2021, respectively, were primarily due to repayments and repurchases of long-term debt, cash dividends paid, and the cash paid to repurchase common stock, partially offset by the issuance and borrowings of long-term debt.
See Note 17 of the Notes to the Consolidated Financial Statements included in this report for more information about our segment. 37 Table of Contents HOW WE ASSESS OUR BUSINESS PERFORMANCE We closely monitor the primary drivers of pretax operating income, which consist of the following: Interest Income We track interest income, including certain fees earned on our finance receivables, and continually monitor the components that impact our yield.
See Note 17 of the Notes to the Consolidated Financial Statements in Part II - Item 8 in this report for more information about our segment. 39 Table of Contents HOW WE ASSESS OUR BUSINESS PERFORMANCE We closely monitor the primary drivers of pretax operating income, which consist of the following: Interest Income We track interest income, including certain fees earned on our finance receivables, and continually monitor the components that impact our yield.
Due to the nominal differences between OMFC and OMH, content throughout this section relates only to OMH. See Note 1 of the Notes to the Consolidated Financial Statements included in this report for further information. OMH'S CONSOLIDATED RESULTS See the table below for OMH's consolidated operating results and selected financial statistics.
Due to the nominal differences between OMFC and OMH, content throughout this section relates only to OMH. See Note 1 of the Notes to the Consolidated Financial Statements in Part II - Item 8 in this report for further information. OMH'S CONSOLIDATED RESULTS See the table below for OMH's consolidated operating results and selected financial statistics.
(b) Future interest payments on floating-rate debt are estimated based upon rates in effect at December 31, 2022. 56 Table of Contents OFF-BALANCE SHEET ARRANGEMENTS We have no material off-balance sheet arrangements as defined by SEC rules, and we had no material off-balance sheet exposure to losses associated with unconsolidated VIEs at December 31, 2022 or December 31, 2021.
(b) Future interest payments on floating-rate debt are estimated based upon rates in effect at December 31, 2023. OFF-BALANCE SHEET ARRANGEMENTS We have no material off-balance sheet arrangements as defined by SEC rules, and we had no material off-balance sheet exposure to losses associated with unconsolidated VIEs at December 31, 2023 or December 31, 2022.
Comparison of Adjusted Pretax Income for 2021 and 2020 For a comparison of OMH's adjusted pretax income for C&I for the years ended 2021 and 2020, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—OMH’s Consolidated Results” in Part II -Item 7 of OMH's Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on February 11, 2022. 45 Table of Contents Credit Quality FINANCE RECEIVABLES Our net finance receivables, consisting of personal loans and credit cards, were $20.0 billion at December 31, 2022 and $19.2 billion at December 31, 2021.
Comparison of Adjusted Pretax Income for 2022 and 2021 For a comparison of OMH's adjusted pretax income for C&I for the years ended 2022 and 2021, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—OMH’s Consolidated Results” in Part II -Item 7 of OMH's Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 10, 2023. 47 Table of Contents Credit Quality FINANCE RECEIVABLES Our net finance receivables, consisting of personal loans and credit cards, were $21.3 billion at December 31, 2023 and $20.0 billion at December 31, 2022.
We expect interest expense to fluctuate based on changes in the secured versus unsecured mix of our debt, time to maturity, the cost of funds rate, and utilization of revolving conduit facilities.
We expect interest expense to fluctuate based on changes in the secured versus unsecured mix of our debt, time to maturity, interest rates, and utilization of revolving conduit facilities.
Credit insurance and non-credit insurance products are provided by our affiliated insurance companies. We offer GAP coverage as a waiver product or insurance. We also offer optional membership plans from an unaffiliated company. OUR SEGMENT At December 31, 2022, Consumer and Insurance (“C&I”) is our only reportable segment, which includes personal loans, credit cards, and insurance products.
Credit insurance and non-credit insurance products are provided by our affiliated insurance companies. We offer Guaranteed Asset Protection (“GAP”) coverage as a waiver product or insurance. We also offer optional membership plans from an unaffiliated company. OUR SEGMENT At December 31, 2023, Consumer and Insurance (“C&I”) is our only reportable segment, which includes personal loans, credit cards, and optional products.
At December 31, 2022, we had $1.8 billion of investment securities, which are all held as part of our insurance operations and are unavailable for general corporate purposes. 53 Table of Contents Liquidity Risks and Strategies OMFC’s credit ratings are non-investment grade, which has a significant impact on our cost and access to capital.
At December 31, 2023, we had $1.7 billion of investment securities, which are all held as part of our insurance operations and are unavailable for general corporate purposes. Liquidity Risks and Strategies OMFC’s credit ratings are non-investment grade, which has a significant impact on our cost and access to capital.
To provide funding for the OMH dividend, the OMFC Board of Directors authorized a dividend in the amount of up to $121 million payable on or after February 17, 2023.
To provide funding for the OMH dividend, the OMFC Board of Directors authorized a dividend in the amount of up to $121 million payable on or after February 21, 2024.
Due to the nominal differences between OMFC and OMH, content throughout this section relate only to OMH. See Note 1 of the Notes to the Consolidated Financial Statements included in this report for further information.
Due to the nominal differences between OMFC and OMH, content throughout this section relate only to OMH. See Note 1 of the Notes to the Consolidated Financial Statements in Part II - Item 8 in this report for further information.
See Notes 8 and 9 of the Notes to the Consolidated Financial Statements included in this report for further information on our long-term debt, securitization transactions, private secured term funding, and revolving conduit facilities. 51 Table of Contents Credit Ratings Our credit ratings impact our ability to access capital markets and our borrowing costs.
See Notes 8 and 9 of the Notes to the Consolidated Financial Statements in Part II - Item 8 in this report for further information on our long-term debt, securitization transactions, private secured term funding, and revolving conduit facilities. Credit Ratings Our credit ratings impact our ability to access capital markets and our borrowing costs.
Our branch and central operation team members work with customers as necessary and offer a variety of borrower assistance programs to help customers continue to make payments. DELINQUENCY We monitor delinquency trends to evaluate the risk of future credit losses and employ advanced analytical tools to manage our exposure.
Our branch and central operation team members work closely with customers as necessary and offer a variety of borrower assistance programs to help support our customers. DELINQUENCY We monitor delinquency trends to evaluate the risk of future credit losses and employ advanced analytical tools to manage performance.
At December 31, 2022, we had approximately 135 thousand open credit card customer accounts, totaling $107 million of net finance receivables, compared to approximately 66 thousand open credit card customer accounts, totaling $25 million of net finance receivables at December 31, 2021. • Insurance Products — We offer our custom ers optional credit insurance products (life, disability, and involuntary unemployment insurance) and optional non-credit insurance products through both our branch network and our centralized operations.
