Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2014 | 15-May-14 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'SPRINGLEAF FINANCE CORP | ' |
Entity Central Index Key | '0000025598 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 31-Mar-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Non-accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 10,160,019 |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Assets | ' | ' |
Cash and cash equivalents | $719,032 | $374,835 |
Investment securities | 608,460 | 555,614 |
Net finance receivables: | ' | ' |
Personal loans (includes loans of consolidated VIEs of $1.8 billion in 2014 and $1.6 billion in 2013) | 3,168,643 | 3,159,932 |
Real estate loans (includes loans of consolidated VIEs of $4.7 billion in 2014 and $5.6 billion in 2013) | 6,874,115 | 7,885,016 |
Retail sales finance | 82,197 | 98,911 |
Net finance receivables | 10,124,955 | 11,143,859 |
Allowance for finance receivable losses (includes allowance of consolidated VIEs of $153.9 million in 2014 and $153.1 million in 2013) | -364,303 | -332,195 |
Net finance receivables, less allowance for finance receivable losses | 9,760,652 | 10,811,664 |
Note receivable from parent | 167,989 | 167,989 |
Restricted cash (includes restricted cash of consolidated VIEs of $327.8 million in 2014 and $345.9 million in 2013) | 341,480 | 358,759 |
Other assets | 409,244 | 463,176 |
Total assets | 12,006,857 | 12,732,037 |
Liabilities and Shareholder's Equity | ' | ' |
Long-term debt (includes debt of consolidated VIEs of $5.1 billion in 2014 and $5.2 billion in 2013) | 9,810,291 | 10,640,728 |
Insurance claims and policyholder liabilities | 394,132 | 394,168 |
Deferred and accrued taxes | 144,026 | 145,534 |
Other liabilities | 276,518 | 223,466 |
Total liabilities | 10,624,967 | 11,403,896 |
Shareholder's equity: | ' | ' |
Common stock | 5,080 | 5,080 |
Additional paid-in capital | 432,515 | 422,015 |
Accumulated other comprehensive income | 33,142 | 28,095 |
Retained earnings | 911,153 | 872,951 |
Total shareholder's equity | 1,381,890 | 1,328,141 |
Total liabilities and shareholder's equity | $12,006,857 | $12,732,037 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Personal loans | $3,168,643 | $3,159,932 |
Real estate loans | 6,874,115 | 7,885,016 |
Allowance for finance receivable losses | 364,303 | 332,195 |
Restricted cash | 341,480 | 358,759 |
Long-term debt | 9,810,291 | 10,640,728 |
Consolidated Variable Interest Entity (VIEs) | ' | ' |
Personal loans | 1,800,000 | 1,600,000 |
Real estate loans | 4,700,000 | 5,600,000 |
Allowance for finance receivable losses | 153,873 | 153,084 |
Restricted cash | 327,846 | 345,906 |
Long-term debt | $5,061,864 | $5,160,227 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Condensed Consolidated Statements of Operations | ' | ' |
Interest income | $402,569 | $408,517 |
Interest expense | 181,746 | 230,306 |
Net interest income | 220,823 | 178,211 |
Provision for finance receivable losses | 107,012 | 94,231 |
Net interest income after provision for finance receivable losses | 113,811 | 83,980 |
Other revenues: | ' | ' |
Insurance | 38,419 | 32,900 |
Investment | 9,431 | 8,838 |
Net loss on repurchases and repayments of debt | -6,615 | ' |
Net gain on sales of real estate loans and related trust assets | 55,186 | ' |
Other | 3,034 | 5,262 |
Total other revenues | 99,455 | 47,000 |
Operating expenses: | ' | ' |
Salaries and benefits | 82,186 | 77,898 |
Other operating expenses | 50,433 | 48,962 |
Insurance losses and loss adjustment expenses | 18,365 | 14,754 |
Total other expenses | 150,984 | 141,614 |
Income (loss) before provision for (benefit from) income taxes | 62,282 | -10,634 |
Provision for (benefit from) income taxes | 24,080 | -3,350 |
Net income (loss) | $38,202 | ($7,284) |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Comprehensive Income (Loss) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Condensed Consolidated Statements of Comprehensive Income (Loss) | ' | ' |
Net income (loss) | $38,202 | ($7,284) |
Net unrealized gains (losses) on: | ' | ' |
Investment securities on which other-than-temporary impairments were taken | -307 | -23 |
All other investment securities | 10,114 | -1,101 |
Foreign currency translation adjustments | -127 | 2,114 |
Net unrealized (gains) losses on: | ' | ' |
Investment securities on which other-than-temporary impairments were taken | 107 | 8 |
All other investment securities | -3,539 | 396 |
Other comprehensive income, net of tax, before reclassification adjustments | 6,248 | 1,394 |
Reclassification adjustments included in net income (loss): | ' | ' |
Net realized (gains) losses on investment securities | -1,848 | 77 |
Cash flow hedges | ' | -160 |
Income tax effect: | ' | ' |
Net realized gains (losses) on investment securities | 647 | -27 |
Cash flow hedges | ' | 56 |
Reclassification adjustments included in net income (loss), net of tax | -1,201 | -54 |
Other comprehensive income, net of tax | 5,047 | 1,340 |
Comprehensive income (loss) | $43,249 | ($5,944) |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Shareholders' Equity (USD $) | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings |
In Thousands, unless otherwise specified | |||||
Balance at Dec. 31, 2012 | $1,242,582 | $5,080 | $256,015 | $25,896 | $955,591 |
Common shares issued and outstanding | ' | ' | ' | ' | ' |
Capital contribution from parent | 10,500 | ' | 10,500 | ' | ' |
Change in net unrealized gains (losses): | ' | ' | ' | ' | ' |
Investment securities | -670 | ' | ' | -670 | ' |
Cash flow hedges | -104 | ' | ' | -104 | ' |
Foreign currency translation adjustments | 2,114 | ' | ' | 2,114 | ' |
Net income (loss) | -7,284 | ' | ' | ' | -7,284 |
Balance at Mar. 31, 2013 | 1,247,138 | 5,080 | 266,515 | 27,236 | 948,307 |
Balance at Dec. 31, 2013 | 1,328,141 | 5,080 | 422,015 | 28,095 | 872,951 |
Common shares issued and outstanding | ' | ' | ' | ' | ' |
Capital contribution from parent | 10,500 | ' | 10,500 | ' | ' |
Change in net unrealized gains (losses): | ' | ' | ' | ' | ' |
Investment securities | 5,174 | ' | ' | 5,174 | ' |
Foreign currency translation adjustments | -127 | ' | ' | -127 | ' |
Net income (loss) | 38,202 | ' | ' | ' | 38,202 |
Balance at Mar. 31, 2014 | $1,381,890 | $5,080 | $432,515 | $33,142 | $911,153 |
Condensed_Consolidated_Stateme3
Condensed Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Cash flows from operating activities | ' | ' |
Net income (loss) | $38,202 | ($7,284) |
Reconciling adjustments: | ' | ' |
Provision for finance receivable losses | 107,012 | 94,231 |
Depreciation and amortization | 27,033 | 21,671 |
Deferred income tax benefit | -82,607 | -14,370 |
Net gain on sales of real estate loans and related trust assets | -55,186 | ' |
Writedowns and net loss on sales of real estate owned | 1,438 | 935 |
Net loss on repurchases and repayments of debt | 6,615 | ' |
Other | -1,848 | 29 |
Cash flows due to changes in: | ' | ' |
Other assets and other liabilities | 57,699 | 41,503 |
Insurance claims and policyholder liabilities | -36 | -3,288 |
Taxes receivable and payable | 106,291 | 9,891 |
Accrued interest and finance charges | 1,047 | -8,163 |
Restricted cash | -2,958 | -1,177 |
Other, net | -43 | 307 |
Net cash provided by operating activities | 202,659 | 134,285 |
Cash flows from investing activities | ' | ' |
Finance receivables originated or purchased, net of deferred origination costs | -497,677 | -442,623 |
Principal collections on finance receivables | 628,734 | 665,677 |
Sales and principal collections on finance receivables held for sale originated as held for investment | 816,250 | ' |
Available-for-sale investment securities purchased | -90,021 | -19,429 |
Trading investment securities purchased | -9,577 | -982 |
Available-for-sale investment securities called, sold, and matured | 55,271 | 47,316 |
Trading investment securities called, sold, and matured | 776 | 1,085 |
Change in notes receivable from parent and affiliate | ' | -30,750 |
Change in restricted cash | 18 | -63,926 |
Proceeds from sale of real estate owned | 21,706 | 35,573 |
Other, net | -2,834 | -546 |
Net cash provided by investing activities | 922,646 | 191,395 |
Cash flows from financing activities | ' | ' |
Proceeds from issuance of long-term debt, net of commissions | 575,679 | 562,159 |
Repayment of long-term debt | -1,367,282 | -645,149 |
Capital contributions from parent | 10,500 | 10,500 |
Net cash used for financing activities | -781,103 | -72,490 |
Effect of exchange rate changes | -5 | -1,700 |
Increase (decrease) in cash and cash equivalents | 344,197 | 251,490 |
Cash and cash equivalents at beginning of period | 374,835 | 1,357,212 |
Cash and cash equivalents at end of period | 719,032 | 1,608,702 |
Supplemental non-cash activities | ' | ' |
Transfer of finance receivables to real estate owned | 16,629 | 24,895 |
Transfer of finance receivables held for investment to finance receivables held for sale (prior to deducting allowance for finance receivable losses) | $835,329 | ' |
Business_and_Summary_of_Signif
Business and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2014 | |
Business and Summary of Significant Accounting Policies | ' |
Business and Summary of Significant Accounting Policies | ' |
1. Business and Summary of Significant Accounting Policies | |
Springleaf Finance Corporation (“SFC” or, collectively with its subsidiaries, whether directly or indirectly owned, “the Company,” “we,” “us,” or “our”) is a wholly owned subsidiary of Springleaf Finance, Inc. (“SFI”). | |
Following a series of restructuring transactions completed on October 9, 2013, in connection with the initial public offering of common stock of Springleaf Holdings, Inc. (“SHI”), all of the common stock of SFI is owned by SHI. Therefore, all of SFC’s common stock is indirectly owned by SHI. On October 21, 2013, SHI completed the initial public offering of its common stock. At March 31, 2014, Springleaf Financial Holdings, LLC (the “Initial Stockholder”) owned approximately 75% of SHI’s common stock. The Initial Stockholder is owned primarily by a private equity fund managed by an affiliate of Fortress Investment Group LLC (“Fortress”) and AIG Capital Corporation, a subsidiary of American International Group, Inc. (“AIG”). | |
