What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-07 compared with 2024-02-13 · 322 added, 293 removed, 1750 unchanged (26% of the section changed)

20 unchanged sentences

Recent Accounting Pronouncements

F oursi g ht Acquisition

Finance Receivables

32 unchanged sentences

We believe that our audits provide a reasonable basis for our opinions.

As described in Management’s Report on Internal Control over Financial Reporting, management has excluded Foursight Capital LLC from its assessment of internal control over financial reporting as of December 31, 2024 because it was acquired by the Company in a purchase business combination during 2024.

We have also excluded Foursight Capital LLC from our audit of internal control over financial reporting.

Foursight Capital LLC is a wholly-owned subsidiary whose total assets and total revenues excluded from management’s assessment and our audit of internal control over financial reporting represent 4% and 2%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2024.

Definition and Limitations of Internal Control over Financial Reporting

8 unchanged sentences

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Allowance for Finance Receivable Losses for Personal Loans – Forecasted Macroeconomic Conditions

As described in Notes 2 and 5 to the consolidated financial statements, the Company’s allowance for finance receivable losses for personal loans was $2,415 million as of December 31, 2023.

Management estimates the allowance for finance receivable losses for personal loans primarily on historical loss experience using a cumulative loss model applied to the Company’s personal loan portfolios.

Allowance for Finance Receivable Losses for Consumer Loans – Forecasted Macroeconomic Conditions

As described in Notes 2 and 6 to the consolidated financial statements, the Company’s allowance for finance receivable losses for consumer loans was $2,567 million as of December 31, 2024.

Management estimates the allowance for finance receivable losses for consumer loans primarily on historical loss experience using a cumulative loss model applied to the Company’s consumer loan portfolios.

Management also considers forecasted macroeconomic conditions within the Company’s reasonable and supportable forecast period, which includes the forecasted unemployment rate.

The principal considerations for our determination that performing procedures relating to the allowance for finance receivable losses for personal loans – forecasted macroeconomic conditions is a critical audit matter are (i) the significant judgment by management in determining adjustments to the results of the cumulative loss model to reflect forecasted macroeconomic conditions, which led to a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating audit evidence relating to management’s determination of the impact of forecasted macroeconomic conditions, and (ii) the audit effort involved the use of professionals with specialized skill and knowledge.

The principal considerations for our determination that performing procedures relating to the allowance for finance receivable losses for consumer loans – forecasted macroeconomic conditions is a critical audit matter are (i) the significant judgment by management in determining adjustments to the results of the cumulative loss model to reflect forecasted macroeconomic conditions, which led to a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating audit evidence relating to management’s determination of the impact of forecasted macroeconomic conditions, and (ii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to the allowance for finance receivable losses for personal loans, including controls over management’s determination of the impact of forecasted macroeconomic conditions.

These procedures also included, among others, the involvement of professionals with specialized skill and knowledge to assist in testing management's process for determining forecasted macroeconomic conditions and applying those forecasts to the results of the cumulative loss model, which included (i) evaluating the appropriateness of the methodology, (ii) testing the data used in the estimate and (iii) evaluating the reasonableness of management’s determination of the impact of forecasted macroeconomic conditions on the allowance for finance receivable losses for personal loans.

These procedures included testing the effectiveness of controls relating to the allowance for finance receivable losses for consumer loans, including controls over management’s determination of the impact of forecasted macroeconomic conditions.

These procedures also included, among others, the involvement of professionals with specialized skill and knowledge to assist in testing management’s process for determining forecasted macroeconomic conditions and applying those forecasts to the results of the cumulative loss model, which included (i) evaluating the appropriateness of the methodology, (ii) testing the data used in the estimate and (iii) evaluating the reasonableness of management’s determination of the impact of forecasted macroeconomic conditions on the allowance for finance receivable losses for consumer loans.

/s/ PricewaterhouseCoopers LLP

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Allowance for Finance Receivable Losses for Personal Loans – Forecasted Macroeconomic Conditions

As described in Notes 2 and 5 to the consolidated financial statements, the Company’s allowance for finance receivable losses for personal loans was $2,415 million as of December 31, 2023.

Allowance for Finance Receivable Losses for Consumer Loans – Forecasted Macroeconomic Conditions

As described in Notes 2 and 6 to the consolidated financial statements, the Company’s allowance for finance receivable losses for consumer loans was $2,567 million as of December 31, 2024.

Management also considers forecasted macroeconomic conditions within the Company’s reasonable and supportable forecast period, which includes the forecasted unemployment rate.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

/s/ PricewaterhouseCoopers LLP

88 unchanged sentences

Net change in unrealized gains (losses) on non-credit impaired available-for-sale securities

( 2 ) ( 11 ) 50

Retirement plan liability adjustments ( 1 ) — 3

3 unchanged sentences

Other comprehensive income (loss), net of tax, before reclassification adjustments

40 ( 131 ) ( 12 )

Reclassification adjustments included in net income, net of tax:

Net realized losses on available-for-sale securities, net of tax — ( 1 ) ( 1 )

Net realized (gains) losses on available-for-sale securities, net of tax

Reclassification adjustments included in net income, net of tax 2 — ( 1 )

Other comprehensive income (loss), net of tax

40 ( 132 ) ( 13 )

Comprehensive income $ 515 $ 681 $ 740

12 unchanged sentences

Balance, January 1, 2024 $ 1 $ 1,715 $ ( 87 ) $ 2,285 $ ( 728 ) $ 3,186

Net impact of adoption of ASU 2022-02 (see Note 3)

— — — 12 — 12

Balance, January 1, 2023 (post-adoption) 1 1,689 ( 127 ) 2,131 ( 667 ) 3,027

Common stock repurchased — — — — ( 35 ) ( 35 )

5 unchanged sentences

Other comprehensive income

— — 40 — — 40

Cash dividends*

Cash dividends (a)

— — — ( 498 ) — ( 498 )

2 unchanged sentences

Balance, January 1, 2023 $ 1 $ 1,689 $ ( 127 ) $ 2,119 $ ( 667 ) $ 3,015

Net impact of adoption of ASU 2022-02 (b)

— — — 12 — 12

Balance, January 1, 2023 (post-adoption) 1 1,689 ( 127 ) 2,131 ( 667 ) 3,027

Common stock repurchased

5 unchanged sentences

— ( 10 ) — — — ( 10 )

Other comprehensive loss — — ( 132 ) — — ( 132 )

Cash dividends*

Other comprehensive income

— — 40 — — 40

Cash dividends (a)

— — — ( 486 ) — ( 486 )

Net income — — — 641 — 641

1 unchanged sentence

Balance, January 1, 2022 $ 1 $ 1,672 $ 5 $ 1,727 $ ( 368 ) $ 3,037

$ 1 $ 1,655 $ 94 $ 1,691 $ — $ 3,441

Net impact of adoption of ASU 2018-12 (see Note 3)

— — ( 76 ) — — ( 76 )

Balance, January 1, 2021 (post-adoption)

1 1,655 18 1,691 — 3,365

Common stock repurchased

— — — — ( 303 ) ( 303 )

Treasury stock issued

— — — ( 2 ) 4 2

Share-based compensation expense, net of forfeitures

4 unchanged sentences

— — ( 132 ) — — ( 132 )

Cash dividends*

Cash dividends (a)

— — — ( 478 ) — ( 478 )

1 unchanged sentence

Balance, December 31, 2022 $ 1 $ 1,689 $ ( 127 ) $ 2,119 $ ( 667 ) $ 3,015

* Cash dividends declared were $ 4.00 per share, $ 3.80 per share, and $ 9.55 per share in 2023, 2022, and 2021, respectively.

(a) Cash dividends declared were $ 4.12 per share, $ 4.00 per share, and $ 3.80 per share in 2024, 2023, and 2022 respectively.

(b) As a result of the adoption of ASU 2022-02, we recorded a one-time cumulative increase to retained earnings, net of tax.

See Notes to the Consolidated Financial Statements.