At December 31, 2023, we had approximately 431 thousand open credit card customer accounts, totaling $330 million of net finance receivables, compared to approximately 135 thousand open credit card customer accounts, totaling $107 million of net finance receivables at December 31, 2022. • Optional Products — We offer our custom ers optional credit insurance products (life, disability, and involuntary unemployment insurance) and optional non-credit insurance products through both our branch network and our central operations.
An index to our management’s discussion and analysis follows: Topic Page Overview 37 Recent Developments and Outlook 39 Results of Operations 41 Segment Results 44 Credit Quality 46 Liquidity and Capital Resources 51 Critical Accounting Policies and Estimates 57 Recent Accounting Pronouncements 58 Seasonality 58 36 Table of Contents Overview We operate in the United States and market our personal loans in 44 states.
An index to our management’s discussion and analysis follows: Topic Page Overview 39 Recent Developments and Outlook 41 Results of Operations 43 Segment Results 46 Credit Quality 48 Liquidity and Capital Resources 50 Critical Accounting Policies and Estimates 56 Recent Accounting Pronouncements 57 Seasonality 57 38 Table of Contents Overview We operate in the United States and market our personal loans in 44 states.
Based on our estimates and considering the risks and uncertainties of our plans, we believe that we will have adequate liquidity to finance and operate our businesses and repay our obligations as they become due for at least the next 24 months.
Based on our estimates and considering the risks and uncertainties of our plans, we believe that we will have adequate liquidity to finance and operate our businesses and repay our obligations as they become due.
On February 7, 2023, OMH declared a dividend of $1.00 per share payable on February 24, 2023 to record holders of OMH's common stock as of the close of business on February 17, 2023.
On February 7, 2024, OMH declared a dividend of $1.00 per share payable on February 23, 2024 to record holders of OMH's common stock as of the close of business on February 20, 2024.
OMH's Cash and Investments At December 31, 2022, we had $498 million of cash and cash equivalents, which included $147 million of cash and cash equivalents held at our regulated insurance subsidiaries or for other operating activities that is unavailable for general corporate purposes.
OMH's Cash and Investments At December 31, 2023, we had $1.0 billion of cash and cash equivalents, which included $148 million of cash and cash equivalents held at our regulated insurance subsidiaries or for other operating activities that is unavailable for general corporate purposes.
OMH's Financing Activities Net cash used for financing activities of $326 million for the year ended December 31, 2022 was primarily due to repayments and repurchases of long-term debt, cash dividends paid, and the cash paid to repurchase common stock, partially offset by the issuance and borrowings of long-term debt.
OMH's Financing Activities Net cash provided by financing activities of $932 million for the year ended December 31, 2023 was primarily due to the issuance and borrowings of long-term debt, partially offset by repayments and repurchases of long-term debt and cash dividends paid.
At December 31, 2022, we had approximately 2.33 million personal loans totaling $19.9 billion of net finance receivables, of which 52% were secured by titled property, compared to approximately 2.34 million personal loans totaling $19.2 billion of net finance receivables, of which 52% were secured by titled property at December 31, 2021.
At December 31, 2023, we had approximately 2.4 million personal loans totaling $21.0 billion of net finance receivables, of which 50% were secured by titled property, compared to approximately 2.3 million personal loans totaling $19.9 billion of net finance receivables, of which 52% were secured by titled property at December 31, 2022.
No principal payments are required to be made during the first three years, followed by a subsequent one-year amortization period at the expiration of which the outstanding principal amount is due and payable.
No principal payments are required to be made until after April 25, 2025, followed by a subsequent one-year amortization period at the expiration of which the outstanding principal amount is due and payable.
Net cash used for investing activities of $751 million for the year ended December 31, 2020 was primarily due to net principal originations of finance receivables and purchases of available-for-sale and other securities, partially offset by calls, sales and maturities of available-for-sale and other securities.
OMH's Investing Activities Net cash used for investing activities of $2.9 billion for the year ended December 31, 2023 was due to net principal originations and purchases of finance receivables and purchases of available-for-sale and other securities, partially offset by the proceeds from sales of finance receivables and calls, sales, and maturities of available-for-sale and other securities.
We consider our personal loans to be nonperforming at 90 days contractually past due, at which point we stop accruing finance charges and reverse finance charges previously accrue d .
We consider our personal loans to be nonperforming at 90 days contractually past due, at which point we stop accruing finance charges and reverse finance charges previously accrue d . For credit cards, we accrue finance charges and fees until charge-off at 180 days contractually past due, at which point we reverse finance charges and fees previously accrued.
C&I adjusted pretax income (loss) represents income (loss) before income taxes on a Segment Accounting Basis and excludes the expense associated with the net loss resulting from repurchases and repayments of debt, restructuring charges, direct costs associated with COVID-19, the expense associated with the cash-settled stock-based awards, and acquisition-related transaction and integration expenses.
C&I adjusted pretax income (loss) represents income (loss) before income taxes on a Segment Accounting Basis and excludes regulatory settlements, net gain or loss resulting from repurchases and repayments of debt, and other items and strategic activities, which include direct costs associated with COVID-19, restructuring charges, and the expense associated with cash-settled stock-based awards.
As of December 31, 2022, our structured financings consisted of the following: (dollars in millions) Issue Amount (a) Initial Collateral Balance Current Note Amounts Outstanding (a) Current Collateral Balance (b) Current Weighted Average Interest Rate Original Revolving Period OMFIT 2018-2 368 381 350 400 3.87 % 5 years OMFIT 2019-2 900 947 900 995 3.30 % 7 years OMFIT 2019-A 789 892 750 892 3.78 % 7 years OMFIT 2020-1 821 958 457 556 4.34 % 2 years OMFIT 2020-2 1,000 1,053 1,000 1,053 2.03 % 5 years OMFIT 2021-1 850 904 850 904 2.46 % 5 years OMFIT 2022-S1 600 652 600 652 4.31 % 3 years OMFIT 2022-2 1,000 1,099 1,000 1,099 5.17 % 2 years OMFIT 2022-3 (c) 979 1,090 796 1,090 6.00 % 2 years ODART 2019-1 737 750 700 750 3.79 % 5 years ODART 2021-1 1,000 1,053 1,000 1,053 0.98 % 2 years ODART 2022-1 600 632 600 632 4.92 % 2 years Total securitizations $ 9,644 $ 10,411 $ 9,003 $ 10,076 (a) Issue Amount includes the retained interest amounts as applicable and the Current Note Amounts Outstanding balances reflect pay-downs subsequent to note issuance and exclude retained interest amounts.