SFC is a financial services holding company with subsidiaries engaged in the consumer finance and credit insurance businesses. | |
BASIS OF PRESENTATION | |
We prepared our condensed consolidated financial statements using generally accepted accounting principles in the United States of America (“U.S. GAAP”). These statements are unaudited. The year-end condensed balance sheet data was derived from our audited financial statements, but does not include all disclosures required by U.S. GAAP. The statements include the accounts of SFC and its subsidiaries, all of which are wholly owned. | |
We eliminated all material intercompany accounts and transactions. We made judgments, estimates, and assumptions that affect amounts reported in our condensed consolidated financial statements and disclosures of contingent assets and liabilities. In management’s opinion, the condensed consolidated financial statements include the normal, recurring adjustments necessary for a fair statement of results. Ultimate results could differ from our estimates. We evaluated the effects of and the need to disclose events that occurred subsequent to the balance sheet date. These statements should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2013 (“2013 Annual Report on Form 10-K”). We follow the same significant accounting policies for our interim reporting. | |
Prior Period Revisions | |
As disclosed in our 2013 Annual Report on Form 10-K, we identified certain out-of-period errors in preparing our annual consolidated financial statements for the year ended December 31, 2013. In addition to these errors, we had previously recorded and disclosed out-of-period adjustments in prior reporting periods when the errors were discovered. As a result, we revised all previously reported periods included in our 2013 Annual Report on Form 10-K. Similarly, we have revised all previously reported periods included in this report. We corrected the errors identified in the fourth quarter of 2013 and included these corrections in the appropriate prior periods. In addition, we reversed all out-of period adjustments previously recorded and disclosed, and included the adjustments in the appropriate periods. After evaluating the quantitative and qualitative aspects of these corrections, we have determined that our previous quarterly condensed financial statements and our annual consolidated financial statements were not materially misstated. | |
See Note 17 for further information on the prior period revisions. | |
In addition, during the first quarter of 2014 we identified that the disclosure of the allowance for finance receivable losses related to our securitized finance receivables at December 31, 2013, was previously incorrectly overstated by $26.8 million. The parenthetical disclosure of the allowance of consolidated variable interest entities (“VIEs”) as of December 31, 2013 on our condensed consolidated balance sheet and the related VIE disclosures in Notes 3 and 9 have been revised in this report to $153.1 million. | |
Fortress Acquisition | |
Due to the significance of the ownership interest acquired by FCFI Acquisition LLC, an affiliate of Fortress, (the “Fortress Acquisition”), the nature of the transaction, and at the direction of our acquirer, we applied push-down accounting to SFC as an acquired business. We revalued our assets and liabilities based on their fair values at the date of the Fortress Acquisition, November 30, 2010, in accordance with business combination accounting standards (“push-down accounting”). | |
SIGNIFICANT 2014 TRANSACTIONS | |
Sale of 2009-1 Retained Certificates | |
On July 30, 2009, we completed a private securitization transaction in which a wholly owned special purpose vehicle sold $1.2 billion of certificates backed by real estate loans of the American General Mortgage Loan Trust 2009-1 (the “2009-1 Trust”). We initially retained $786.3 million of the 2009-1 Trust’s subordinate mortgage-backed certificates (the “2009-1 Retained Certificates”). | |
On March 1, 2014, the real estate loans included in the transaction were transferred from held for investment to held for sale, due to management’s intent to no longer hold these finance receivables for the foreseeable future. These loans had a carrying value of $742.0 million at the date of sale and were initially included in net finance receivables. | |
We completed the sale of the 2009-1 Retained Certificates on March 31, 2014. As a result of the sale, we deconsolidated the underlying real estate loans and previously issued securitized interests which were reported in long-term debt, as we no longer were considered the primary beneficiary. | |
Sale of Real Estate Loans | |
On March 7, 2014, we entered into an agreement to sell, subject to certain closing conditions, performing and non-performing real estate loans. As noted in our 2013 Annual Report on Form 10-K, we completed this sale on March 31, 2014. The real estate loans included in the transaction had a carrying value of $93.3 million at the date of sale. On March 1, 2014, these loans were transferred from held for investment to held for sale, due to management’s intent to no longer hold these finance receivables for the foreseeable future. | |