9 unchanged sentences

Depreciation and amortization 277 257 262

Deferred income tax charge (benefit)

Deferred income tax benefit

( 42 ) ( 36 ) ( 64 )

8 unchanged sentences

Proceeds from sales of finance receivables 574 641 790

Foursight Acquisition, net of cash acquired

Available-for-sale securities purchased ( 272 ) ( 179 ) ( 530 )

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Net cash provided by (used for) financing activities

161 932 ( 326 )

Net change in cash and cash equivalents and restricted cash and restricted cash equivalents ( 406 ) 589 ( 58 )

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(dollars in millions)

Years Ended December 31, 2024 2023 2022

Net income $ 509 $ 641 $ 872

8 unchanged sentences

Net change in unrealized gains (losses) on non-credit impaired available-for-sale securities

( 2 ) ( 11 ) 50

Retirement plan liability adjustments ( 1 ) — 3

3 unchanged sentences

Other comprehensive income (loss), net of tax, before reclassification adjustments

40 ( 131 ) ( 12 )

Reclassification adjustments included in net income, net of tax:

Net realized losses on available-for-sale securities, net of tax — ( 1 ) ( 1 )

Net realized (gains) losses on available-for-sale securities, net of tax

Reclassification adjustments included in net income, net of tax 2 — ( 1 )

Other comprehensive income (loss), net of tax

40 ( 132 ) ( 13 )

Comprehensive income $ 515 $ 681 $ 740

10 unchanged sentences

Balance, January 1, 2024 $ 5 $ 1,959 $ ( 87 ) $ 1,303 $ 3,180

Net impact of adoption of ASU 2022-02 (see Note 3)

Balance, January 1, 2023 (post-adoption) 5 1,933 ( 127 ) 1,205 3,016

Share-based compensation expense, net of forfeitures — 30 — — 30

5 unchanged sentences

Balance, January 1, 2023 $ 5 $ 1,933 $ ( 127 ) $ 1,193 $ 3,004

Net impact of adoption of ASU 2022-02 *

Balance, January 1, 2023 (post-adoption) 5 1,933 ( 127 ) 1,205 3,016

Share-based compensation expense, net of forfeitures — 36 — — 36

Withholding tax on shared-based compensation — ( 10 ) — — ( 10 )

Other comprehensive loss — — ( 132 ) — ( 132 )

Other comprehensive income

Cash dividends — — — ( 543 ) ( 543 )

2 unchanged sentences

Balance, January 1, 2022 $ 5 $ 1,916 $ 5 $ 1,078 $ 3,004

Net impact of adoption of ASU 2018-12 (see Note 3)

— — ( 76 ) — ( 76 )

Balance, January 1, 2021 (post-adoption)

5 1,899 18 1,442 3,364

Share-based compensation expense, net of forfeitures — 31 — — 31

5 unchanged sentences

Balance, December 31, 2022 $ 5 $ 1,933 $ ( 127 ) $ 1,193 $ 3,004

* As a result of the adoption of ASU 2022-02, we recorded a one-time cumulative increase to retained earnings, net of tax.

See Notes to the Consolidated Financial Statements.

8 unchanged sentences

Depreciation and amortization 277 257 262

Deferred income tax charge (benefit)

Deferred income tax benefit

( 42 ) ( 36 ) ( 64 )

8 unchanged sentences

Proceeds from sales of finance receivables 574 641 790

Foursight Acquisition, net of cash acquired

Available-for-sale securities purchased ( 272 ) ( 179 ) ( 530 )

10 unchanged sentences

Net cash provided by (used for) financing activities

130 937 ( 304 )

Net change in cash and cash equivalents and restricted cash and restricted cash equivalents ( 437 ) 594 ( 35 )

44 unchanged sentences

We classify finance receivables as held for investment due to our ability and intent to hold them until their contractual maturities.

Our finance receivables held for investment consist of our personal loans and credit cards.

Our finance receivables held for investment consist of our consumer loans and credit cards.

Consumer loans include personal loans and auto finance.

We carry finance receivables at amortized cost which includes accrued finance charges, net unamortized deferred origination costs and unamortized fees, unamortized net premiums and discounts on purchased finance receivables, and unamortized finance charges on precomputed receivables.

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For credit cards, we amortize certain deferred costs on a straight-line basis over a twelve-month period.

For our personal loans, we stop accruing finance charges when four payments (approximately 90 days) become contractually past due.

For our consumer loans, we stop accruing finance charges when four payments (approximately 90 days) become contractually past due.

We reverse finance charge amounts previously accrue d upon suspension of accrual of finance charges.

2 unchanged sentences

We do not reverse accretion of premium or discount that was previously recognized.

For our personal loans, we recognize the contractual interest portion of payments received on nonaccrual finance receivables as finance charges at the time of receipt.

We resume the accrual of interest on nonaccrual personal loans when the past due status on the individual finance receivable improves to the point that the finance receivable no longer meets our policy for nonaccrual.

For our consumer loans, we recognize the contractual interest portion of payments received on nonaccrual finance receivables as finance charges at the time of receipt.

We resume the accrual of interest on nonaccrual consumer loans when the past due status on the individual finance receivable improves to the point that the finance receivable no longer meets our policy for nonaccrual.

At that time, we also resume accretion of any unamortized premium or discount resulting from a previous purchase premium or discount.

13 unchanged sentences

Our finance receivables consist of a large number of relatively small, homogeneous accounts.

We estimate the allowance for finance receivable losses primarily on historical loss experience using a cumulative loss model applied to our personal loan portfolios.

We estimate the allowance for finance receivable losses primarily on historical loss experience using a cumulative loss model applied to our consumer loans.

Our gross credit loss expectation is offset by the estimate of future recoveries using historical recovery curves.

Our personal loans are primarily segmented in the loss model by contractual delinquency status.

Our consumer loans are primarily segmented in the loss model by contractual delinquency status.

Other attributes in the model include loan modification status, collateral mix, and recent credit score.

To estimate the gross credit losses, the model utilizes a roll rate matrix to project the first 12 months of losses and historical cohort performance to project the expected losses over the remaining term.

To estimate the gross credit losses for consumer loans, the model utilizes a roll rate matrix to project the first 12 months of losses and historical cohort performance to project the expected losses over the remaining term.

Our methodology relies on historical loss experience to forecast the corresponding future outcomes.

3 unchanged sentences

No new volume is assumed.

Personal loan renewals are a significant piece of our new volume and are considered a terminal event of the previous loan.

For our personal loans, we have elected not to measure an allowance on accrued finance charges as it is our policy to reverse finance charge amounts previously accrued after four contractual payments become past due.

Loan renewals are a significant piece of our new volume and are considered a terminal event of the previous loan.

For our consumer loans, we have elected not to measure an allowance on accrued finance charges as it is our policy to reverse finance charge amounts previously accrued after four contractual payments become past due.

For credit cards, we measure an allowance on uncollected finance charges, but do not measure an allowance on the unfunded portion of the credit card lines as the accounts are unconditionally cancellable.

1 unchanged sentence

Our judgment is based on quantitative analyses, qualitative factors, such as recent portfolio, industry, and other economic trends, and experience in the consumer finance industry.

We adjust the amounts determined by our model for management’s estimate of the effects of model imprecision which include but are not limited to, any changes to underwriting criteria and portfolio seasoning.

We generally charge-off to the allowance for finance receivable losses on personal loans and credit cards that are beyond seven payments (approximately 180 days) contractually past due.

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.

We generally charge-off to the allowance for finance receivable losses on consumer loans and credit cards that are beyond seven payments (approximately 180 days) contractually past due.

Exceptions include accounts in bankruptcy, which are generally charged off at the earlier of notice of discharge or when the customer becomes seven payments contractually past due, and accounts of deceased borrowers, which are generally charged off at the time of notice.

Generally, we start repossession of any titled personal property when the customer becomes two payments (approximately 30 days) contractually past due and may charge-off prior to the account becoming seven payments (approximately 180 days) contractually past due.

We may renew delinquent secured or unsecured personal loan accounts if the customer meets current underwriting criteria and it does not appear that the cause of past delinquency will affect the customer’s ability to repay the renewed loan.

We may renew delinquent secured or unsecured loan accounts if the customer meets current underwriting criteria and it does not appear that the cause of past delinquency will affect the customer’s ability to repay the renewed loan.

We subject all renewals to the same credit risk underwriting process as we would a new application for credit.

6 unchanged sentences

At the time we initially recognize intangible assets, a determination is made with regard to each asset’s useful life.

We have determined that each of our remaining intangible assets have indefinite lives with the exception of value of business acquired (“VOBA”), which has a finite useful life.

We amortize our finite useful life intangible assets in a manner that reflects the pattern of economic benefit used.

68 unchanged sentences

• we do not expect to recover the security’s entire amortized cost basis (even if we do not intend to sell the security).

If we intend to sell an impaired investment security or we will likely be required to sell the security before recovery of its amortized cost basis less any current period credit loss, we recognize the impairment as a direct write-down in Other revenues - investment in our consolidated statements of operation equal to the difference between the investment security’s amortized cost and its fair value at the balance sheet date.

If we intend to sell an impaired investment security or we will likely be required to sell the security before recovery of its amortized cost basis less any current period credit loss, we recognize the impairment as a direct write-down in Other revenues - investment in our consolidated statements of operations equal to the difference between the investment security’s amortized cost and its fair value at the balance sheet date.

Once the impairment is recorded, we adjust the investment security to a new amortized cost basis equal to the previous amortized cost basis less the impairment write-down recognized in the current period.

2 unchanged sentences

The cash flows expected to be collected are determined by assessing all available information, including issuer default rate, ratings changes and adverse conditions related to the industry sector, financial condition of issuer, credit enhancements, collateral default rates, and other relevant criteria.

Management considers factors such as our investment strategy, liquidity requirements, overall business plans, and recovery periods for securities in previous periods of broad market declines.