As of December 31, 2023, our structured financings consisted of the following: (dollars in millions) Issue Amount (a) Initial Collateral Balance Current Note Amounts Outstanding (a) Current Collateral Balance (b) Current Weighted Average Interest Rate Original Revolving Period OMFIT 2018-2 $ 368 $ 381 $ 202 $ 231 4.09 % 5 years OMFIT 2019-2 900 947 900 995 3.30 % 7 years OMFIT 2019-A 789 892 750 892 3.78 % 7 years OMFIT 2020-2 1,000 1,053 1,000 1,053 2.03 % 5 years OMFIT 2021-1 850 904 850 904 2.82 % 5 years OMFIT 2022-S1 600 652 600 652 4.31 % 3 years OMFIT 2022-2 1,000 1,099 1,000 1,099 5.17 % 2 years OMFIT 2022-3 979 1,090 796 1,090 6.00 % 2 years OMFIT 2023-1 825 920 825 920 5.82 % 5 years OMFIT 2023-2 1,400 1,566 1,400 1,566 6.45 % 3 years ODART 2019-1 737 750 700 750 3.79 % 5 years ODART 2021-1 1,000 1,053 902 917 0.99 % 2 years ODART 2022-1 600 632 600 632 5.10 % 2 years ODART 2023-1 750 792 750 792 5.63 % 3 years Total securitizations $ 11,798 $ 12,731 $ 11,275 $ 12,493 (a) Issue Amount includes the retained interest amounts as applicable and the Current Note Amounts Outstanding balances reflect pay-downs subsequent to note issuance and exclude retained interest amounts.
When personal loans are contractually 60 days past due, we consider these accounts to be at an increased risk for loss and collection of these accounts is managed by our centralized operations. Use of our centralized operations teams for managing late-stage delinquency allows us to apply more advanced collection technologies and tools and drives operating efficiencies in servicing.
When personal loans are contractually 60 days past due, we consider these accounts to be at an increased risk for loss and move collection of these accounts to our central collection operations. Use of our central operations teams for managing late-stage delinquency allows us to apply more advanced collection techniques and tools to drive credit performance and operational efficiencies.
Our allowance for finance receivable losses may fluctuate based upon changes in portfolio growth, credit quality, and economic conditions. Our current methodology to estimate expected credit losses used the most recent macroeconomic forecasts, which incorporated the overall unemployment rate. Our unemployment outlook leveraged projections from various industry leading forecast providers.
Our allowance for finance receivable losses may fluctuate based upon changes in portfolio growth, credit quality, and economic conditions. Our methodology to estimate expected credit losses uses recent macroeconomic forecasts, which include forecasts for unemployment. We leverage projections from various industry leading providers.
Cash Dividends to OMH's Common Stockholders For information regarding the quarterly dividends declared by OMH, see “Liquidity and Capital Resources” under Management’s Discussion and Analysis of Financial Condition and Results of Operations in this report. 39 Table of Contents Election and Resignation of Members of the Board On January 27, 2022, Toos N.
Cash Dividends to OMH's Common Stockholders For information regarding the quarterly dividends declared by OMH, see “Liquidity and Capital Resources” under Management’s Discussion and Analysis of Financial Condition and Results of Operations in this report.
The notes mature in May of 2034. 55 Table of Contents Revolving Conduit Facilities In addition to the structured financings, we had access to 15 revolving conduit facilities with a total borrowing capacity of $6.2 billion as of December 31, 2022: (dollars in millions) Advance Maximum Balance Amount Drawn OneMain Financial Funding VII, LLC $ 600 $ — OneMain Financial Funding IX, LLC 600 — OneMain Financial Auto Funding I, LLC 550 — Seine River Funding, LLC 550 — Hudson River Funding, LLC 500 — OneMain Financial Funding VIII, LLC 400 — River Thames Funding, LLC 400 — OneMain Financial Funding X, LLC 400 50 Chicago River Funding, LLC 375 — Mystic River Funding, LLC 350 — Thayer Brook Funding, LLC 350 — Columbia River Funding, LLC 350 — Hubbard River Funding, LLC 250 — New River Funding Trust 250 — St.
(b) Inclusive of in-process replenishments of collateral for securitized borrowings in a revolving status as of December 31, 2023. 54 Table of Contents Revolving Conduit Facilities In addition to the structured financings, we had access to 16 revolving conduit facilities with a total borrowing capacity of $6.4 billion as of December 31, 2023: (dollars in millions) Advance Maximum Balance Amount Drawn OneMain Financial Funding VII, LLC $ 600 $ — OneMain Financial Auto Funding I, LLC 550 — Seine River Funding, LLC 550 — Hudson River Funding, LLC 500 — OneMain Financial Funding XI, LLC 425 — OneMain Financial Funding VIII, LLC 400 — River Thames Funding, LLC 400 — OneMain Financial Funding X, LLC 400 — OneMain Financial Funding XII, LLC 400 — Chicago River Funding, LLC 375 — Mystic River Funding, LLC 350 — Thayer Brook Funding, LLC 350 1 Columbia River Funding, LLC 350 — Hubbard River Funding, LLC 250 — New River Funding Trust 250 — St.
We also considered inflationary pressures, consumer confidence levels, and continued interest rate increases negatively impacting the economic outlook. At December 31, 2022, our economic forecast used a reasonable and supportable period of 12 months.
We also consider inflationary pressures, consumer confidence levels, and interest rate increases that may continue to impact the economic outlook. At December 31, 2023, our economic forecast used a reasonable and supportable period of 12 months.
Changes in our allowance for finance receivable losses were as follows: (dollars in millions) Consumer and Insurance Segment to GAAP Adjustment Consolidated Total Personal Loans Credit Cards Year Ended December 31, 2022 Balance at beginning of period $ 2,097 $ 5 $ (7) $ 2,095 Provision for finance receivable losses 1,376 23 3 1,402 Charge-offs (1,431) (7) — (1,438) Recoveries 252 — — 252 Balance at end of period $ 2,294 $ 21 $ (4) $ 2,311 Allowance ratio 11.54 % 19.12 % (a) 11.56 % Year Ended December 31, 2021 Balance at beginning of period $ 2,283 $ — $ (14) $ 2,269 Provision for finance receivable losses 582 5 6 $ 593 Charge-offs (990) — 1 $ (989) Recoveries 222 — — $ 222 Balance at end of period $ 2,097 $ 5 $ (7) $ 2,095 Allowance ratio 10.93 % 19.91 % (a) 10.90 % Year Ended December 31, 2020 (b) Balance at beginning of period $ 849 $ — $ (20) $ 829 Impact of adoption of ASU 2016-13 (c) 1,119 — (1) 1,118 Provision for finance receivable losses 1,313 — 6 1,319 Charge-offs (1,163) — 1 (1,162) Recoveries 165 — — 165 Balance at end of period $ 2,283 $ — $ (14) $ 2,269 Allowance ratio 12.62 % — % (a) 12.55 % (a) Not applicable.