ACCOUNTING PRONOUNCEMENTS ADOPTED | |
Income Taxes | |
In July 2013, the Financial Accounting Standards Board (“FASB”) issued an accounting standards update (“ASU”), ASU 2013-11, Income Taxes (Topic 740), which clarifies the presentation requirements of unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists at the reporting date. The amendments in this ASU became effective prospectively for the Company for fiscal years, and interim periods within those years, beginning after December 15, 2013. The adoption of this ASU did not have a material effect on our consolidated statements of financial condition, results of operations, or cash flows. | |
ACCOUNTING PRONOUNCEMENTS TO BE ADOPTED | |
Troubled Debt Restructurings | |
In January 2014, the FASB issued ASU 2014-4, Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure, which clarifies when an in substance repossession or foreclosure occurs — that is, when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan such that the loan receivable should be derecognized and the real estate property recognized. The ASU requires a creditor to reclassify a collateralized consumer mortgage loan to real estate property upon obtaining legal title to the real estate collateral, or the borrower voluntarily conveying all interest in the real estate property to the lender to satisfy the loan through a deed in lieu of foreclosure or similar legal agreement. The ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. We are currently evaluating whether the adoption of this ASU will have a material effect on our consolidated statements of financial condition, results of operations, or cash flows. | |
ACCOUNTING POLICY ELECTIONS | |
We made certain policy elections with regard to the issuance of long-term debt related to the 2014-A securitization and have updated our long-term debt policy previously disclosed in our 2013 Annual Report on Form 10-K to reflect these elections. The updated long-term debt policy is presented below: | |
Long-term Debt | |
We generally report our long-term debt issuances at the face value of the debt instrument, which we adjust for any unaccreted discount or unamortized premium associated with the debt. We make policy elections on a security by security basis with regard to the methodology used to accrete discounts and premiums. Other than securitized products, we generally accrete discounts and premiums over the contractual life of the security using contractual payment terms. With respect to securitized products, we have historically elected to use estimated prepayment patterns adjusted for changes in estimate over the estimated life of the debt. However, in certain circumstances, including our policy election for the 2014-A securitization, we elect to amortize deferred items over the contractual life of the security. Under either treatment, such accretion is recorded to interest expense. Additionally, we generally accrete other deferred amounts (e.g. issuance costs) following the same method elected on the associated unaccreted discount or premium. |
Finance_Receivables
Finance Receivables | 3 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
Finance Receivables | ' | |||||||||||||
Finance Receivables | ' | |||||||||||||
2. Finance Receivables | ||||||||||||||
Our finance receivable types include personal loans, real estate loans, and retail sales finance as defined below: | ||||||||||||||
· Personal loans — are secured by consumer goods, automobiles, or other personal property or are unsecured, generally have maximum original terms of four years, and are usually fixed-rate, fixed-term loans. At March 31, 2014, $1.4 billion of personal loans, or 45%, were secured by collateral consisting of titled personal property (such as automobiles), $1.3 billion, or 40%, were secured by consumer household goods or other items of personal property, and the remainder was unsecured. We require credit-related property and casualty insurance, when needed, to protect our interest in the property pledged as collateral. | ||||||||||||||
· Real estate loans — are secured by first or second mortgages on residential real estate, generally have maximum original terms of 360 months, and are usually considered non-conforming. Real estate loans may be closed-end accounts or open-end home equity lines of credit and are primarily fixed-rate products. | ||||||||||||||
· Retail sales finance — includes retail sales contracts and revolving retail accounts. Retail sales contracts are closed-end accounts that represent a single purchase transaction. Revolving retail accounts are open-end accounts that can be used for financing repeated purchases from the same merchant. Retail sales contracts are secured by the personal property designated in the contract and generally have maximum original terms of 60 months. Revolving retail accounts are secured by the goods purchased and generally require minimum monthly payments based on the amount financed calculated after the most recent purchase or outstanding balances. In January 2013, we ceased purchasing retail sales contracts and revolving retail accounts. | ||||||||||||||
