OneMain Holdings (OMF) risk factors, FY2024 10-K

RISKS RELATED TO OUR BUSINESS

1. 01Our financial condition and results of operations and our borrowers’ ability to make payments on their loans have been, and may in the future be, adversely affected by economic conditions and other factors that we cannot control
2. 02If our estimates of allowance for finance receivable losses are not adequate to absorb actual losses, our provision for finance receivable losses would increase, which could adversely affect our results of operations
3. 03Our valuations may include methodologies, models, estimations, and assumptions that are subject to differing interpretations and could result in changes to financial assets and liabilities that may materially adversely affect our financial condition and results of operations
4. 04Our risk management efforts may not be effective
5. 05Changes 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
6. 06Changes 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
7. 07Our 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
8. 08Our business and reputation may be materially impacted by information system failures, cyber-attacks, or network disruptions
9. 09There may be losses or unauthorized access to or releases of confidential information, including personally identifiable information (PII), that could subject us to significant reputational, financial, legal, and operational consequences
10. 10We are also subject to the theft or misuse of physical customer and employee records at our facilities
11. 11Our insurance operations are subject to risks and uncertainties, including claims, catastrophic events, underwriting risks, and dependence on a primary distribution channel
12. 12Our use of derivatives exposes us to credit and market risks
13. 13We 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
14. 14If goodwill and other intangible assets become impaired, it could have a negative impact on our profitability
15. 15Damage to our reputation could adversely impact our business and financial results
16. 16There are risks associated with the acquisition or sale of assets or businesses and the formation, termination, or operation of joint ventures or other strategic alliances, which could have a material adverse effect on our financial condition, results of operations, and liquidity

RISKS RELATED TO OUR INDUSTRY AND REGULATION

1. 17We 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
2. 18We 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
3. 19Requirements of the Dodd-Frank Act and oversight by the CFPB significantly increase our regulatory costs and burdens
4. 20Current and proposed regulations relating to consumer privacy, data protection, and cybersecurity could increase our costs
5. 21Our use of third-party vendors is subject to regulatory review
6. 22We purchase and sell finance receivables, including charged-off receivables and receivables where the borrower is in default. This practice could subject us to heightened regulatory scrutiny, which may expose us to legal action, cause us to incur losses and/or limit or impede our collection activity
7. 23Changes in law and regulatory developments could result in significant additional compliance costs relating to securitizations
8. 24We may have to constrain our business activities to avoid being deemed an investment company under the Investment Company Act

RISKS RELATED TO OUR INDEBTEDNESS

1. 25An inability to access adequate sources of liquidity may adversely affect our ability to fund operational requirements and satisfy financial obligations
2. 26Our 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
3. 27Certain of our outstanding notes contain covenants that restrict our operations and may inhibit our ability to grow our business and increase revenues
4. 28The assessment of our liquidity is based upon significant judgments and estimates that could prove to be materially incorrect
5. 29OMFC'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
6. 30Our securitizations may expose us to financing and other risks, and there can be no assurance that we will be able to access the securitization market in the future, which may require us to seek more costly financing

RISKS RELATED TO OUR ORGANIZATION AND STRUCTURE

1. 31OMH and OMFC are holding companies with no operations and rely on our operating subsidiaries to provide us with funds necessary to meet our financial obligations and enable us to pay dividends
2. 32OMH may not pay dividends on its common stock in the future, even if liquidity and leverage targets are met
3. 33Certain provisions of our Stockholders Agreement, restated certificate of incorporation, and amended and restated bylaws could hinder, delay or prevent a change in control of OMH, which could adversely affect the price of OMH's common stock
4. 34Licensing and insurance laws and regulations may delay or impede purchases of OMH's common stock

RISKS RELATED TO OMH'S COMMON STOCK

1. 35The 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
2. 36Future offerings of debt or equity securities by us may adversely affect the market price of OMH's common stock
3. 37The future issuance of additional common stock in connection with our incentive plans, acquisitions or otherwise will dilute all other stockholdings

GENERAL RISKS

1. 38We are a party to various lawsuits and proceedings and may become a party to various lawsuits and proceedings in the future which, if resolved in a manner adverse to us, could have a material adverse effect on our financial condition, results of operations, and liquidity
2. 39Certain operations rely on external vendors
3. 40If we lose the services of any of our key management personnel, our business could suffer
4. 41Employee misconduct could harm us by subjecting us to monetary loss, significant legal liability, regulatory scrutiny and reputational harm