Management considers

factors such as our investment strategy, liquidity requirements, overall business plans, and recovery periods for securities in previous periods of broad market declines.

If a credit loss exists with respect to an investment in a security (i.e., we do not expect to recover the entire amortized cost basis of the security), we would be unable to assert that we will recover our amortized cost basis even if we do not intend to sell the security.

24 unchanged sentences

In applying the qualitative assessment to identify the primary beneficiary of a VIE, we are determined to have a controlling financial interest if we have (i) the power to direct the activities that most significantly impact the economic performance of the VIE, and (ii) the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE.

We consider the VIE’s purpose and design, including the risks that the entity was designed to create and pass through to its variable interest holders.

We continually reassess the VIE’s primary beneficiary and whether we have acquired or divested the power to direct the activities of the VIE through changes in governing documents or other circumstances.

We consider the VIEs’ purpose and design, including the risks that the entity was designed to create and pass through to its variable interest holders.

We continually reassess the VIEs’ primary beneficiary and whether we have acquired or divested the power to direct the activities of the VIE through changes in governing documents or other circumstances.

Cash and Cash Equivalents

2 unchanged sentences

We evaluate the creditworthiness of these financial institutions in determining the risk associated with these cash balances.

We do not believe that the Company is exposed to any significant credit risk on these accounts and have not experienced any losses in such accounts.

do not believe that the Company is exposed to any significant credit risk on these accounts and have not experienced any losses in such accounts.

Restricted Cash and Cash Equivalents

1 unchanged sentence

Long-term Debt

We generally report our long-term debt issuances at the face value of the debt instrument, which we adjust for any unaccreted discount, unamortized premium, or unamortized debt issuance costs associated with the debt.

Other than securitized products, we generally accrete discounts, premiums, and debt issuance costs over the contractual life of the security using contractual payment terms.

With respect to securitized products, we have elected to amortize deferred costs over the contractual life of the security.

Accretion of discounts and premiums are recorded to Interest expense in our consolidated statements of operations.

We generally report our long-term debt at the face value of the debt instrument, which we adjust for any unaccreted discount, unamortized premium, or unaccreted debt issuance costs.

For our securitizations, we have elected to amortize and accrete these items over the life of the debt instrument based on the projected cash flows.

For all other debt instruments, we generally amortize and accrete these items over the contractual life of the debt instrument based on the contractual terms.

Amortization and accretion of these items are recorded to Interest expense in our consolidated statements of operations.

We recognize income taxes using the asset and liability method.

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Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

Our fair value processes include controls that are designed to ensure that fair values are appropriate.

Such controls include model validation, review of key model inputs, analysis of period-over-period fluctuations, and reviews by senior management.

Earnings Per Share (OMH Only)

4 unchanged sentences

ACCOUNTING PRONOUNCEMENTS RECENTLY ADOPTED

In August of 2018, the FASB issued ASU 2018-12, Financial Services - Insurance:

Targeted Improvements to the Accounting for Long-Duration Contracts , which provides targeted improvements to Topic 944 for the assumptions used to measure the liability for future policy benefits for nonparticipating traditional and limited-payment contracts;

measurement of market risk benefits;

amortization of deferred acquisition costs;

and enhanced disclosures.

The ASU requires the assumptions used to measure the liability for future policy benefits to be updated at least annually.

The guidance prescribes the discount rate used to measure the liability to be an upper-medium grade fixed-income instrument yield and updated at each reporting date with changes in the liability due to the discount rate recognized in Accumulated other comprehensive income.

The amendments in this ASU became effective for the Company beginning January 1, 2023 and we adopted using the modified retrospective transition method.

This ASU required a transition date of January 1, 2021 and resulted in recasting prior periods.

The effects of the adoption of ASU 2018-12 to our consolidated balance sheets were as follows:

(dollars in millions) As Reported ASU 2018-12 Adjustment As Recast

December 31, 2022

Other assets (OMH only) $ 1,150 $ 4 $ 1,154

Other assets (OMFC only) 1,148 4 1,152

Insurance claims and policyholder liabilities 602 18 620

Accumulated other comprehensive loss ( 119 ) ( 8 ) ( 127 )

Retained earnings (OMH only) 2,125 ( 6 ) 2,119

Retained earnings (OMFC only) 1,199 ( 6 ) 1,193

December 31, 2021

Other assets (OMH only) $ 1,003 $ 16 $ 1,019

Other assets (OMFC only) 1,001 16 1,017

Insurance claims and policyholder liabilities 621 72 693

Accumulated other comprehensive income 61 ( 56 ) 5

January 1, 2021

Other assets (OMH and OMFC) $ 1,054 $ 21 $ 1,075

Insurance claims and policyholder liabilities 621 97 718

Accumulated other comprehensive income 94 ( 76 ) 18

The effects of the adoption of ASU 2018-12 to our consolidated statements of operations were as follows:

(dollars in millions, except per share amounts) As Reported ASU 2018-12 Adjustment As Recast

Year Ended December 31, 2022

Insurance policy benefits and claims $ 150 $ 8 $ 158

Income before income taxes 1,163 ( 8 ) 1,155

Income taxes 285 ( 2 ) 283

Net income 878 ( 6 ) 872

Basic EPS (OMH only) 7.07 ( 0.05 ) 7.02

Diluted EPS (OMH only) 7.06 ( 0.05 ) 7.01

Year Ended December 31, 2021

Basic EPS (OMH only) $ 9.90 $ 0.01 $ 9.91

Diluted EPS (OMH only) 9.87 0.01 9.88

The effects of the adoption of ASU 2018-12 to our consolidated statements of comprehensive income were as follows:

(dollars in millions) As Reported ASU 2018-12 Adjustment As Recast

Year Ended December 31, 2022

Comprehensive income $ 698 $ 42 $ 740

Year Ended December 31, 2021

Comprehensive income $ 1,281 $ 20 $ 1,301

The effects of the adoption of ASU 2018-12 to our consolidated statements of cash flows were as follows:

(dollars in millions) As Reported ASU 2018-12 Adjustment As Recast

Year Ended December 31, 2022

Net income $ 878 $ ( 6 ) $ 872

Deferred income tax charge ( 62 ) ( 2 ) ( 64 )

Cash flows due to changes in other assets and other liabilities (OMH only)

( 90 ) 8 ( 82 )

Cash flows due to changes in other assets and other liabilities (OMFC only) ( 89 ) 8 ( 81 )

As a result of the adoption of ASU 2018-12, our significant accounting policy related to long-duration insurance contracts for policy and claim reserves has changed to reflect the requirements of the new standard.

See Note 2 for the updated significant accounting policy as of the transition date of January 1, 2021.

Financial Instruments

In March of 2022, the FASB issued ASU 2022-02, Financial Instruments - Credit Losses:

Troubled Debt Restructurings and Vintage Disclosures , which eliminates the accounting for troubled debt restructurings by creditors while enhancing the disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty.

The amendment also requires disclosure of gross charge-offs by year of origination for finance receivables.

We adopted the amendments in this ASU as of January 1, 2023 using the modified retrospective transition method.

Upon adoption, we recorded a decrease to the allowance for finance receivable losses of $ 16 million, a decrease to deferred tax assets of $ 4 million and a one-time corresponding cumulative increase to Retained earnings, net of tax, of $ 12 million in our consolidated balance sheets as of January 1, 2023.

As a result of the adoption of ASU 2022-02, several of our significant accounting policies have changed to reflect the requirements of the new standard.

See Note 2 for the updated significant accounting policies as of January 1, 2023.

Troubled Debt Restructured Finance Receivables

ASU 2022-02 superseded the accounting for troubled debt restructurings by creditors.

As a result of the adoption of this ASU, the accounting for TDR finance receivables is no longer applicable for periods beginning on or after January 1, 2023.

ACCOUNTING PRONOUNCEMENTS TO BE ADOPTED

Segment Reporting

1 unchanged sentence

Improvements to Reportable Segment Disclosures , which requires annual and interim disclosure of significant segment expenses and other segment items.

The amendments in this ASU will become effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The amendments should be applied on a retrospective basis to all prior periods presented in the financial statements.

We are currently evaluating the impact of the standard on our segment disclosures.

The amendments in this ASU became effective for the Company beginning with this Annual Report on Form 10-K for the year ended December 31, 2024, and we have adopted using the retrospective transition method.

See Note 18 for additional information on the adoption of ASU 2023-07.

ACCOUNTING PRONOUNCEMENTS TO BE ADOPTED

In December of 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

2 unchanged sentences

The amendments should be applied on a prospective basis, with retrospective application allowed.

We are currently evaluating the impact of the standard on our income tax disclosures.

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

We are currently evaluating the impact of the standard to our income tax disclosures.

Expense Disaggregation Disclosures

In December of 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), which requires disclosure of certain costs and expenses in the notes to the financial statements.