Changes in our allowance for finance receivable losses were as follows: (dollars in millions) Consumer and Insurance Segment to GAAP Adjustment Consolidated Total Personal Loans Credit Cards Year Ended December 31, 2023 Balance at beginning of period $ 2,294 $ 21 $ (4) $ 2,311 Impact of adoption of ASU 2022-02 (a) (20) — 4 (16) Provision for finance receivable losses 1,651 70 — 1,721 Charge-offs (1,768) (27) — (1,795) Recoveries 258 1 — 259 Balance at end of period $ 2,415 $ 65 $ — $ 2,480 Allowance ratio 11.49 % 19.61 % (b) 11.62 % Year Ended December 31, 2022 Balance at beginning of period $ 2,097 $ 5 $ (7) $ 2,095 Provision for finance receivable losses 1,376 23 3 1,402 Charge-offs (1,431) (7) — (1,438) Recoveries 252 — — 252 Balance at end of period $ 2,294 $ 21 $ (4) $ 2,311 Allowance ratio 11.54 % 19.12 % (b) 11.56 % Year Ended December 31, 2021 Balance at beginning of period $ 2,283 $ — $ (14) $ 2,269 Provision for finance receivable losses 582 5 6 593 Charge-offs (990) — 1 (989) Recoveries 222 — — 222 Balance at end of period $ 2,097 $ 5 $ (7) $ 2,095 Allowance ratio 10.93 % 19.91 % (b) 10.90 % (a) As a result of the adoption of ASU 2022-02, we recorded a one-time adjustment to the allowance for finance receivable losses.
Net cash provided by operations of $2.2 billion for the year ended December 31, 2020 reflected net income of $730 million, the impact of non-cash items, and an unfavorable change in working capital of $118 million.
Net cash provided by operations of $2.4 billion for the year ended December 31, 2022 reflected net income of $872 million, the impact of non-cash items including provision for finance receivable losses of $1.4 billion, and an unfavorable change in working capital of $82 million.
LIQUIDITY OMH's Operating Activities Net cash provided by operations of $2.4 billion for the year ended December 31, 2022 reflected net income of $878 million, the impact of non-cash items, and an unfavorable change in working capital of $90 million.
LIQUIDITY OMH's Operating Activities Net cash provided by operations of $2.5 billion for the year ended December 31, 2023 reflected net income of $641 million, the impact of non-cash items including provision for finance receivable losses of $1.7 billion, and an unfavorable change in working capital of $44 million.
We also service personal loans for our whole loan sale partners. • Credit Cards — We offer credit cards through a third-party bank partner from which we purchase the receivable balances. The credit cards are offered through our branch network, direct mail marketing, and direct-to-consumer via our affiliates. Credit cards are open-ended, revolving, with a fixed rate, and are unsecured.
We also service personal loans for our whole loan sale partners. • Credit Cards — BrightWay and BrightWay+ credit cards originate through a third-party bank partner from which we purchase the receivable balances. The credit cards are offered across our branch network, through direct mail, and through our digital affiliates.
CONSUMER AND INSURANCE OMH's adjusted pretax income and selected financial statistics for C&I on an adjusted Segment Accounting Basis were as follows: (dollars in millions) At or for the Years Ended December 31, 2022 2021 2020 Interest income $ 4,429 $ 4,355 $ 4,353 Interest expense 886 930 1,007 Provision for finance receivable losses 1,399 587 1,313 Net interest income after provision for finance receivable losses 2,144 2,838 2,033 Other revenues 644 597 551 Other expenses 1,574 1,517 1,492 Adjusted pretax income (non-GAAP) $ 1,214 $ 1,918 $ 1,092 Selected Financial Statistics (a) Total finance receivables: Net finance receivables $ 19,987 $ 19,215 $ 18,091 Average net receivables $ 19,442 $ 18,286 $ 18,009 Yield 22.78 % 23.82 % 24.17 % Gross charge-off ratio 7.40 % 5.42 % 6.46 % Recovery ratio (1.29) % (1.21) % (0.92) % Net charge-off ratio 6.10 % 4.20 % 5.54 % Personal loans: Net finance receivables $ 19,880 $ 19,190 $ 18,091 Origination volume $ 13,879 $ 13,825 $ 10,729 Number of accounts 2,334,097 2,336,845 2,304,951 Number of accounts originated 1,365,989 1,388,123 1,099,767 30-89 Delinquency ratio 3.07 % 2.43 % 2.28 % Credit cards (b): Net finance receivables $ 107 $ 25 $ — Purchase volume $ 172 $ 26 $ — Number of open accounts 135,335 65,513 — 30-89 Delinquency ratio 5.90 % 0.08 % — % (a) See “Glossary” at the beginning of this report for formulas and definitions of our key performance ratios.
CONSUMER AND INSURANCE OMH's adjusted pretax income and selected financial statistics for C&I on an adjusted Segment Accounting Basis were as follows: (dollars in millions) At or for the Years Ended December 31, 2023 2022 2021 Interest income $ 4,559 $ 4,429 $ 4,355 Interest expense 1,015 886 930 Provision for finance receivable losses 1,721 1,399 587 Net interest income after provision for finance receivable losses 1,823 2,144 2,838 Other revenues 727 644 597 Other expenses 1,676 1,582 1,517 Adjusted pretax income (non-GAAP) $ 874 $ 1,206 $ 1,918 Selected Financial Statistics * Total finance receivables: Net finance receivables $ 21,349 $ 19,987 $ 19,215 Average net receivables $ 20,528 $ 19,442 $ 18,286 Gross charge-off ratio 8.74 % 7.40 % 5.42 % Recovery ratio (1.26) % (1.29) % (1.21) % Net charge-off ratio 7.48 % 6.10 % 4.20 % Personal loans: Net finance receivables $ 21,019 $ 19,880 $ 19,190 Yield 22.20 % 22.77 % 23.82 % Origination volume $ 12,851 $ 13,879 $ 13,825 Number of accounts 2,415,058 2,334,097 2,336,845 Number of accounts originated 1,258,813 1,365,989 1,388,123 Net charge-off ratio 7.42 % 6.09 % 4.20 % 30-89 Delinquency ratio 3.28 % 3.07 % 2.43 % Credit cards: Net finance receivables $ 330 $ 107 $ 25 Purchase volume $ 442 $ 172 $ 26 Number of open accounts 430,784 135,335 65,513 * See “Glossary” at the beginning of this report for formulas and definitions of our key performance ratios. 46 Table of Contents Comparison of Adjusted Pretax Income for Twelve Months Ended December 31, 2023 and 2022 Interest income increased $130 million or 3% in 2023 when compared to 2022 due to growth in average net receivables, partially offset by lower yield.
