4. Allowance for Finance Receivable Losses

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

	Personal			Retail			Real			Consolidated
(dollars in thousands)	Loans			Sales Finance			Estate Loans			Total

Three Months Ended
March 31, 2013

Balance at beginning of period	$	66,580		$	2,260		$	111,296		$	180,136
Provision for finance receivable losses	25,021			390			70,674			96,085
Charge-offs (a)	(42,769		)	(3,327		)	(34,231		)	(80,327		)
Recoveries	9,088			2,327			2,436			13,851
Balance at end of period	$	57,920		$	1,650		$	150,175		$	209,745

Three Months Ended
March 31, 2012

Balance at beginning of period	$	39,522		$	1,007		$	31,471		$	72,000
Provision for finance receivable losses	21,229			3,778			42,175			67,182
Charge-offs	(29,916		)	(6,508		)	(40,764		)	(77,188		)
Recoveries	9,073			3,030			2,346			14,449
Transfers to finance receivables held for sale (b)	(1,107		)	(194		)	-			(1,301		)
Balance at end of period	$	38,801		$	1,113		$	35,228		$	75,142

(a) Effective March 31, 2013, we charge off to the allowance for finance receivable losses personal loans that are 180 days past due. Previously, we charged off to the allowance for finance receivable losses personal loans on which payments received in the prior six months totaled less than 5% of the original loan amount. As a result of this change, we recorded $12.9 million of additional charge-offs in March 2013.

(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.

Included in the table above is allowance for finance receivable losses associated with securitizations totaling $24.9 million at March 31, 2013 and $14.7 million at December 31, 2012. (The allowance for finance receivable losses related to our securitized finance receivables at December 31, 2012 was previously incorrectly understated by $4.7 million and has been revised to include the allowance for finance receivable losses on our securitized purchased credit impaired finance receivables.) See Note 10 for further discussion regarding our securitization transactions.

After the FCFI Transaction, the recorded investment or carrying amount of finance receivables includes the impact of push-down adjustments. The carrying amount charged off for non-credit impaired loans was $34.3 million for the three months ended March 31, 2013, compared to $53.8 million for the three months ended March 31, 2012.

The carrying amount charged off for purchased credit impaired loans was $9.9 million for the three months ended March 31, 2013, compared to $9.1 million for the three months ended March 31, 2012. These amounts represent additional impairment recognized, subsequent to the establishment of the pools of purchased credit impaired loans, related to loans that have been foreclosed and transferred to real estate owned status.

The allowance for finance receivable losses and net finance receivables by type and by impairment method were as follows:

	Personal		Retail		Real
(dollars in thousands)	Loans		Sales Finance		Estate Loans		Total

March 31, 2013

Allowance for finance receivable losses for finance receivables:
Collectively evaluated for impairment	$	57,920	$	1,650	$	1,560	$	61,130
Acquired with deteriorated credit quality (purchased credit impaired finance receivables)	-		-		29,145		29,145
Individually evaluated for impairment (TDR finance receivables)	-		-		119,470		119,470
Total	$	57,920	$	1,650	$	150,175	$	209,745

Finance receivables:
Collectively evaluated for impairment	$	2,648,161	$	170,921	$	6,270,390	$	9,089,472
Purchased credit impaired finance receivables	-		-		1,370,094		1,370,094
TDR finance receivables	-		-		967,900		967,900
Total	$	2,648,161	$	170,921	$	8,608,384	$	11,427,466

December 31, 2012

Allowance for finance receivable losses for finance receivables:
Collectively evaluated for impairment	$	66,580	$	2,260	$	1,600	$	70,440
Purchased credit impaired finance receivables	-		-		16,973		16,973
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