The amendments in this ASU will become effective for fiscal years beginning after December 15, 2026, and will be effective for interim periods with fiscal years beginning after December 15, 2027, with early adoption permitted.

The amendments should be applied on a prospective basis, with retrospective application allowed.

We are currently evaluating the impact of the standard to our financial statement disclosures.

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

Foursight Acquisition

On April 1, 2024, we completed the acquisition of all of the outstanding common stock of Foursight Capital LLC (“Foursight”) from Jefferies Financial Group, Inc.

for $ 125 million in cash (“Foursight Acquisition”).

Foursight is an automobile finance company that purchases and services automobile retail installment contracts primarily made to near-prime borrowers across the country.

Contracts are sourced through an extensive network of dealers.

The acquisition supports our expansion into the auto lending business.

The acquisition has been accounted for as a business combination using the acquisition method of accounting.

The purchase consideration was allocated to the assets acquired and liabilities assumed based on their respective estimated fair values as of April 1, 2024, with the excess recorded to goodwill as shown below.

(dollars in millions) Amount

Cash consideration $ 125

Fair value of assets acquired:

Cash and cash equivalents 10

Net finance receivables 867

Allowance for finance receivable losses ( 31 )

Restricted cash and restricted cash equivalents 50

Other intangibles 32

Other assets 21

Fair value of liabilities assumed:

Long-term debt 848

Other liabilities 13

Goodwill $ 37

The goodwill of $ 37 million recognized from the Foursight Acquisition reflects the strategic benefits and opportunities of the combined company and is reported in our C&I segment.

Tax deductible goodwill is $ 52 million, reflecting differences in the allocation of purchase price for tax purposes.

See Note 8 for a reconciliation of the carrying amount of goodwill at the beginning of 2024 and December 31, 2024.

Assets acquired include auto finance receivables with a fair value of $ 829 million on gross receivables of $ 908 million.

Of this amount, we determined $ 226 million of gross receivables have experienced more-than-insignificant credit deterioration since origination (“purchased credit deteriorated” or “PCD” loans) and recorded an allowance for finance receivable losses for PCD loans of $ 31 million at the acquisition date.

The remaining loans were deemed to be non-PCD loans, and an additional $ 61 million was recorded in our Allowance for finance receivable losses and recognized through Provision for finance receivable losses in our consolidated statement of operations for the year ended December 31, 2024.

The results of operations of Foursight are included in our consolidated statement of operations subsequent to the acquisition date.

We have omitted the pro forma disclosures as we have determined that the acquisition did not have a significant impact to our consolidated financial statements.

Finance Receivables

Our finance receivables consist of personal loans and credit cards.

Our finance receivables consist of consumer loans and credit cards.

Consumer loans include personal loans and auto finance.

Personal loans are non-revolving, with a fixed rate, have fixed terms generally between three and six years , and are secured by automobiles, other titled collateral, or are unsecured.

Auto finance includes automobile retail installment contracts originated at the point of purchase through our dealership network.

Auto finance loans are non-revolving, with a fixed rate, have fixed terms generally between three and six years , and are secured by automobiles.

Credit cards are open-ended, revolving, with a fixed rate, and are unsecured.

Components of our net finance receivables were as follows:

(dollars in millions) Personal Loans Credit Cards Total

Consumer Loans

(dollars in millions) Personal Loans Auto Finance

Total Consumer Loans

Credit Cards Total

December 31, 2024

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Total $ 20,274 $ 745 $ 21,019 $ 330 $ 21,349

* Personal loan gross finance receivables equal the unpaid principal balance.

* Consumer loan gross finance receivables equal the unpaid principal balance.

For precompute personal loans, unpaid principal balance is the gross contractual payments less the unaccreted balance of unearned finance charges.

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Pennsylvania 1,269 6 1,277 6

North Carolina 1,072 5 1,110 6

Ohio 1,000 5 972 5

North Carolina 940 5 1,010 5

New York 913 4 856 4

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Total personal loans $ 20,833 100 % $ 20,274 100 %

Credit Cards:

Florida $ 159 8 % $ 81 11 %

Georgia 155 7 63 8

Texas 141 7 5 1

Illinois 132 6 43 6

California 124 6 80 11

North Carolina 108 5 62 8

Indiana 99 5 29 4

Missouri 99 5 32 4

Ohio 89 4 34 5

Kentucky 88 4 29 4

Other 884 43 287 38

Total auto finance $ 2,078 100 % $ 745 100 %

Credit Cards:

Texas $ 87 14 % $ 46 14 %

California 84 13 50 15

Florida 76 12 38 11

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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.

These unsecured personal loans are derecognized from our balance sheet at the time of sale.

We service the personal loans sold and are entitled to a servicing fee and other fees commensurate with the services performed as part of the agreements.

The gain on sales and servicing fees are recorded in Other revenues - other in our consolidated statements of operations.

We sold $ 585 million and $ 720 million of gross finance receivables during the years ended December 31, 2023 and 2022, respectively.

We have whole loan sale flow agreements with third parties, with current terms of less than one year , in which we agreed to sell a remaining total of $ 900 million gross receivables of newly originated unsecured personal loans along with any associated accrued interest.

Loans sold are derecognized from our balance sheet at the time of sale.

We service the loans sold and are entitled to a servicing fee and other fees commensurate with the services performed as part of the agreements.

The gain on sales and servicing fees are recorded in Other revenues in our consolidated statements of operations.

We sold a total of $ 542 million and $ 585 million of gross finance receivables during the years ended December 31, 2024 and 2023, respectively.

The gain on the sales were $ 23 million and $ 52 million during the years ended December 31, 2024 and 2023, respectively.

Subsequent to year-end, we entered into a whole loan sale flow agreement with a third party, with a term of less than two years , in which we agreed to sell $ 600 million of gross receivables of newly originated unsecured personal loans along with any associated accrued interest.

CREDIT QUALITY INDICATOR

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We monitor the delinquency of our finance receivable portfolio, including the migration between the delinquency buckets and changes in the delinquency trends to manage our exposure to credit risk in the portfolio.

When personal loans are 60 days contractually past due, we consider these accounts to be at an increased risk for loss and move collection of these accounts to our central collection operations.

We consider our personal loans to be nonperforming at 90 days or more contractually past due, at which point we stop accruing finance charges and reverse finance charges previously accrued.

For our personal loans, we reversed net accrued finance charges of $ 146 million and $ 126 million during the years ended December 31, 2023 and 2022, respectively.

Finance charges recognized from the contractual interest portion of payments received on nonaccrual personal loans totaled $ 18 million and $ 16 million during the years ended December 31, 2023, and 2022, respectively.

All personal loans in nonaccrual status are considered in our estimate of allowance for finance receivable losses.

When consumer loans are 60 days contractually 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.

We consider our consumer loans to be nonperforming at 90 days or more contractually past due, at which point we stop accruing finance charges and reverse finance charges previously accrued.

All consumer loans in nonaccrual status are considered in our estimate of allowance for finance receivable losses.

The following table below is a summary of finance charges and fees on our consumer loans:

Years Ended December 31,

(dollars in millions) Personal Loans Auto

Personal Loans Auto

Net accrued finance charges reversed

$ 160 $ 9 $ 144 $ 2

Finance charges recognized from the contractual interest portion of payments received on nonaccrual loans

We accrue finance charges and fees on credit cards until charge-off at 180 days contractually past due, at which point we reverse finance charges and fees previously accrued.

For credit cards, net accrued finance charges and fees reversed totaled $ 11 million during the year ended December 31, 2023, and were immaterial during the year ended December 31, 2022.

Net accrued finance charges and fees reversed on credit cards were as follows:

(dollars in millions, except per share amounts) 2024 2023

Net accrued finance charges and fees reversed

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

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Gross charge-offs *

$ 51 $ 655 $ 728 $ 376 $ 104 $ 70 $ 1,984

* Represents gross charge-offs for the year ended December 31, 2024.

(dollars in millions) 2023 2022 2021 2020 2019 Prior Total

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Total $ 10,071 $ 6,043 $ 2,744 $ 860 $ 423 $ 133 $ 20,274

The following is a summary of credit cards by number of days delinquent:

(dollars in millions)

Gross charge-offs *

$ 63 $ 734 $ 625 $ 183 $ 101 $ 40 $ 1,746

* Represents gross charge-offs for the year ended December 31, 2023.

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

(dollars in millions) 2024 2023 2022 2021 2020 Prior Total

December 31, 2024

Current $ 1,007 $ 538 $ 273 $ 101 $ 21 $ 12 $ 1,952

30-59 days past due 25 24 19 10 2 1 81

60-89 days past due 6 7 5 2 — — 20

Total performing 1,038 569 297 113 23 13 2,053

Nonperforming (Nonaccrual)

90+ days past due 6 9 7 2 — 1 25

Total $ 1,044 $ 578 $ 304 $ 115 $ 23 $ 14 $ 2,078

Gross charge-offs *

$ 8 $ 36 $ 34 $ 12 $ 2 $ 1 $ 93

* Represents gross charge-offs for the year ended December 31, 2024.

