4. Finance Receivables Held for Sale

During the nine months ended September 30, 2013, we did not have any transfer activity between finance receivables held for investment to finance receivables held for sale.

During the first and third quarters of 2012, we transferred $77.8 million and $103.1 million, respectively, of finance receivables from held for investment to held for sale due to management’s intent to no longer hold these finance receivables for the foreseeable future. We marked these loans to the lower of cost or fair value at the time of transfer and subsequently recorded additional gains in other revenues – other at the time of sale resulting in net gains for the three and nine months ended September 30, 2012 of $6.5 million and $4.5 million, respectively. During the three and nine months ended September 30, 2012, we sold finance receivables held for sale totaling $123.0 million and $171.0 million, respectively.

We repurchased two loans for $0.3 million during the three months ended September 30, 2013, compared to five loans for $1.0 million repurchased during the three months ended September 30, 2012. We repurchased 19 loans for $2.8 million during the nine months ended September 30, 2013, compared to six loans for $1.1 million during the nine months ended September 30, 2012. In each period, we repurchased the loans because such loans were reaching the defined delinquency limits or had breached the contractual representations and warranties under the loan sale agreements. At September 30, 2013, there were no material unresolved recourse requests.

The activity in our reserve for sales recourse obligations was as follows:

At or for the

Three Months

Nine Months

Ended

September 30,

(dollars in thousands)

2013

2012

2013

2012

Balance at beginning of period

4,766

1,765

4,863

1,648

Provision for recourse obligations

322

117

Recourse losses

(42

)

(25

)

(461

)

(25

)

Balance at end of period

4,724

1,740

4,724

1,740