In addition to our loan originations, insurance, and other product sales activities, we also service the loans that we originate and retain on our balance sheet, as well as loans owned by third parties on their behalf in connection with our whole loan sale program and legacy businesses.
We service the loans that we originate and retain on our balance sheet, as well as loans owned by third parties on their behalf in connection with our whole loan sale program and legacy businesses. In connection with our offerings, our insurance subsidiaries offer our personal loan customers optional credit and non-credit insurance and other optional products.
Stock Repurchased During the year ended December 31, 2022, OMH repurchased 7,181,023 shares of its common stock through its stock repurchase program for an aggregate total of $303 million, including commissions and fees. As of December 31, 2022, OMH held a total of 13,813,476 shares of treasury stock.
Stock Repurchased During the year ended December 31, 2023, OMH repurchased 1,651,717 shares of its common stock through its stock repurchase program for an aggregate total of $65 million, including commissions and fees. As of December 31, 2023, OMH held a total of 15,383,804 shares of treasury stock.
(c) As a result of the adoption of ASU 2016-13, we recorded a one-time adjustment to the allowance for finance receivable losses. 48 Table of Contents The current delinquency status of our finance receivable portfolio, inclusive of recent borrower performance, volume of our TDR activity, level and recoverability of collateral securing our finance receivable portfolio, and the reasonable and supportable forecast of economic conditions are the primary drivers that can cause fluctuations in our allowance ratio from period to period.
(b) Not applicable. 49 Table of Contents The current delinquency status of our finance receivable portfolio, inclusive of recent borrower performance and loss performance, volume of our modified finance receivable activity, level and recoverability of collateral securing our finance receivable portfolio, and the reasonable and supportable forecast of economic conditions are the primary drivers that can cause fluctuations in our allowance ratio from period to period.
We monitor the allowance ratio to ensure we have a sufficient level of allowance for finance receivable losses based on the estimated lifetime expected credit losses in our finance receivable portfolio. The allowance for finance receivable losses as a percentage of net finance receivables for personal loans increased from the prior year period primarily due to the weakened macroeconomic environment.
We monitor the allowance ratio to ensure we have a sufficient level of allowance for finance receivable losses based on the estimated lifetime expected credit losses in our finance receivable portfolio.
OMH’s net cash inflow from operating and investing activities totaled $268 million for the year ended December 31, 2022. At December 31, 2022, our scheduled principal and interest payments for 2023 on our existing debt (excluding securitizations) totaled $1.5 billion. As of December 31, 2022, we had $9.3 billion of unencumbered loans.
OMH’s net cash outflow from operating and investing activities totaled $343 million for the year ended December 31, 2023. At December 31, 2023, our scheduled interest payments for 2024 totaled $526 million and there were no scheduled principal payments for 2024 on our existing unsecured debt. As of December 31, 2023, we had $8.4 billion of unencumbered receivables.
See Note 10 of the Notes to the Consolidated Financial Statements in Part II - Item 8 included in this report for further information on these state restrictions and the dividends paid by our insurance subsidiaries from 2020 through 2022.
See Note 10 of the Notes to the Consolidated Financial Statements in Part II - Item 8 included in this report for further information on these state restrictions and the dividends paid by our insurance subsidiaries from 2021 through 2023. 53 Table of Contents OUR DEBT AGREEMENTS The debt agreements which OMFC and its subsidiaries are a party to include customary terms and conditions, including covenants and representations and warranties.
We will continue to incorporate updates to our macroeconomic assumptions, as necessary, which could lead to further adjustments in our allowance for finance receivable losses, allowance ratio, and provision for finance receivable losses.
Our financial condition and results of operations could be affected by macroeconomic conditions, including changes in unemployment, inflation, interest rates, and consumer confidence. We will continue to incorporate updates to our macroeconomic assumptions, as necessary, which could lead to further adjustments in our allowance for finance receivable losses, allowance ratio, and provision for finance receivable losses.
We accrue finance charges and fees on credit cards until charge-off at approximately 180 days past due, at which point we reverse finance charges and fees previously accrued. 46 Table of Contents The delinquency information for net finance receivables on a Segment Accounting Basis was as follows: Consumer and Insurance (dollars in millions) Personal Loans Credit Cards December 31, 2022 Current $ 18,726 $ 93 30-59 days past due 357 3 60-89 days past due 253 3 90+ days past due 544 8 Total net finance receivables $ 19,880 $ 107 Delinquency ratio 30-89 days past due 3.07 % 5.90 % 30+ days past due 5.80 % 13.08 % 60+ days past due 4.01 % 9.69 % 90+ days past due 2.74 % 7.18 % December 31, 2021 Current $ 18,340 $ 25 30-59 days past due 282 — 60-89 days past due 185 — 90+ days past due 383 — Total net finance receivables $ 19,190 $ 25 Delinquency ratio 30-89 days past due 2.43 % 0.08 % 30+ days past due 4.43 % 0.08 % 60+ days past due 2.96 % — % 90+ days past due 2.00 % — % 47 Table of Contents ALLOWANCE FOR FINANCE RECEIVABLE LOSSES We estimate and record an allowance for finance receivable losses to cover the estimated lifetime expected credit losses on our finance receivables.
The delinquency information for net finance receivables on a Segment Accounting Basis was as follows: Consumer and Insurance (dollars in millions) Personal Loans Credit Cards December 31, 2023 Current $ 19,725 $ 297 30-89 days past due 689 16 90+ days past due 605 17 Total net finance receivables $ 21,019 $ 330 Delinquency ratio 30-89 days past due 3.28 % 4.93 % 30+ days past due 6.16 % 9.96 % 90+ days past due 2.88 % 5.03 % December 31, 2022 Current $ 18,726 $ 93 30-89 days past due 610 6 90+ days past due 544 8 Total net finance receivables $ 19,880 $ 107 Delinquency ratio 30-89 days past due 3.07 % 5.90 % 30+ days past due 5.80 % 13.08 % 90+ days past due 2.74 % 7.18 % 48 Table of Contents ALLOWANCE FOR FINANCE RECEIVABLE LOSSES We estimate and record an allowance for finance receivable losses to cover the expected lifetime credit losses on our finance receivables.