(dollars in millions) 2023 2022 2021 2020 2019 Prior Total

December 31, 2023

Current $ 480 $ 203 $ 34 $ 2 $ — $ — $ 719

30-59 days past due 4 6 2 — — — 12

60-89 days past due 2 3 — — — — 5

Total performing 486 212 36 2 — — 736

Nonperforming (Nonaccrual)

90+ days past due 3 5 1 — — — 9

Total $ 489 $ 217 $ 37 $ 2 $ — $ — $ 745

Gross charge-offs *

$ 2 $ 15 $ 5 $ — $ — $ — $ 22

* Represents gross charge-offs for the year ended December 31, 2023.

The following is a summary of credit cards by number of days delinquent:

(dollars in millions) December 31, 2024 December 31, 2023

30-59 days past due

60-89 days past due

90+ days past due

There were no credit cards that were converted to term loans at December 31, 2024 or December 31, 2023.

UNFUNDED LENDING COMMITMENTS

Our unfunded lending commitments consist of the unused credit card lines, which are unconditionally cancellable.

We do not anticipate that all of our customers will access their entire available line at any given point in time.

The unused credit card lines totaled $ 336 million and $ 223 million at December 31, 2024 and December 31, 2023, respectively.

MODIFIED FINANCE RECEIVABLES TO BORROWERS EXPERIENCING FINANCIAL DIFFICULTY

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The following tables below represent information regarding modified finance receivables to borrowers experiencing financial difficulty on or after January 1, 2023, the effective date of ASU 2022-02.

The period-end carrying value of finance receivables modified during the period were as follows:

(dollars in millions) Year Ended

December 31, 2023

The period-end carrying value of finance receivables modified during the period was as follows:

Years Ended December 31,

(dollars in millions) Personal Loans Auto

Personal Loans Auto

Interest rate reduction and term extension $ 319 $ 16 $ 451 $ 6

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Total modifications to borrowers experiencing financial difficulties $ 713 $ 17 $ 782 $ 6

Modifications as a percent of net finance receivables - personal loans 3.75 %

The financial effect of modifications made during the period were as follows:

(dollars in millions) Year Ended

December 31, 2023

Modifications as a percent of net finance receivables by class

3.42 % 0.81 % 3.86 % 0.86 %

The financial effect of modifications made during the period was as follows:

Years Ended December 31,

(dollars in millions) Personal Loans Auto

Personal Loans Auto

Net finance receivables

Weighted-average interest rate reduction 18.61 % 12.00 % 19.64 % 12.60 %

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Principal/interest forgiveness $ 46 $ 1 $ 44 $ —

The performance of modified finance receivables by delinquency status was as follows:

(dollars in millions) December 31, 2023

The performance of finance receivables modified within the previous 12 months by delinquency status was as follows:

December 31, 2024 (a) December 31, 2023 (b)

(dollars in millions) Personal Loans Auto

Personal Loans Auto

$ 518 $ 13 $ 571 $ 4

30-59 days past due

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90+ days past due

* Excludes $ 89 million of modified finance receivables that subsequently charged off.

The period-end carrying value of modified finance receivables for which there was a default during the period to cause the modified finance receivable to be considered nonperforming ( 90 days or more contractually past due) were as follows:

(dollars in millions) Year Ended

December 31, 2023

$ 713 $ 17 $ 782 $ 6

(a) Excludes $ 121 million of personal loan receivables that were modified and subsequently charged off within the previous 12 months.

Auto finance receivables that were modified and subsequently charged off within the previous 12 months were immaterial.

(b) Excludes $ 88 million of personal loan receivables that were modified and subsequently charged off.

Auto finance receivables that were modified and subsequently charged off were immaterial.

The period-end carrying value of finance receivables that defaulted during the period to cause the receivable to be considered nonperforming ( 90 days or more contractually past due) and had been modified within the 12 months preceding the default was as follows:

Years Ended December 31,

(dollars in millions) Personal

Personal Loans Auto

Interest rate reduction and term extension $ 64 $ 1 $ 55 $ 1

Interest rate reduction and principal forgiveness 26 — 20 —

See Notes 3 and 5 for additional information on the adoption of ASU 2022-02.

$ 90 $ 1 $ 75 $ 1

Modifications made to credit cards were immaterial for the years ended December 31, 2024 and 2023.

TROUBLED DEBT RESTRUCTURED FINANCE RECEIVABLES PRIOR TO ADOPTION OF ASU 2022-02

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Due to the adoption of this ASU, the following disclosures related to troubled debt restructuring finance receivables are no longer applicable for reporting periods beginning in 2023.

Information regarding TDR finance receivables were as follows:

(dollars in millions) December 31, 2022

TDR gross finance receivables $ 898

TDR net finance receivables * 904

Allowance for TDR finance receivable losses 369

* TDR net finance receivables are TDR gross finance receivables net of unearned fees, accrued finance charges, and deferred origination costs.

There were no credit cards classified as TDR finance receivables at December 31, 2022.

Information regarding the new volume of the TDR finance receivables were as follows:

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Rate reduction 465

Other * 273 143

Total post-modification TDR net finance receivables $ 738

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

UNFUNDED LENDING COMMITMENTS

Our unfunded lending commitments consist of the unused credit card lines, which are unconditionally cancellable.

We do not anticipate that all of our customers will access their entire available line at any given point in time.

The unused credit card lines totaled $ 223 million at December 31, 2023 and $ 81 million at December 31, 2022.

Allowance for Finance Receivable Losses

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We leverage projections from various industry leading providers.

We also consider inflationary pressures, consumer confidence levels, and interest rate increases that may continue to impact the economic outlook.

We also consider inflationary pressures, consumer confidence levels, and elevated interest rates that may continue to impact the economic outlook.

At December 31, 2024, our economic forecast used a reasonable and supportable period of 12 months.

The increase in our allowance for finance receivable losses for the year ended December 31, 2023 was primarily due to the weakened macroeconomic environment and growth in our loan portfolio.

The increase in our allowance for finance receivable losses for the year ended December 31, 2024 was driven by growth in net finance receivables, including the impact of the Foursight Acquisition.

We may experience further changes to the macroeconomic assumptions within our forecast, as well as changes to our loan loss performance outlook, both of which could lead to further changes in our allowance for finance receivable losses, allowance ratio, and provision for finance receivable losses.

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

(dollars in millions) Personal Loans Credit Cards Total

(dollars in millions) Consumer Loans

Credit Cards Total

Year Ended December 31, 2024

Balance at beginning of period $ 2,415 $ 65 $ 2,480

Impact of adoption of ASU 2022-02 * ( 16 ) — ( 16 )

Provision for finance receivable losses 1,891 149 2,040

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Balance at beginning of period $ 2,290 $ 21 $ 2,311

Impact of adoption of ASU 2022-02 (b)

( 16 ) — ( 16 )

Provision for finance receivable losses 1,651 70 1,721

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Balance at end of period $ 2,290 $ 21 $ 2,311

* As a result of the adoption of ASU 2022-02, we recorded a one-time adjustment to the allowance for finance receivable losses.

See Notes 3 and 4 for additional information on the adoption of ASU 2022-02.

(a) Represents allowance for finance receivable losses recognized on PCD loans acquired in the Foursight Acquisition.

See Note 4 for additional information.

(b) As a result of the adoption of ASU 2022-02, we recorded a one-time adjustment to the allowance for finance receivable losses.

Investment Securities

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Total $ 1,765 $ 5 $ ( 123 ) $ 1,647

* The allowance for credit losses related to our investment securities as of December 31, 2023 and 2022 was immaterial.

Interest receivables reported in Other assets in our consolidated balance sheets totaled $ 14 million as of December 31, 2023 and 2022.

* The allowance for credit losses related to our investment securities as of December 31, 2024 and December 31, 2023 was immaterial.

Interest receivables reported in Other assets in our consolidated balance sheets totaled $ 13 million and $ 14 million as of December 31, 2024 and December 31, 2023, respectively.

There were no material amounts reversed from investment revenue for available-for-sale securities for the years ended December 31, 2024 and 2023.

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3 — 56 ( 5 ) 59 ( 5 )

Commercial paper

14 — — — 14 —

government and government sponsored entities

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Total $ 68 $ 72

Net unrealized gains on other securities held were immaterial for the year ended December 31, 2023.

Net unrealized losses on other securities held were $ 9 million and immaterial for the years ended December 31, 2022 and 2021, respectively.

Net unrealized gains and losses on other securities held were immaterial for the years ended December 31, 2024, 2023, and 2022.

Net realized gains and losses on other securities sold or redeemed were immaterial for the years ended December 31, 2024, 2023, and 2022.

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Goodwill and Other Intangible Assets

The carrying amount of goodwill totaled $ 1.4 billion at December 31, 2023 and 2022.