Components of net finance receivables by type were as follows: | ||||||||||||||
Personal | Real | Retail | ||||||||||||
(dollars in thousands) | Loans | Estate Loans | Sales Finance | Total | ||||||||||
March 31, 2014 | ||||||||||||||
Gross receivables* | $ | 3,648,089 | $ | 6,839,784 | $ | 90,156 | $ | 10,578,029 | ||||||
Unearned finance charges and points and fees | (561,750 | ) | (917 | ) | (8,636 | ) | (571,303 | ) | ||||||
Accrued finance charges | 44,273 | 34,981 | 677 | 79,931 | ||||||||||
Deferred origination costs | 38,031 | 267 | — | 38,298 | ||||||||||
Total | $ | 3,168,643 | $ | 6,874,115 | $ | 82,197 | $ | 10,124,955 | ||||||
December 31, 2013 | ||||||||||||||
Gross receivables* | $ | 3,632,462 | $ | 7,843,787 | $ | 108,457 | $ | 11,584,706 | ||||||
Unearned finance charges and points and fees | (559,902 | ) | (1,208 | ) | (10,444 | ) | (571,554 | ) | ||||||
Accrued finance charges | 48,008 | 42,163 | 898 | 91,069 | ||||||||||
Deferred origination costs | 39,364 | 274 | — | 39,638 | ||||||||||
Total | $ | 3,159,932 | $ | 7,885,016 | $ | 98,911 | $ | 11,143,859 | ||||||
* Gross receivables are defined below: | ||||||||||||||
· finance receivables purchased as a performing receivable — gross finance receivables equal the unpaid principal balance (“UPB”) for interest bearing accounts and the gross remaining contractual payments for precompute accounts plus the remaining unearned discount, net of premium established at the time of purchase to reflect the finance receivable balance at its fair value; | ||||||||||||||
· finance receivables originated subsequent to the Fortress Acquisition — gross finance receivables equal the UPB for interest bearing accounts and the gross remaining contractual payments for precompute accounts; and | ||||||||||||||
· purchased credit impaired finance receivables — gross finance receivables equal the remaining estimated cash flows less the current balance of accretable yield on the purchased credit impaired accounts. | ||||||||||||||
Included in the table above are personal loans totaling $1.8 billion at March 31, 2014 and $1.6 billion at December 31, 2013 and real estate loans totaling $4.7 billion at March 31, 2014 and $5.6 billion at December 31, 2013 associated with securitizations that remain on our balance sheet. The carrying amount of consolidated long-term debt associated with securitizations totaled $5.1 billion at March 31, 2014 and $5.2 billion at December 31, 2013. See Note 9 for further discussion regarding our securitization transactions. Also included in the table above are finance receivables totaling $1.0 billion at December 31, 2013, which were pledged as collateral for our secured term loan, which we fully repaid in March 2014. See Note 8 for further discussion of the repayment of our secured term loan. | ||||||||||||||
Unused lines of credit extended to customers by the Company were as follows: | ||||||||||||||
March 31, | December 31, | |||||||||||||
(dollars in thousands) | 2014 | 2013 | ||||||||||||
Personal loans | $ | 2,384 | $ | 4,996 | ||||||||||
Real estate loans | 30,627 | 32,338 | ||||||||||||
Total | $ | 33,011 | $ | 37,334 | ||||||||||
Unused lines of credit on our personal loans can be suspended if one of the following occurs: the value of the collateral declines significantly; we believe the borrower will be unable to fulfill the repayment obligations; or any other default by the borrower of any material obligation under the agreement. Unused lines of credit on our real estate loans can be suspended if one of the following occurs: (1) the value of the real estate declines significantly below the property’s initial appraised value; (2) we believe the borrower will be unable to fulfill the repayment obligations because of a material change in the borrower’s financial circumstances; or (3) any other default by the borrower of any material obligation under the agreement occurs. Unused lines of credit on home equity lines of credit can be terminated for delinquency. | ||||||||||||||
CREDIT QUALITY INDICATORS | ||||||||||||||
We consider the delinquency status and nonperforming status of the finance receivable as our credit quality indicators. | ||||||||||||||
We accrue finance charges on revolving retail finance receivables up to the date of charge-off at 180 days past due. We had $0.3 million of revolving retail finance receivables that were more than 90 days past due and still accruing finance charges at March 31, 2014, compared to $0.4 million at December 31, 2013. Our personal and real estate loans do not have finance receivables that were more than 90 days past due and still accruing finance charges. | ||||||||||||||
Delinquent Finance Receivables | ||||||||||||||
We consider the delinquency status of the finance receivable as our primary credit quality indicator. We monitor delinquency trends to manage our exposure to credit risk. We consider finance receivables 60 days or more past due as delinquent and consider the likelihood of collection to decrease at such time. | ||||||||||||||
The following is a summary of net finance receivables by type by days delinquent: | ||||||||||||||
Personal | Real | Retail | ||||||||||||