See our “Dividend Policy” in Part II - Item 5 of this report for further information. 52 Table of Contents Whole Loan Sale Transactions As of December 31, 2022, we have whole loan sale flow agreements with third parties, with remaining terms of up to one year, in which we agreed to sell a combined total of $180 million gross receivables per quarter of newly originated unsecured personal loans along with any associated accrued interest.
Whole Loan Sale Transactions We have whole loan sale flow agreements with third parties, with remaining terms of less than one year, in which we agreed to sell a total of $60 million gross receivables per quarter of newly originated unsecured personal loans along with any associated accrued interest.
To provide funding for the OMH stock repurchases, the OMFC Board of Directors authorized dividend payments in the amount of $280 million. For additional information regarding the shares repurchased, see Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities of Part II included in this report.
To provide funding for the OMH stock repurchases, the OMFC Board of Directors authorized dividend payments in the amount of $60 million. For additional information regarding the shares repurchased, see Item 5.
OMH's reconciliations of income before income tax expense on a Segment Accounting Basis to C&I adjusted pretax income (non-GAAP) and C&I pretax capital generation (non-GAAP) were as follows: (dollars in millions) Years Ended December 31, 2022 2021 2020 Consumer and Insurance Income before income taxes - Segment Accounting Basis $ 1,177 $ 1,788 $ 1,021 Adjustments: Net loss on repurchases and repayments of debt 26 70 36 Restructuring charges 7 — 7 Direct costs associated with COVID-19 4 6 17 Cash-settled stock-based awards — 54 — Acquisition-related transaction and integration expenses — — 11 Adjusted pretax income (non-GAAP) 1,214 1,918 1,092 Provision for finance receivable losses 1,399 587 1,313 Net charge-offs (1,186) (768) (998) Pretax capital generation (non-GAAP) $ 1,427 $ 1,737 $ 1,407 43 Table of Contents Segment Results The results of OMFC are consolidated into the results of OMH.
OMH's reconciliations of income before income tax expense on a Segment Accounting Basis to C&I adjusted pretax income (non-GAAP) and C&I pretax capital generation (non-GAAP) were as follows: (dollars in millions) Years Ended December 31, 2023 2022 2021 Consumer and Insurance Income before income taxes - Segment Accounting Basis $ 845 $ 1,169 $ 1,788 Adjustments: Regulatory settlements 26 — — Net loss on repurchases and repayments of debt — 26 70 Other 3 11 60 Adjusted pretax income (non-GAAP) 874 1,206 1,918 Provision for finance receivable losses 1,721 1,399 587 Net charge-offs (1,536) (1,186) (768) Pretax capital generation (non-GAAP) $ 1,059 $ 1,419 $ 1,737 45 Table of Contents Segment Results The results of OMFC are consolidated into the results of OMH.
Therefore, this hypothetical analysis is not intended to represent our expectation of changes in our estimate of expected credit losses due to a change in the macroeconomic environment, nor does it consider management’s judgment of other quantitative and qualitative information which could increase or decrease the estimate. 57 Table of Contents TDR FINANCE RECEIVABLES When we modify a personal 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.
Therefore, this hypothetical analysis is not intended to represent our expectation of changes in our estimate of expected credit losses due to a change in the macroeconomic environment, nor does it consider management’s judgment of other quantitative and qualitative information which could increase or decrease the estimate.
See Note 5 of the Notes to the Consolidated Financial Statements included in this report for more information about the changes in the allowance for finance receivable losses. TDR FINANCE RECEIVABLES We may modify the terms of our finance receivables to assist borrowers experiencing financial difficulties.
See Note 5 of the Notes to the Consolidated Financial Statements in Part II - Item 8 in this report for more information about the changes in the allowance for finance receivable losses.
OMH’s dividend payments may change from time to time, and the Board may choose not to continue to declare dividends in the future.
OMH’s dividend payments may change from time to time, and the Board may choose not to continue to declare dividends in the future. See our “Dividend Policy” in Part II - Item 5 of this report for further information.
Delinquencies on our personal loans are generally lower in the first and second quarters and tend to rise throughout the remainder of the year. These seasonal trends contribute to fluctuations in our operating results and cash needs throughout the year. 58 Table of Contents
These seasonal trends contribute to fluctuations in our operating results and cash needs throughout the year. 57 Table of Contents
Our experienced management team remains focused on maintaining a solid balance sheet with a strong liquidity runway and capital coverage, upholding a conservative and disciplined underwriting model, and building strong relationships with our customers to ensure that we are serving them well.
Our experienced management team remains focused on maintaining a strong balance sheet with a long liquidity runway and adequate capital while maintaining a conservative and disciplined underwriting model.
OUR PRODUCTS Our product offerings include: • Personal Loans — We offer personal loans through our branch network, centralized operations, and our website, www.omf.com, to customers who need timely access to cash.
Our personal loans, credit cards, and other products help customers meet everyday needs and take steps to improve their financial well-being. OUR PRODUCTS Our product offerings include: • Personal Loans — We offer personal loans through our branch network, central operations, auto dealership network, and our website, www.onemainfinancial.com, to customers who need timely access to cash.
At December 31, 2022, we managed a combined total of 2.56 million customer accounts and $20.8 billion of managed receivables, compared to 2.45 million customer accounts and $19.6 billion of managed receivables at December 31, 2021.
At December 31, 2023, we had $22.2 billion of managed receivables due from approximately 3.0 million customer accounts, compared to $20.8 billion of managed receivables due from approximately 2.6 million customer accounts at December 31, 2022.
In connection with our offerings, our insurance subsidiaries offer our personal loan customers optional credit and non-credit insurance, and other insurance-related products. We strive to meet our customers at their preferred channel and to deliver a seamless customer experience through our digital platforms or working with our expert team members at our approximately 1,400 locations.
We also offer two credit cards, BrightWay and BrightWay+, which are designed to reward customers for responsible credit activity, such as consistent on-time payments. We strive to meet our customers at their preferred channel and to deliver a seamless customer experience through our digital platforms, distribution partnerships, or working with our expert team members at our approximately 1,400 locations.