As a result of the Foursight Acquisition, we recorded $ 37 million of goodwill, which we report in our C&I segment.

See Note 4 for further information.

Changes in the carrying amount of goodwill were as follows:

(dollars in millions) Consumer and Insurance

Year Ended December 31, 2024

Balance at beginning of period

Goodwill recognized upon acquisition

Balance at end of period

We did no t record any impairments to goodwill during 2024, 2023, and 2022.

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The gross carrying amount and accumulated amortization, in total and by major intangible asset class were as follows:

(dollars in millions) Gross Carrying Amount Accumulated Amortization Net Other Intangible Assets

(dollars in millions) Gross Carrying Amount *

Accumulated Amortization Net Other Intangible Assets

December 31, 2024

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Licenses 25 — 25

Customer relationships

105 ( 94 ) 11

Other 7 ( 1 ) 6

Total $ 383 $ ( 97 ) $ 286

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Total $ 351 $ ( 91 ) $ 260

Amortization expense was immaterial in 2023, and $ 13 million and $ 32 million in 2022 and 2021, respectively.

* In connection with the Foursight Acquisition, we recorded $ 32 million of intangible assets.

Amortization expense was immaterial in 2024 and 2023, and $ 13 million in 2022.

The estimated aggregate amortization of other intangible assets for each of the next five years is immaterial.

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Weighted average effective interest rates on long-term debt by type were as follows:

Years Ended December 31, At December 31,

2023 2022 2021 2023 2022

At December 31,

Senior debt 5.71 % 5.47 %

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Principal maturities of long-term debt by type of debt at December 31, 2024 were as follows:

(dollars in millions) Securitizations Private Secured Term Funding Revolving

(dollars in millions) Securitizations Private Secured Term Funding Facilities

Facilities Unsecured

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(b) The interest rates shown are the range of contractual rates in effect at December 31, 2024.

(c) Securitizations, private secured term funding, and borrowings under the revolving conduit facilities are not included in the above maturities by period due to their variable monthly repayments, which may result in pay-off prior to the stated maturity date.

See Note 9 for further information on our long-term debt associated with securitizations, private secured term funding, and revolving conduit facilities.

(d) Debt issuance costs are reported as a direct deduction from long-term debt, with the exception of debt issuance costs associated with our revolving conduit facilities and unsecured corporate revolver, which totaled $ 34 million at December 31, 2023 and are reported in Other assets in our consolidated balance sheets.

(c) Securitizations, private secured term funding facilities, and borrowings under the revolving conduit facilities are not included in the above maturities by period due to their variable monthly payments, which may result in pay-off prior to the stated maturity date.

See Note 10 for further information on our long-term debt associated with securitizations, private secured term funding facilities, and revolving conduit facilities.

(d) Debt issuance costs are reported as a direct deduction from long-term debt, with the exception of debt issuance costs associated with our revolving conduit facilities, credit card revolving variable funding note (“VFN”) facilities, and unsecured corporate revolver, which totaled $ 37 million at December 31, 2024 and are reported in Other assets in our consolidated balance sheets.

UNSECURED CORPORATE REVOLVER

During the fourth quarter of 2023, OMFC increased the total maximum borrowing capacity of our unsecured corporate revolver to $ 1.3 billion.

The corporate revolver has a five-year term beginning October 25, 2021, during which draws and repayments may occur.

Any outstanding principal balance is due and payable on October 25, 2026.

At December 31, 2023, no amounts were drawn under this facility.

At December 31, 2024, the borrowing capacity of our unsecured corporate revolver was $ 1.1 billion.

The corporate revolver has a five-year term, during which draws and repayments may occur.

Any outstanding principal balance is due and payable on September 6, 2029.

DEBT COVENANTS

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CONSOLIDATED VIES

As part of our overall funding strategy and as part of our efforts to support our liquidity from sources other than our traditional capital market sources, we have transferred certain finance receivables to VIEs for asset-backed financing transactions, including secured debt and revolving conduit transactions.

We have determined that OMFC or OneMain Financial Holdings, LLC (“OMFH”) is the primary beneficiary of these VIEs and, as a result, we include each VIE’s assets, including any finance receivables securing the VIE’s debt obligations, and related liabilities in our consolidated financial statements and each VIE’s asset-backed debt obligations are accounted for as secured borrowings.

OMFC or OMFH is deemed to be the primary beneficiary of each VIE because OMFC or OMFH, as applicable, has the ability to direct the activities of the VIE that most significantly impact its economic performance, including the losses it absorbs and its right to receive economic benefits that are potentially significant.

Such ability arises from OMFC’s or OMFH’s and their affiliates’ contractual right to service the finance receivables securing the VIEs’ debt obligations.

We are the primary beneficiary of these VIEs and, as a result, we include the VIEs’ assets, including any finance receivables securing the VIEs’ debt obligations, and related liabilities in our consolidated financial statements and the VIEs’ asset-backed debt obligations are accounted for as secured borrowings.

OneMain is deemed to be the primary beneficiary of each VIE because we have the ability to direct the activities of the VIE that most significantly impact its economic performance, including the losses it absorbs and its right to receive economic benefits that are potentially significant.

Such ability arises from our contractual right to service the finance receivables securing the VIEs’ debt obligations.

To the extent we retain any debt obligation or residual interest in an asset-backed financing facility, we are exposed to potentially significant losses and potentially significant returns.

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We have no obligation to repurchase or replace qualified finance receivables that subsequently become delinquent or are otherwise in default.

We parenthetically disclose on our consolidated balance sheets the VIE’s assets that can only be used to settle the VIE’s obligations and liabilities if its creditors have no recourse against the primary beneficiary’s general credit.

The carrying amounts of consolidated VIE assets and liabilities associated with our personal loan securitization trusts, private secured term funding, and revolving conduit facilities were as follows:

We parenthetically disclose on our consolidated balance sheets the VIEs’ assets that can only be used to settle the VIEs’ obligations and liabilities if its creditors have no recourse against the primary beneficiary’s general credit.

The carrying amounts of consolidated VIE assets and liabilities associated with our personal loan securitization trusts, private secured term funding facilities, revolving conduit facilities, and credit card revolving VFN facilities were as follows:

(dollars in millions)

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SECURITIZED BORROWINGS

Each of our securitizations contains a revolving period ranging from two to seven years during which no principal payments are required to be made on the related asset-backed notes.

The indentures governing our securitization borrowings contain early amortization events and events of default, that, if triggered, may result in the acceleration of the obligation to pay principal and interest on the related asset-backed notes.

PRIVATE SECURED TERM FUNDING

At December 31, 2023, an aggregate amount of $ 350 million was outstanding under the private secured term funding collateralized by our personal loans.

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.

Our outstanding OneMain Financial Issuance Trust (“OMFIT”) and OneMain Direct Auto Receivables Trust (“ODART”) securitizations contain a revolving period ranging from two to seven years during which no principal payments are required to be made on the related asset-backed notes.

The indentures governing our OMFIT and ODART securitized borrowings contain early amortization events and events of default, that, if triggered, may result in the acceleration of the obligation to pay principal and interest on the related asset-backed notes.

Our Foursight Capital Automobile Receivables Trust ("FCRT") securitizations are amortizing.

CREDIT CARD REVOLVING VFN FACILITIES

We have transferred credit card gross finance receivables to a master trust, OneMain Financial Credit Card Trust (“OMFCT”), and we continue to service and administer the credit cards.

As of December 31, 2024, OMFCT was the issuing entity for two credit card revolving VFN facilities by way of certain indenture supplements and note purchase agreements with a borrowing capacity of $ 300 million.

Each credit card revolving VFN facility has a revolving period during which no principal payments are required, but may be made without penalty, followed by a subsequent amortization period.

Principal balances of outstanding notes, if any, are due and payable in full over periods ranging up to five years as of December 31, 2024.

Amounts drawn on these credit card revolving VFN facilities are secured and collateralized by credit card gross finance receivables.

PRIVATE SECURED TERM FUNDING FACILITIES

On October 24, 2024, pursuant to an amendment, we converted a revolving conduit facility to a private secured term funding facility.

At December 31, 2024, the maximum borrowing capacity of $ 725 million was outstanding under the private secured term funding facilities.

No principal payments are required to be made until after June 2026, at the earliest, followed by a subsequent amortization period, which upon expiration the outstanding principal is due and payable.

REVOLVING CONDUIT FACILITIES

We had access to 16 revolving conduit facilities with a total maximum borrowing capacity of $ 6.4 billion as of December 31, 2023.

Our conduit facilities contain revolving periods during which time no principal payments are required, but may be made without penalty, followed by a subsequent amortization period.

Principal balances of outstanding loans, if any, are due and payable in full over periods ranging up to nine years as of December 31, 2023.

Amounts drawn on these facilities are collateralized by our personal loans.

We had access to 17 revolving conduit facilities with a borrowing capacity of $ 6.0 billion as of December 31, 2024.