(dollars in thousands) | Loans | Estate Loans | Sales Finance | Total | ||||||||||
March 31, 2014 | ||||||||||||||
Net finance receivables: | ||||||||||||||
60-89 days past due | $ | 22,379 | $ | 95,196 | $ | 889 | $ | 118,464 | ||||||
90-119 days past due | 20,018 | 51,880 | 665 | 72,563 | ||||||||||
120-149 days past due | 18,789 | 46,864 | 823 | 66,476 | ||||||||||
150-179 days past due | 16,741 | 39,484 | 555 | 56,780 | ||||||||||
180 days or more past due | 1,926 | 327,272 | 234 | 329,432 | ||||||||||
Total delinquent finance receivables | 79,853 | 560,696 | 3,166 | 643,715 | ||||||||||
Current | 3,051,293 | 6,137,205 | 77,527 | 9,266,025 | ||||||||||
30-59 days past due | 37,497 | 176,214 | 1,504 | 215,215 | ||||||||||
Total | $ | 3,168,643 | $ | 6,874,115 | $ | 82,197 | $ | 10,124,955 | ||||||
December 31, 2013 | ||||||||||||||
Net finance receivables: | ||||||||||||||
60-89 days past due | $ | 28,297 | $ | 96,778 | $ | 1,290 | $ | 126,365 | ||||||
90-119 days past due | 22,648 | 67,966 | 1,017 | 91,631 | ||||||||||
120-149 days past due | 18,662 | 54,882 | 757 | 74,301 | ||||||||||
150-179 days past due | 14,618 | 45,040 | 740 | 60,398 | ||||||||||
180 days or more past due | 934 | 353,003 | 173 | 354,110 | ||||||||||
Total delinquent finance receivables | 85,159 | 617,669 | 3,977 | 706,805 | ||||||||||
Current | 3,027,460 | 7,092,107 | 92,093 | 10,211,660 | ||||||||||
30-59 days past due | 47,313 | 175,240 | 2,841 | 225,394 | ||||||||||
Total | $ | 3,159,932 | $ | 7,885,016 | $ | 98,911 | $ | 11,143,859 | ||||||
Nonperforming Finance Receivables | ||||||||||||||
We also monitor finance receivable performance trends to evaluate the potential risk of future credit losses. At 90 days or more past due, we consider our finance receivables to be nonperforming. Once the finance receivables are considered as nonperforming, we consider them to be at increased risk for credit loss. | ||||||||||||||
Our performing and nonperforming net finance receivables by type were as follows: | ||||||||||||||
Personal | Real | Retail | ||||||||||||
(dollars in thousands) | Loans | Estate Loans | Sales Finance | Total | ||||||||||
March 31, 2014 | ||||||||||||||
Performing | $ | 3,111,169 | $ | 6,408,615 | $ | 79,920 | $ | 9,599,704 | ||||||
Nonperforming | 57,474 | 465,500 | 2,277 | 525,251 | ||||||||||
Total | $ | 3,168,643 | $ | 6,874,115 | $ | 82,197 | $ | 10,124,955 | ||||||
December 31, 2013 | ||||||||||||||
Performing | $ | 3,103,070 | $ | 7,364,125 | $ | 96,224 | $ | 10,563,419 | ||||||
Nonperforming | 56,862 | 520,891 | 2,687 | 580,440 | ||||||||||
Total | $ | 3,159,932 | $ | 7,885,016 | $ | 98,911 | $ | 11,143,859 | ||||||
PURCHASED CREDIT IMPAIRED FINANCE RECEIVABLES | ||||||||||||||
As a result of the Fortress Acquisition, we applied push-down accounting and adjusted the carrying value of our finance receivables (the “FA Loans”) to their fair value on November 30, 2010. | ||||||||||||||
We include the carrying amount (which initially was the fair value) of our purchased credit impaired finance receivables in net finance receivables, less allowance for finance receivable losses. Prepayments reduce the outstanding balance, contractual cash flows, and cash flows expected to be collected. | ||||||||||||||
Information regarding these purchased credit impaired finance receivables was as follows: | ||||||||||||||
March 31, | December 31, | |||||||||||||
(dollars in thousands) | 2014 | 2013 | ||||||||||||
Carrying amount, net of allowance | $ | 1,104,919 | $ | 1,250,621 | ||||||||||
Outstanding balance | $ | 1,584,251 | $ | 1,782,271 | ||||||||||
Allowance for purchased credit impaired finance receivable losses | $ | 64,863 | $ | 57,261 | ||||||||||
The allowance for purchased credit impaired finance receivable losses at March 31, 2014 and December 31, 2013, reflected the net carrying value of these purchased credit impaired finance receivables being higher than the present value of the expected cash flows. | ||||||||||||||
Changes in accretable yield for purchased credit impaired finance receivables were as follows: | ||||||||||||||
(dollars in thousands) | ||||||||||||||
At or for the Three Months Ended March 31, | 2014 | 2013 | ||||||||||||
Balance at beginning of period | $ | 766,927 | $ | 624,879 | ||||||||||
Accretion | (28,832 | ) | (32,831 | ) | ||||||||||
Transfers to finance receivables held for sale | (56,631 | ) | — | |||||||||||
Disposals* | (5,477 | ) | (7,128 | ) | ||||||||||
Balance at end of period | $ | 675,987 | $ | 584,920 | ||||||||||
* Disposals of finance receivables represent finance charges forfeited due to purchased credit impaired finance receivables charged-off during the period. | ||||||||||||||
TROUBLED DEBT RESTRUCTURED FINANCE RECEIVABLES | ||||||||||||||
Information regarding troubled debt restructured (“TDR”) finance receivables was as follows: | ||||||||||||||
Real Estate | ||||||||||||||
(dollars in thousands) | Loans | |||||||||||||
March 31, 2014 | ||||||||||||||
TDR gross finance receivables | $ | 1,341,868 | ||||||||||||
TDR net finance receivables | $ | 1,346,901 | ||||||||||||
Allowance for TDR finance receivable losses | $ | 192,909 | ||||||||||||
December 31, 2013 | ||||||||||||||