Cash Dividend to OMH's Common Stockholders As of December 31, 2022, the dividend declarations for the current year by the Board were as follows: Declaration Date Record Date Payment Date Dividend Per Share Amount Paid (in millions) February 2, 2022 February 14, 2022 February 18, 2022 $ 0.95 $ 121 April 28, 2022 May 9, 2022 May 13, 2022 0.95 118 July 27, 2022 August 8, 2022 August 12, 2022 0.95 117 October 26, 2022 November 7, 2022 November 14, 2022 0.95 116 Total $ 3.80 $ 472 To provide funding for the dividend, OMFC paid dividends of $471 million to OMH during the year ended December 31, 2022.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities of Part II in this report. 51 Table of Contents Cash Dividend to OMH's Common Stockholders As of December 31, 2023, the dividend declarations for the current year by the Board were as follows: Declaration Date Record Date Payment Date Dividend Per Share Amount Paid (in millions) February 7, 2023 February 17, 2023 February 24, 2023 $ 1.00 $ 121 April 25, 2023 May 5, 2023 May 12, 2023 1.00 121 July 26, 2023 August 7, 2023 August 11, 2023 1.00 120 October 25, 2023 November 6, 2023 November 10, 2023 1.00 120 Total $ 4.00 $ 482 To provide funding for the dividend, OMFC paid dividends of $478 million to OMH during the year ended December 31, 2023.
At December 31, 2022, we had $10.3 billion of gross finance receivables pledged as collateral for our securitizations, revolving conduit facilities, and private secured term funding. Private Secured Term Funding On April 25, 2022, OMFC entered into a $350 million private secured term funding collateralized by our personal loans.
During the year ended December 31, 2023, we entered into two new revolving conduit facilities. At December 31, 2023, the borrowing capacity of our revolving conduit facilities was $6.4 billion. At December 31, 2023, we had $12.6 billion of gross finance receivables pledged as collateral for our securitizations, conduit facilities, and private secured term funding.
We believe we are well positioned to serve our customers, invest in our business, and drive long-term growth to create value for our stockholders as we navigate an ever-evolving economic, social, political, and regulatory environment. 40 Table of Contents Results of Operations The results of OMFC are consolidated into the results of OMH.
As we pursue our key initiatives, we are confident in our ability to increase shareholder value and remain resilient and adaptable to navigate an ever-evolving economic, social, political, and regulatory landscape. 42 Table of Contents Results of Operations The results of OMFC are consolidated into the results of OMH.
Lawrence River Funding, LLC 250 — Total $ 6,175 $ 50 Contractual Obligations At December 31, 2022, our material contractual obligations were as follows: (dollars in millions) 2023 2024-2025 2026-2027 2028+ Securitizations Private Secured Term Funding Revolving Conduit Facilities Total Principal maturities on long-term debt: Securitization debt (a) $ — $ — $ — $ — $ 9,003 $ — $ — $ 9,003 Medium-term notes 1,004 2,519 2,350 2,933 — — — 8,806 Junior subordinated debt — — — 350 — — — 350 Private secured term funding (a) — — — — — 350 — 350 Revolving conduit facilities (a) — — — — — — 50 50 Total principal maturities 1,004 2,519 2,350 3,283 9,003 350 50 18,559 Interest payments on debt (b) 513 787 435 1,124 899 64 9 3,831 Total $ 1,517 $ 3,306 $ 2,785 $ 4,407 $ 9,902 $ 414 $ 59 $ 22,390 (a) On-balance sheet securitizations, private secured term funding, and borrowings under revolving conduit facilities are not included in maturities by period due to their variable monthly payments.
Lawrence River Funding, LLC 250 — Total $ 6,400 $ 1 See “Liquidity and Capital Resources - Sources and Uses of Funds - Securitizations and Borrowings from Revolving Conduit Facilities” above for information on the credit card revolving conduit facilities entered into subsequent to December 31, 2023. 55 Table of Contents Contractual Obligations At December 31, 2023, our material contractual obligations were as follows: (dollars in millions) 2024 2025-2026 2027-2028 2029+ Securitizations Private Secured Term Funding Revolving Conduit Facilities Total Principal maturities on long-term debt: Securitization debt (a) $ — $ — $ — $ — $ 11,275 $ — $ — $ 11,275 Medium-term notes — 2,849 2,100 3,182 — — — 8,131 Junior subordinated debt — — — 350 — — — 350 Private secured term funding (a) — — — — — 350 — 350 Revolving conduit facilities (a) — — — — — — 1 1 Total principal maturities — 2,849 2,100 3,532 11,275 350 1 20,107 Interest payments on debt (b) 526 883 605 1,213 1,440 51 — 4,718 Total $ 526 $ 3,732 $ 2,705 $ 4,745 $ 12,715 $ 401 $ 1 $ 24,825 (a) On-balance sheet securitizations, private secured term funding, and borrowings under revolving conduit facilities are not included in maturities by period due to their variable monthly payments.
Securitizations and Borrowings from Revolving Conduit Facilities During the year ended December 31, 2022, we completed four personal loan securitizations (OMFIT 2022-S1, ODART 2022-1, OMFIT 2022-2, and OMFIT 2022-3, see “Securitized Borrowings” below) and redeemed five personal loan securitizations (ODART 2018-1, OMFIT 2019-1, OMFIT 2015-3, OMFIT 2018-1, and OMFIT 2016-3).
OMFC’s Unsecured Corporate Revolver At December 31, 2023, the borrowing capacity of our corporate revolver was $1.3 billion, and no amounts were drawn. 50 Table of Contents Securitizations and Borrowings from Revolving Conduit Facilities During the year ended December 31, 2023, we completed three personal loan securitizations (ODART 2023-1, OMFIT 2023-1, OMFIT 2023-2, see “Securitized Borrowings” below) and redeemed one personal loan securitization (OMFIT 2020-1).
We use historical cash flow performance by TDR segments to estimate expected cash flows from our current portfolio of TDR finance receivables. Recent Accounting Pronouncements See Note 3 of the Notes to the Consolidated Financial Statements included in this report for discussion of recently issued accounting pronouncements.
Recent Accounting Pronouncements See Note 3 of the Notes to the Consolidated Financial Statements in Part II - Item 8 in this report for discussion of recently issued accounting pronouncements.
Provision for finance receivable losses increased $809 million or 136% in 2022 when compared to 2021 primarily driven by higher net charge-offs and an increase in the allowance for finance receivable losses due to the weakened macroeconomic environment and growth in the portfolio.
Interest expense increased $127 million or 14% in 2023 when compared to 2022 due to a higher average cost of funds and an increase in average debt as we continue to grow the business. Provision for finance receivable losses increased $319 million or 23% in 2023 when compared to 2022 driven by higher net charge-offs.
