Allowance for Finance Receivable Losses (Tables)

12 Months Ended

Dec. 31, 2012

Allowance for Finance Receivable Losses

Schedule of changes in the allowance for finance receivable losses by finance receivable type

	Personal			Retail			Real					Consolidated
(dollars in thousands)	Loans			Sales Finance			Estate Loans (a)			Other		Total
Successor Company
Year Ended
December 31, 2012
Balance at beginning of period	$	39,522		$	1,007		$	31,471		$	-	$	72,000
Provision for finance receivable losses	114,288			11,061			212,254			-		337,603
Charge-offs	(119,383		)	(20,035		)	(141,867		)	-		(281,285		)
Recoveries	33,260			10,421			9,438			-		53,119
Transfers to finance receivables held for sale (b)	(1,107		)	(194		)	-			-		(1,301		)
Balance at end of period	$	66,580		$	2,260		$	111,296		$	-	$	180,136
Successor Company
Year Ended
December 31, 2011
Balance at beginning of period	$	4,111		$	56		$	2,953		$	-	$	7,120
Provision for finance receivable losses	105,811			14,821			211,689			-		332,321
Charge-offs	(105,219		)	(25,861		)	(196,737		)	-		(327,817		)
Recoveries (c)	34,819			11,991			13,566			-		60,376
Balance at end of period	$	39,522		$	1,007		$	31,471		$	-	$	72,000
Successor Company
One Month Ended
December 31, 2010
Balance at beginning of period (d)	$	-		$	-		$	-		$	-	$	-
Provision for finance receivable losses	9,843			3,293			25,569			-		38,705
Charge-offs	(8,546		)	(4,260		)	(23,332		)	-		(36,138		)
Recoveries	2,814			1,023			716			-		4,553
Balance at end of period	$	4,111		$	56		$	2,953		$	-	$	7,120
Predecessor Company
Eleven Months Ended
November 30, 2010
Balance at beginning of period	$	288,420		$	63,621		$	1,160,743		$	3,514	$	1,516,298
Provision for finance receivable losses	69,578			38,115			336,046			534		444,273
Charge-offs	(199,718		)	(82,388		)	(368,419		)	289		(650,236		)
Recoveries	34,437			11,960			10,782			67		57,246
Affiliates contributed by SLFI to SLFC (e)	3,575			3,743			8,869			-		16,187
Balance at end of period	$	196,292		$	35,051		$	1,148,021		$	4,404	$	1,383,768

(a) To conform to our 2012 presentation, we have combined the branch real estate and centralized real estate data previously reported separately in prior years due to a change in method of monitoring and assessing the credit risk of our liquidating real estate loan portfolio.

(b) During the first quarter of 2012, we decreased the allowance for finance receivable losses as a result of the transfers of $77.8 million of finance receivables from finance receivables held for investment to finance receivables held for sale due to management’s intent to no longer hold these finance receivables for the foreseeable future.

(c) Recoveries during 2011 included $5.0 million ($1.9 million consumer personal loan recoveries, $0.2 million consumer retail sales finance recoveries, and $2.9 million real estate loan recoveries) as a result of a settlement of claims relating to our February 2008 purchase of Equity One, Inc.’s consumer branch finance receivable portfolio.

(d) The beginning balance of allowance for finance receivable losses for the Successor Company for the one month ended December 31, 2010 includes the push-down accounting adjustments.

(e) Effective January 1, 2010, SLFI contributed two of its wholly-owned subsidiaries to SLFC. The contribution included $16.2 million of allowance for finance receivable losses.

Schedule of allowance for finance receivable losses and net finance receivables by type and by impairment method

	Personal		Retail		Real
(dollars in thousands)	Loans		Sales Finance		Estate Loans		Other		Total
Successor Company
December 31, 2012
Allowance for finance receivable losses for finance receivables:
Collectively evaluated for impairment	$	66,580	$	2,260	$	1,600	$	-	$	70,440
Acquired with deteriorated credit quality (purchased credit impaired finance receivables)	-		-		16,973		-		16,973
Individually evaluated for impairment (TDR finance receivables)	-		-		92,723		-		92,723
Total	$	66,580	$	2,260	$	111,296	$	-	$	180,136
Finance receivables:
Collectively evaluated for impairment	$	2,649,732	$	208,357	$	6,641,453	$	-	$	9,499,542
Purchased credit impaired finance receivables	-		-		1,390,765		-		1,390,765
TDR finance receivables	-		-		806,420		-		806,420
Total	$	2,649,732	$	208,357	$	8,838,638	$	-	$	11,696,727
Successor Company
December 31, 2011
Allowance for finance receivable losses for finance receivables:
Collectively evaluated for impairment	$	39,522	$	1,007	$	2,111	$	-	$	42,640
Purchased credit impaired finance receivables	-		-		-		-		-
TDR finance receivables	-		-		29,360		-		29,360
Total	$	39,522	$	1,007	$	31,471	$	-	$	72,000
Finance receivables:
Collectively evaluated for impairment	$	2,682,011	$	369,802	$	8,016,034	$	120,428	$	11,188,275
Purchased credit impaired finance receivables	-		-		1,529,335		-		1,529,335
TDR finance receivables	-		-		298,509		-		298,509
Total	$	2,682,011	$	369,802	$	9,843,878	$	120,428	$	13,016,119