12. Income Taxes

At September 30, 2013, we had a net deferred tax liability of $167.7 million, compared to $298.9 million at December 31, 2012. The decrease in the net deferred tax liability was primarily due to an improvement in the fair value of our finance receivables, which are marked to market value for tax basis. The decrease also reflected the recording of a deferred tax asset related to the accrual of expenses associated with the grant of restricted stock units (“RSUs”). See Note 16 for further discussion on the grant of RSUs of Springleaf Holdings, LLC, the predecessor entity of SHI, to certain of our executives on September 30, 2013. We had a partial valuation allowance on our state deferred tax assets, net of a deferred federal tax benefit of $21.3 million at September 30, 2013, compared to $19.7 million at December 31, 2012. We also had a valuation allowance against our United Kingdom operations of $20.1 million at September 30, 2013 and $19.6 million at December 31, 2012.

The effective tax rate for the nine months ended September 30, 2013 was 36.3%. The effective tax rate differed from the federal statutory rate primarily due to an increase of 2.2% for the benefit from state income taxes, net of provision for federal income taxes, an increase of 1.2% for the benefit of tax exempt income, and a decrease of 1.0% for an out-of-period adjustment in the first quarter of 2013. This adjustment, although temporary in nature, had an impact on the state tax expense since the adjustment impacted various states that have net operating losses and valuation allowances.