TDR gross finance receivables | $ | 1,366,346 | ||||||||||||
TDR net finance receivables | $ | 1,371,321 | ||||||||||||
Allowance for TDR finance receivable losses | $ | 177,011 | ||||||||||||
We have no commitments to lend additional funds on our TDR finance receivables. | ||||||||||||||
TDR average net receivables and finance charges recognized on TDR finance receivables were as follows: | ||||||||||||||
(dollars in thousands) | ||||||||||||||
Three Months Ended March 31, | 2014 | 2013 | ||||||||||||
Revised | ||||||||||||||
Real Estate Loans | ||||||||||||||
TDR average net receivables | $ | 1,412,808 | $ | 905,128 | ||||||||||
TDR finance charges recognized | $ | 17,593 | $ | 14,910 | ||||||||||
Information regarding the new volume of the TDR finance receivables was as follows: | ||||||||||||||
(dollars in thousands) | ||||||||||||||
Three Months Ended March 31, | 2014 | 2013 | ||||||||||||
Revised | ||||||||||||||
Real Estate Loans | ||||||||||||||
Number of TDR accounts | 988 | 2,048 | ||||||||||||
Pre-modification TDR net finance receivables | $ | 102,371 | $ | 164,116 | ||||||||||
Post-modification TDR net finance receivables | $ | 93,361 | $ | 171,567 | ||||||||||
Net finance receivables that were modified as TDR finance receivables within the previous 12 months and for which there was a default during the period to cause TDR finance receivables to be considered nonperforming were as follows: | ||||||||||||||
(dollars in thousands) | ||||||||||||||
Three Months Ended March 31, | 2014 | 2013 | ||||||||||||
Revised | ||||||||||||||
Real Estate Loans | ||||||||||||||
Number of TDR accounts | 229 | 224 | ||||||||||||
TDR net finance receivables* | $ | 15,503 | $ | 18,250 | ||||||||||
* Represents the corresponding balance of TDR net finance receivables at the end of the month in which they defaulted. |
Allowance_for_Finance_Receivab
Allowance for Finance Receivable Losses | 3 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
Allowance for Finance Receivable Losses | ' | |||||||||||||
Allowance for Finance Receivable Losses | ' | |||||||||||||
3. Allowance for Finance Receivable Losses | ||||||||||||||
Changes in the allowance for finance receivable losses by finance receivable type were as follows: | ||||||||||||||
Personal | Real | Retail | Consolidated | |||||||||||
(dollars in thousands) | Loans | Estate Loans | Sales Finance | Total | ||||||||||
Three Months Ended March 31, 2014 | ||||||||||||||
Balance at beginning of period | $ | 94,323 | $ | 236,032 | $ | 1,840 | $ | 332,195 | ||||||
Provision for finance receivable losses (a) | 46,893 | 57,953 | 2,166 | 107,012 | ||||||||||
Charge-offs | (44,107 | ) | (27,590 | ) | (1,605 | ) | (73,302 | ) | ||||||
Recoveries (b) | 4,678 | 3,515 | 289 | 8,482 | ||||||||||
Transfers to finance receivables held for sale (c) | — | (10,084 | ) | — | (10,084 | ) | ||||||||
Balance at end of period | $ | 101,787 | $ | 259,826 | $ | 2,690 | $ | 364,303 | ||||||
Three Months Ended March 31, 2013 - Revised | ||||||||||||||
Balance at beginning of period | $ | 66,580 | $ | 113,861 | $ | 2,260 | $ | 182,701 | ||||||
Provision for finance receivable losses (a) | 25,021 | 68,820 | 390 | 94,231 | ||||||||||
Charge-offs (d) | (42,769 | ) | (34,127 | ) | (3,327 | ) | (80,223 | ) | ||||||
Recoveries | 9,088 | 2,436 | 2,327 | 13,851 | ||||||||||
Balance at end of period | $ | 57,920 | $ | 150,990 | $ | 1,650 | $ | 210,560 | ||||||
(a) Components of provision for finance receivable losses on our real estate loans were as follows: | ||||||||||||||
(dollars in thousands) | ||||||||||||||
Three Months Ended March 31, | 2014 | 2013 | ||||||||||||
Real estate loans | ||||||||||||||
Provision for finance receivable losses | ||||||||||||||
Non-credit impaired finance receivables | $ | 12,906 | $ | 19,551 | ||||||||||
Purchased credit impaired finance receivables | 19,991 | 22,022 | ||||||||||||
TDR finance receivables | 25,056 | 27,247 | ||||||||||||
Total | $ | 57,953 | $ | 68,820 | ||||||||||
(b) Recoveries during the three months ended March 31, 2014 included $2.2 million of real estate loan recoveries resulting from a sale of previously charged-off real estate loans in March 2014, net of a $0.2 million reserve for subsequent buybacks. | ||||||||||||||
(c) During the first quarter of 2014, we decreased the allowance for finance receivable losses as a result of the transfer of $835.3 million of real estate loans 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. | ||||||||||||||
(d) 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 $13.3 million of additional charge-offs in March 2013. | ||||||||||||||
Included in the allowance for finance receivable losses are allowances associated with securitizations that totaled $153.9 million at March 31, 2014 and $153.1 million at December 31, 2013. See Note 9 for further discussion regarding our securitization transactions. | ||||||||||||||
The carrying value charged-off for purchased credit impaired loans was as follows: | ||||||||||||||
(dollars in thousands) | ||||||||||||||
Three Months Ended March 31, | 2014 | 2013 | ||||||||||||
Real estate loans | ||||||||||||||
Charged off against provision for finance receivable losses: | ||||||||||||||
