11. Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2013

Fair Value Measurements Tables

Reconciliation of the acquired finance receivables and related debt measured at fair value on a recurring basis

	Three Months Ended
	March 31,
	2013			2012
	(in thousands)
Finance Receivables Measured at Fair Value:
Balance at beginning of period	$	59,668		$	160,253
Payments on finance receivables at fair value		(16,519	)		(36,500	)
Charge-offs on finance receivables at fair value		(1,001	)		(2,503	)
Discount accretion		886			4,163
Mark to fair value		(13	)		1,510
Balance at end of period	$	43,021		$	126,923
Debt Secured by Finance Receivables Measured at Fair Value:
Balance at beginning of period	$	57,107		$	166,828
Principal payments on debt at fair value		(17,930	)		(39,191	)
Premium accretion		1,104			2,980
Mark to fair value		106			2,400
Balance at end of period		40,387			133,017
Reduction for principal payments collected and payable		(5,687	)		(13,270	)
Adjusted balance at end of period	$	34,700		$	119,747

Comparision of fair values of the Fireside receivables and the related secured debt

	March 31, 2013				December 31, 2012
	Contractual		Fair		Contractual		Fair
	Balance		Value		Balance		Value
	(In thousands)
Fireside receivables portfolio	$	43,284	$	43,021	$	60,804	$	59,668
Debt secured by Fireside receivables portfolio		23,466		40,387		41,365		57,107

Reconciliation for level 3 assets

	Three Months Ended
	March 31,
	2013			2012
	(in thousands)
Residual Interest in Securitizations:
Balance at beginning of period	$	4,824		$	4,414
Cash paid (received) during period		(1,319	)		(26	)
Included in earnings		–			224
Balance at end of period	$	3,505		$	4,612
Warrant Derivative Liability:
Balance at beginning of period	$	355		$	967
Included in earnings		228			203
Reclassification to equity		(583	)		(1,056	)
Balance at end of period	$	–		$	114

Qualitative information about level 3 fair value measurements

Financial Instrument	Fair Values as of						Inputs as of
	March 31,		December 31,		Valuation	Unobservable	March 31,		December 31,
	2013		2012		Techniques	Inputs	2013		2012
	(In thousands)
Assets:
Finance receivables measured at fair value	$	43,021	$	59,668	Discounted cash flows	Discount rate		20.4%		20.4%
						Cumulative net losses		5.5%		5.5%
						Monthly average prepayments		0.5%		0.5%
Residual interest in securitizations		3,505		4,824	Discounted cash flows	Discount rate		20.0%		20.0%
						Cumulative net losses		14.0%		13.5%
						Monthly average prepayments		0.5%		0.5%
Liabilities:
Warrant derivative liability	$	–	$	355	Binomial	Stock price		n/a		$5.36/sh
						Volatility		n/a		40.0%
						Risk free rate		n/a		1.26%
Debt secured by receivables measured at fair value		40,387		57,107	Discounted cash flows	Discount rate		16.2%		16.2%

Estimated fair values of financial assets and liabilities

	As of March 31, 2013
Financial Instrument	(In thousands)
	Carrying		Fair Value Measurements Using:
	Value		Level 1		Level 2		Level 3		Total
Assets:
Cash and cash equivalents	$	13,866	$	13,866	$	–	$	–	$	13,866
Restricted cash and equivalents		139,393		139,393		–		–		139,393
Finance receivables, net		832,549		–		–		822,921		822,921
Finance receivables measured at fair value		43,021		–		–		43,021		43,021
Residual interest in securitizations		3,505		–		–		3,505		3,505
Accrued interest receivable		10,602		–		–		10,602		10,602
Liabilities:
Warehouse lines of credit	$	26,676	$	–	$	–	$	26,676	$	26,676
Accrued interest payable		3,077		–		–		3,077		3,077
Residual interest financing		13,773		–		–		13,773		13,773
Debt secured by receivables measured at fair value		40,387		–		–		40,387		40,387
Securitization trust debt		901,679		–		–		913,591		913,591
Senior secured debt		50,789		–		–		50,789		50,789
Subordinated renewable notes		23,558		–		–		23,558		23,558

	As of December 31, 2012
Financial Instrument	(In thousands)
	Carrying		Fair Value Measurements Using:
	Value		Level 1		Level 2		Level 3		Total
Assets:
Cash and cash equivalents	$	12,966	$	12,966	$	–	$	–	$	12,966
Restricted cash and equivalents		104,445		104,445		–		–		104,445
Finance receivables, net		744,749		–		–		740,511		740,511
Finance receivables measured at fair value		59,668		–		–		59,668		59,668
Residual interest in securitizations		4,824		–		–		4,824		4,824
Accrued interest receivable		10,411		–		–		10,411		10,411
Liabilities:
Warrant derivative liability	$	355	$	–	$	–	$	355	$	355
Warehouse lines of credit		21,731		–		–		21,731		21,731
Accrued interest payable		2,795		–		–		2,795		2,795
Residual interest financing		13,773		–		–		13,773		13,773
Debt secured by receivables measured at fair value		57,107		–		–		57,107		57,107
Securitization trust debt		792,497		–		–		803,290		803,290
Senior secured debt		50,135		–		–		50,135		50,135
Subordinated renewable notes		23,281		–		–		23,281		23,281