Our conduit facilities contain revolving periods during which no principal payments are required, but may be made without penalty, followed by a subsequent amortization period.

Principal balances of outstanding loans, if any, are due and payable in full over periods ranging up to ten years as of December 31, 2024.

Amounts drawn on these facilities are collateralized by our consumer loans.

Our insurance business is conducted through our wholly owned insurance subsidiaries, American Health and Life Insurance Company (“AHL”) and Triton Insurance Company (“Triton”).

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Claim reserves 81 90

Subtotal (a) 771 749

Payable to third-party beneficiaries (b) 270 250

Non-finance receivable related (b) 345 370

Payable to third-party beneficiaries

Non-finance receivable related

Total $ 1,341 $ 1,386

(a) Reported in Unearned insurance premium and claim reserves in our consolidated balance sheets.

(b) Reported in Insurance claims and policyholder liabilities in our consolidated balance sheets.

The 2022 balances have been recast as a result of the modified retrospective adoption of ASU 2018-12.

See Note 3 for additional information on the adoption of ASU 2018-12.

* Reported in Unearned insurance premium and claim reserves in our consolidated balance sheets.

Our insurance subsidiaries enter into reinsurance agreements with other insurers.

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Reserves related to unearned premiums, claims and benefits ceded to non-affiliated insurance companies totaled $ 55 million and $ 57 million at December 31, 2024 and 2023, respectively.

Changes in the reserve for unpaid claims and loss adjustment expenses (net of reinsurance recoverables):

Changes in the reserve for unpaid claims and loss adjustment expenses (net of reinsurance recoverables) were as follows:

(dollars in millions)

At or for the Years Ended December 31, 2023 2022 (a) 2021 (a)

At or for the Years Ended December 31, 2024 2023 2022

Balance at beginning of period $ 108 $ 93 $ 102

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Current year 188 173 144

Prior years (b) ( 2 ) ( 12 ) ( 19 )

Prior years *

( 14 ) ( 2 ) ( 12 )

Total 174 171 132

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Balance at end of period $ 102 $ 108 $ 93

(a) As a result of the modified retrospective adoption of ASU 2018-12, we have recorded a $ 13 million reduction to the 2021 beginning balance, and the previously reported balances were recast to exclude reserves for unpaid claims on our long-duration contracts.

These reserves have been included in our estimate of the liability for future policy benefits as of the transition date of January 1, 2021.

See Note 3 for additional information on the adoption of ASU 2018-12.

(b) At December 31, 2023, $ 2 million reflected a redundancy in the prior years’ net reserves, primarily due to net favorable developments of credit disability claims during the period.

At December 31, 2022, $ 12 million reflected a redundancy in the prior years’ net reserves, primarily due to favorable development of credit life and credit disability claims during the period.

At December 31, 2021, $ 19 million reflected a redundancy in the prior years’ net reserves, primarily due to favorable development of credit disability and unemployment claims during the period.

* At December 31, 2024 and December 31, 2023, there was a redundancy in the prior years’ net reserves due to favorable development of credit disability claims during the periods.

At December 31, 2022, there was a redundancy in the prior years’ net reserves due to favorable development of credit life and credit disability claims during the period.

Incurred claims and allocated claim adjustment expenses, net of reinsurance, as of December 31, 2024, were as follows:

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There have been no significant changes in methodologies or assumptions during 2024.

Our average annual percentage payout of incurred claims by age, net of reinsurance, as of December 31, 2023, were as follows:

Our average annual percentage payouts of incurred claims by age, net of reinsurance, as of December 31, 2024, were as follows:

Years 1 2 3 4 5

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LIABILITY FOR FUTURE POLICY BENEFITS

The present value of expected net premiums on long-duration insurance contracts were as follows:

The present values of expected net premiums on long-duration insurance contracts were as follows:

At or for the

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Balance at ending of period $ 177 $ 33 $ 217 $ 41

The present value of expected future policy benefits on long-duration insurance contracts were as follows:

The present values of expected future policy benefits on long-duration insurance contracts were as follows:

At or for the

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Balance at ending of period $ 378 $ 96 $ 435 $ 113

The net liability for future policy benefits on long-duration insurance contracts were as follows:

The net liabilities for future policy benefits on long-duration insurance contracts were as follows:

At or for the

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Interest accretion $ 11 $ 3 $ 12 $ 4 $ 12 $ 4

The expected and actual experience for mortality, morbidity, and lapses of the liability for future policy benefits were as follows:

The expected and actual experiences for mortality, morbidity, and lapses of the liability for future policy benefits were as follows:

At or for the

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10 5 ( 11 ) 4 ( 4 ) 4

Reclassification adjustments from Accumulated other comprehensive loss

Balance at end of period $ ( 81 ) $ ( 3 ) $ ( 13 ) $ ( 1 ) $ 17 $ ( 81 )

3 unchanged sentences

38 — 3 3 ( 4 ) 40

Reclassification adjustments from accumulated other comprehensive income

( 1 ) — — — — ( 1 )

Balance at end of period $ ( 93 ) $ ( 8 ) $ ( 2 ) $ ( 5 ) $ 21 $ ( 87 )

1 unchanged sentence

Balance at beginning of period $ 49 $ 1 $ 3 $ ( 56 ) $ 8 $ 5

Impact of adoption of ASU 2018-12 — — — ( 76 ) — ( 76 )

Adjusted beginning balance 91 1 2 ( 76 ) — 18

Other comprehensive income (loss) before reclassifications

45 unchanged sentences

Balance at beginning of year $ 11 $ 6 $ 8

Increases in tax positions for prior years 10 — 1

Increases in tax positions for current years 2 6 —

Lapse in statute of limitations ( 2 ) ( 1 ) ( 3 )

Increases in tax positions for prior years — 1 2

Settlements with tax authorities ( 1 ) — —

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Goodwill 208 188

Debt fair value adjustment 42 42

Deferred loan fees 57 27

Fixed assets 14 16

Debt fair value adjustment 43 42

Total 340 293

9 unchanged sentences

Our operating leases primarily consist of leased office space, automobiles, and information technology equipment and have remaining lease terms of one to nine years .

Our operating right-of-use asset and liability balances were $ 165 million and $ 173 million, respectively, at December 31, 2023 and $ 152 million and $ 161 million, respectively, at December 31, 2022.

Our operating right-of-use asset and lease liability balances were $ 152 million and $ 162 million, respectively, at December 31, 2024 and $ 165 million and $ 173 million, respectively, at December 31, 2023.

At December 31, 2024, maturities of lease liabilities, excluding leases on a month-to-month basis, were as follows:

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

In March 2022, the staff of the United States Consumer Financial Protection Bureau (“CFPB”) notified us that, in accordance with the CFPB’s discretionary Notice and Opportunity to Respond and Advise (“NORA”) process, it is considering recommending that the CFPB take legal action against the Company in connection with alleged violations of the Consumer Financial Protection Act, 12 U.S.C.

§§ 5531, 5536.

On May 31, 2023, the Company entered into a consent order with the CFPB to resolve this previously disclosed investigation focused on certain refunding practices for optional insurance and membership plan products that were subsequently canceled by the customer after purchase.

Pursuant to the consent order, we agreed to issue $ 10 million in interest refunds to affected customers, pay a $ 10 million civil penalty and make certain other enhancements to our sales and refunding practices.

In agreeing to the consent order, we did not admit to any of the CFPB’s factual findings or legal conclusions.

Retirement Benefit Plans

4 unchanged sentences

employees for 2024, 2023, and 2022.

The salaries and benefits expense associated with this plan was $ 19 million in 2023, $ 19 million in 2022, and $ 17 million in 2021.

The salaries and benefits expense associated with this plan was $ 19 million in 2024, 2023, and 2022.

In addition, the Company may make a discretionary profit sharing contribution to the 401(k) Plan.

4 unchanged sentences

The OneMain Holdings, Inc.

Nonqualified Deferred Compensation Plan (the “NQDC Plan”) was approved by the committee of the Board which oversees OMH’s compensation programs (the “Compensation Committee”) in October 2021 and provides certain eligible employees with the option to defer receipt of some or all of their annual cash incentives and some of their base salaries earned on or after January 1, 2022.

Employer contributions are not permitted under the NQDC Plan and employee contributions will be fully vested at all times.

Distributions of participant accounts will be made following a participant’s separation of service, death, disability, unforeseeable emergency or as of a future payment date specified by the participant.

The NQDC Plan assets and related obligation was immaterial as of December 31, 2023.

Nonqualified Deferred Compensation Plan (the “NQDC Plan”) provides certain eligible employees with the option to defer receipt of some or all of their annual cash incentives and some of their base salaries earned on or after January 1, 2022.

Employer contributions are not permitted under the NQDC Plan and employee contributions are fully vested at all times.

Distributions of participant accounts are made following a participant’s separation of service, death, disability, unforeseeable emergency or as of a future payment date specified by the participant.