Provision for finance receivable losses increased $812 million or 138% in 2022 when compared to 2021 primarily driven by higher net charge-offs and an increase in the allowance for finance receivable losses due to the weakened macroeconomic environment and growth in the portfolio.
Interest expense increased $129 million or 15% in 2023 when compared to 2022 due to a higher average cost of funds and an increase in average debt as we continue to grow the business. Provision for finance receivable losses increased $322 million or 23% in 2023 when compared to 2022 driven by higher net charge-offs.
Other expenses increased $57 million or 4% in 2022 when compared to 2021 primarily due to an increase in salaries and benefits expense and an increase in software and technology expense driven by the continued investment in our business.
Other expenses increased $94 million or 6% in 2023 when compared to 2022 due to an increase in general operating expenses and salaries and benefits expense driven by our strategic investments in the business, as well as an increase in insurance policy benefits and claims expense largely driven by favorable claims experience in the prior period not present in the current period.
OUTLOOK We are actively monitoring the current macroeconomic developments, including geopolitical actions outside of the U.S., and remain prepared for any opportunities or challenges that may impact our business. Our financial condition and results of operations could be affected by macroeconomic conditions, including changes in unemployment, inflation, interest rates, and consumer confidence.
In agreeing to these two consent orders, we did not admit to any of the NYDFS’ or the CFPB’s factual findings or legal conclusions. 41 Table of Contents OUTLOOK We are actively monitoring the current macroeconomic environment, including geopolitical actions outside of the U.S., and remain prepared for any developments that may impact our business.
Our operating subsidiaries’ primary cash needs relate to funding our lending activities, our debt service obligations, our operating expenses, payment of insurance claims, and expenditures relating to upgrading and monitoring our technology platform, risk systems, and branch locations.
As a holding company, all of the funds generated from our operations are earned by our operating subsidiaries. Our operating subsidiaries’ primary cash needs relate to funding our lending activities, our debt service obligations, our operating expenses, payment of insurance claims, and supporting strategic initiatives.
The effective tax rate for 2022 and 2021 differed from the federal statutory rate of 21% primarily due to the effect of state income taxes. See Note 13 of the Notes to the Consolidated Financial Statements included in this report for further information on effective tax rates.
Income taxes decreased $84 million or 30% in 2023 when compared to 2022 due to lower pretax income. See Note 13 of the Notes to the Consolidated Financial Statements in Part II - Item 8 in this report for further information on income taxes.
Other revenues increased $98 million or 18% in 2022 when compared to 2021 primarily due to an increase in gains on the sales of finance receivables and an increase in servicing revenue associated with the whole loan sale program as a result of more loans sold in the current period and lower net losses on the repurchases and repayments of debt in the current period compared to the prior year period.
Other revenues increased $106 million or 17% in 2023 when compared to 2022 due to an increase in investment revenue due to higher market rates compared to the prior year period and a net loss on the repurchase and repayment of debt in the prior year period.
Seasonality Our personal loan volume is generally highest during the second and fourth quarters of the year, primarily due to marketing efforts and seasonality of demand. Demand for our personal loans is usually lower in January and February after the holiday season and as a result of tax refunds.
Seasonality Our personal loan volume and demand is generally lowest during the first part of the year following the holiday season and as a result of tax refunds, and increases through the end of the year. Delinquencies follow the same trends, being generally lower during the first part of the year and rising throughout the remainder of the year.
See Notes 8 and 9 of the Notes to the Consolidated Financial Statements included in this report for further information on our long-term debt, securitization transactions, private secured term funding, and our revolving conduit facilities.
See Notes 3, 4, and 5 of the Notes to the Consolidated Financial Statements in Part II - Item 8 in this report for additional information on the adoption of ASU 2022-02.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeIn aggregate, the estimated impact of an immediate and sustained 100 basis points (“bps”) increase or decrease in interest rates on the fair values of our interest rate-sensitive financial instruments would not be material to our financial position. We derived the changes in fair values by modeling estimated cash flows of certain assets and liabilities.
Biggest changeThe estimated impact of an immediate and sustained 100 basis point (“bps”) increase or decrease in interest rates on the fair values of our interest rate-sensitive financial instruments is shown below.
It also assumes an immediate change in interest rates, without regard to the impact of certain business decisions or initiatives that we would likely undertake to mitigate or eliminate some or all of the adverse effects of the modeled scenarios. 59 Table of Contents
It also assumes an immediate change in interest rates, without regard to the impact of certain business decisions or initiatives that we would likely undertake to mitigate or eliminate some or all of the adverse effects of the modeled scenarios. 58 Table of Contents
The estimated increases (decreases) in fair values of interest rate-sensitive financial instruments were as follows: December 31, 2022 2021 (dollars in millions) +100 bps -100 bps +100 bps -100 bps Assets Net finance receivables, less allowance for finance receivable losses (a) $ (212) $ 217 $ (217) $ 222 Fixed-maturity investment securities (b) (70) 75 (84) 89 Liabilities Long-term debt (b) $ (461) $ 484 $ (645) $ 670 (a) We did not adjust the estimated cash flows for any future loan originations.
The estimated increases (decreases) in fair values of interest rate-sensitive financial instruments were as follows: December 31, 2023 2022 (dollars in millions) +100 bps -100 bps +100 bps -100 bps Assets Net finance receivables, less allowance for finance receivable losses (a) $ (277) $ 285 $ (212) $ 217 Fixed-maturity investment securities (b) (64) 67 (70) 75 Liabilities Long-term debt (b) $ (518) $ 529 $ (461) $ 484 (a) We did not adjust the estimated cash flows for any future credit originations.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk. The fair values of certain assets and liabilities are sensitive to changes in market interest rates. The impact of changes in interest rates would be reduced by the fact that increases (decreases) in fair values of assets would be partially offset by corresponding changes in fair values of liabilities.
The impact of changes in interest rates would be reduced by the fact that increases (decreases) in fair values of assets would be partially offset by corresponding changes in fair values of liabilities.
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Item 7A. Quantitative and Qualitative Disclosures About Market Risk. Market risk refers to the risk to the Company’s financial position resulting from a change in market factors, including interest rates, foreign exchange rates, equity, and commodity prices. The fair values of certain assets and liabilities are sensitive to changes in market interest rates.
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This change would not materially impact our operations due to the composition of our balance sheet, including largely fixed-rate loans along with the tenor and fixed-rate nature of our debt. Our long liquidity runway and staggered debt maturities further reduce any immediate impacts of changes in market interest rates.
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For further discussion on the impact of market factors, see “Risk Factors” in Part I - Item 1A. of this report. We derived the changes in fair values by modeling estimated cash flows of certain assets and liabilities.

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