The NQDC Plan assets and related obligation were immaterial as of December 31, 2024, 2023, and 2022.

Investment income or loss earned by the NQDC Plan is recorded as Other revenues - other in our consolidated statements of operations.

39 unchanged sentences

Net plan assets recognized in our consolidated balance sheets (b)

Pretax net gain (loss) recognized in accumulated other comprehensive income (loss)

Pretax net loss recognized in Accumulated other comprehensive loss

$ ( 3 ) $ ( 9 ) $ ( 10 )

(a) For the years ended December 31, 2023, 2022, and 2021, the actuarial gains or losses were primarily due to year-over-year fluctuations in discount rates used to calculate the present value of benefit obligations for the defined benefit plans.

(a) For the years ended December 31, 2024, 2023, and 2022, the actuarial gains or losses were due to year-over-year fluctuations in discount rates used to calculate the present value of benefit obligations for the defined benefit plans.

Adoption of updated mortality assumptions had additional impacts on calculation of gains or losses.

8 unchanged sentences

Other changes in plan assets and projected benefit obligation recognized in other comprehensive income or loss:

Net actuarial loss — 12 1

Net actuarial (gain) loss

Total recognized in other comprehensive income

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Expected Cash Flows

Funding for the U.S.

pension plan ranges from the minimum amount required by ERISA to the maximum amount that would be deductible for U.S.

tax purposes.

This range is generally not determined until the fourth quarter.

Contributed amounts in excess of the minimum amounts are deemed voluntary.

Amounts in excess of the maximum amount would be subject to an excise tax and may not be deductible under the Internal Revenue Code.

Supplemental and excess plans’ payments and postretirement plan payments are deductible when paid.

The expected future benefit payments, net of participants’ contributions, of our defined benefit pension plans at December 31, 2024 are as follows:

79 unchanged sentences

Granted 142,282 49.68

Vested ( 81,728 ) 42.59

Forfeited ( 254,638 ) 47.68

2 unchanged sentences

Cash-settled Stock-based Awards

OMH has granted cash-settled stock-based awards to certain executives.

These awards are granted with vesting conditions relating to the trading price of OMH's common stock and the portion of OMH's common stock owned by stockholders other than the Apollo-Värde Group, and certain other terms and conditions.

The awards provide for the right to accrue cash dividend equivalents.

OMH has previously granted cash-settled stock-based awards to certain executives.

These awards were granted with vesting conditions relating to the trading price of OMH’s common stock and certain other terms and conditions.

The awards provided for the right to accrue cash dividend equivalents.

The grant date fair value of the cash-settled stock-based awards was zero because the satisfaction of the required event-based performance conditions was not considered probable as of the grant dates.

No vesting conditions were satisfied during 2024, 2023, or 2022 related to these awards.

During 2021, the vesting conditions related to a portion of the cash-settled stock-based awards were satisfied and we recognized $ 54 million in salaries and benefits expense.

For the remaining unvested awards, the fair value was estimated using an option-pricing model on the date the required event-based performance condition was satisfied.

The unvested cash-settled stock-based awards are liability-classified and expense is recognized over the requisite service period, which is the period of time the remaining vesting conditions are expected to be satisfied.

Additional salaries and benefits expense related to unvested cash-settled stock-based awards was immaterial during 2023, 2022 and 2021.

The remaining unvested awards expired during 2024.

Additional salaries and benefits expense related to the unvested cash-settled stock-based awards was immaterial during 2024, 2023 and 2022.

Employee Stock Purchase Plan

2 unchanged sentences

The Board and stockholders of OMH approved and authorized 1,000,000 shares for issuance under the ESP Plan and became effective January 1, 2022.

The Company issued 81,389 shares and 80,470 shares of treasury stock associated with the ESP Plan in 2023 and 2022, respectively.

The Company issued 78,694 shares, 81,389 shares and 80,470 shares of treasury stock associated with the ESP Plan in 2024, 2023, and 2022, respectively.

The Company’s expense associated with the ESP Plan is recorded in Salaries and benefits on our consolidated statements of operations and was immaterial during 2024, 2023, and 2022.

23 unchanged sentences

Insurance policy benefits and claims - Directly correlated to the C&I segment.

Acquisition-related transaction and integration expenses - Directly correlated to the C&I segment and consist primarily of:

(i) acquisition-related transaction and integration costs related to the Foursight Acquisition, including legal and other professional fees and (ii) software termination costs.

The "Segment to GAAP Adjustment” column in the following tables primarily consists of:

• Interest income - reverses the impact of premiums/discounts on certain purchased finance receivables and the interest income recognition under guidance in ASC 310-20, Nonrefundable Fees and Other Costs , and ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality , prior to the adoption of ASU 2016-13 on January 1, 2020, and reestablishes interest income recognition on a historical cost basis;

• Interest expense - reverses the impact of premiums/discounts on acquired long-term debt and reestablishes interest expense recognition on a historical cost basis;

• Provision for finance receivable losses - reverses the impact of providing an allowance for finance receivable losses upon acquisition and reestablishes the allowance on a historical cost basis leveraging historical TDR finance receivables;

• Other revenues - reestablishes the historical cost basis of mark-to-market adjustments on finance receivables held for sale and on realized gains/losses associated with our investment portfolio;

• Provision for finance receivable losses - reverses the impact of providing an allowance for finance receivable losses upon acquisition and reestablishes the allowance on a historical cost basis;

• Other expenses - reestablishes expenses on a historical cost basis by reversing the impact of amortization from acquired intangible assets, including amortization of other historical deferred costs and the amortization of purchased software assets on a historical cost basis.

• Assets - revalues assets based on their fair values at the effective date of the acquisition.

Assets were adjusted to present the impacts of deferred taxes associated with the acquisition on a net basis at December 31, 2023.

The assets in the “Segment to GAAP Adjustment” column primarily represent goodwill and intangible assets acquired.

We have identified the following significant segment expenses:

Interest expense, Provision for finance receivable losses, Salaries and benefits expense, Other operating expenses, and Insurance policy benefits and claims expense.

Based on our identified significant segment expenses, there are no other segment items.

Our chief operating decision maker (“CODM”) is our Chief Executive Officer (“CEO”).

The CODM uses Income (loss) before income tax expense (benefit) to assess the performance of the C&I segment, allocate resources, and make strategic operating decisions.

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

10 unchanged sentences

Other revenues 689 7 ( 1 ) 695

Other expenses 1,705 16 ( 2 ) 1,719

Salaries and benefits

Other operating expenses

Insurance policy benefits and claims

Income (loss) before income tax expense (benefit)

9 unchanged sentences

Other revenues 727 8 — 735

Other expenses 1,593 14 8 1,615

Salaries and benefits

Other operating expenses

668 9 ( 2 ) 675

Insurance policy benefits and claims

Income (loss) before income tax expense (benefit)

7 unchanged sentences

Other revenues 618 12 ( 1 ) 629

Other expenses 1,577 21 26 1,624

Salaries and benefits

Other operating expenses

Insurance policy benefits and claims

Income (loss) before income tax expense (benefit) $ 1,169 $ — $ ( 14 ) $ 1,155

34 unchanged sentences

Cash equivalents in mutual funds $ 55 $ — $ — $ 55

Cash equivalents in securities — 5 — 5

Investment securities:

18 unchanged sentences

Restricted cash equivalents in mutual funds 672 — — 672

Restricted cash equivalents in securities — 7 — 7

Total $ 781 $ 1,562 $ 3 $ 2,346

3 unchanged sentences

Cash equivalents in mutual funds $ 97 $ — $ — $ 97

Cash equivalents in securities — 17 — 17

Investment securities:

18 unchanged sentences

Restricted cash equivalents in mutual funds 525 — — 525

Restricted cash equivalents in securities — 11 — 11

Total $ 676 $ 1,662 $ 3 $ 2,341

28 unchanged sentences

The degree of judgment and estimation applied is significant in light of the current capital markets and, more broadly, economic environments.

Therefore, the fair value of our finance receivables could not be determined with precision and may not be realized in an actual sale.

Therefore, the fair value of our finance receivables may not be realized in an actual sale.

Additionally, there may be inherent limitations in the valuation methodologies we employed, and changes in the underlying assumptions used could significantly affect the results of current or future values.

Long-term Debt

We either receive fair value measurements of our long-term debt from market participants and pricing services or we estimate the fair values of long-term debt using projected cash flows discounted at each balance sheet date’s market-observable implicit-credit spread rates for our long-term debt.

We estimate the fair values associated with variable rate secured term funding and revolving lines of credit to be equal to par.

We either receive fair value measurements of our long-term debt from market participants and pricing services or we estimate the fair values of long-term debt using projected cash flows discounted at the market-observable implicit-credit spread rates at each balance sheet date.

We estimate the fair values associated with variable rate private secured term funding facilities, revolving conduit facilities, and credit card revolving VFN facilities to be equal to par.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data