Purchased credit impaired finance receivables * | $ | 6,426 | $ | 9,850 | ||||||||||
* Represents 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 | Real | Retail | ||||||||||||
(dollars in thousands) | Loans | Estate Loans | Sales Finance | Total | ||||||||||
March 31, 2014 | ||||||||||||||
Allowance for finance receivable losses for finance receivables: | ||||||||||||||
Collectively evaluated for impairment | $ | 101,787 | $ | 2,054 | $ | 2,690 | $ | 106,531 | ||||||
Acquired with deteriorated credit quality (purchased credit impaired finance receivables) | — | 64,863 | — | 64,863 | ||||||||||
Individually evaluated for impairment (TDR finance receivables) | — | 192,909 | — | 192,909 | ||||||||||
Total | $ | 101,787 | $ | 259,826 | $ | 2,690 | $ | 364,303 | ||||||
Finance receivables: | ||||||||||||||
Collectively evaluated for impairment | $ | 3,168,643 | $ | 4,357,432 | $ | 82,197 | $ | 7,608,272 | ||||||
Purchased credit impaired finance receivables | — | 1,169,782 | — | 1,169,782 | ||||||||||
TDR finance receivables | — | 1,346,901 | — | 1,346,901 | ||||||||||
Total | $ | 3,168,643 | $ | 6,874,115 | $ | 82,197 | $ | 10,124,955 | ||||||
December 31, 2013 | ||||||||||||||
Allowance for finance receivable losses for finance receivables: | ||||||||||||||
Collectively evaluated for impairment | $ | 94,323 | $ | 1,760 | $ | 1,840 | $ | 97,923 | ||||||
Purchased credit impaired finance receivables | — | 57,261 | — | 57,261 | ||||||||||
TDR finance receivables | — | 177,011 | — | 177,011 | ||||||||||
Total | $ | 94,323 | $ | 236,032 | $ | 1,840 | $ | 332,195 | ||||||
Finance receivables: | ||||||||||||||
Collectively evaluated for impairment | $ | 3,159,932 | $ | 5,205,813 | $ | 98,911 | $ | 8,464,656 | ||||||
Purchased credit impaired finance receivables | — | 1,307,882 | — | 1,307,882 | ||||||||||
TDR finance receivables | — | 1,371,321 | — | 1,371,321 | ||||||||||
Total | $ | 3,159,932 | $ | 7,885,016 | $ | 98,911 | $ | 11,143,859 |
Finance_Receivables_Held_for_S
Finance Receivables Held for Sale | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Finance Receivables Held for Sale | ' | |||||||
Finance Receivables Held for Sale | ' | |||||||
4. Finance Receivables Held for Sale | ||||||||
As discussed in Note 1, on March 1, 2014, we transferred $825.2 million of real estate loans (after deducting allowance for finance receivable losses) from finance receivables held for investment to held for sale due to management’s intent to no longer hold these finance receivables for the foreseeable future. On March 31, we sold finance receivables held for sale totaling $835.3 million and related trust assets and recorded a net gain at the time of sale of $55.2 million primarily resulting from the reversal of the remaining un-accreted push-down accounting basis for these finance receivables, less allowance for finance receivable losses that we established at the date of the Fortress Acquisition. | ||||||||
We did not have any transfer activity between finance receivables held for investment to finance receivables held for sale during the first quarter of 2013. | ||||||||
We did not repurchase any loans during the three months ended March 31, 2014. We repurchased 15 loans for $2.3 million during the three months ended March 31, 2013 because these loans were reaching the defined delinquency limits or had breached the contractual representations and warranties under the loan sale agreements. At March 31, 2014, there were no unresolved recourse requests. | ||||||||
The activity in our reserve for sales recourse obligations was as follows: | ||||||||
(dollars in thousands) | ||||||||
At or for the Three Months Ended March 31, | 2014 | 2013 | ||||||
Balance at beginning of period | $ | 4,702 | $ | 4,863 | ||||
Provision for/(reduction in) recourse obligations | — | 322 | ||||||
Recourse losses | — | (386 | ) | |||||
Balance at end of period | $ | 4,702 | $ | 4,799 |
Investment_Securities
Investment Securities | 3 Months Ended | |||||||||||||||||||
Mar. 31, 2014 | ||||||||||||||||||||
Investment Securities | ' | |||||||||||||||||||
Investment Securities | ' | |||||||||||||||||||
5. Investment Securities | ||||||||||||||||||||
AVAILABLE-FOR-SALE SECURITIES | ||||||||||||||||||||
Cost/amortized cost, unrealized gains and losses, and fair value of available-for-sale securities by type were as follows: | ||||||||||||||||||||
Cost/ | ||||||||||||||||||||
Amortized | Unrealized | Unrealized | Fair | |||||||||||||||||
(dollars in thousands) | Cost | Gains | Losses | Value | ||||||||||||||||
March 31, 2014 | ||||||||||||||||||||
Fixed maturity available-for-sale securities: | ||||||||||||||||||||
Bonds: | ||||||||||||||||||||
U.S. government and government sponsored entities | $ | 60,226 | $ | 2,062 | $ | (309 | ) | $ | 61,979 | |||||||||||
Obligations of states, municipalities, and political subdivisions | 109,111 | 2,235 | (92 | ) | 111,254 | |||||||||||||||
Corporate debt | 260,654 | 9,854 | (1,491 | ) | 269,017 | |||||||||||||||
Mortgage-backed, asset-backed, and collateralized: | ||||||||||||||||||||
Residential mortgage-backed securities (“RMBS”) | 67,371 | 2,193 | (280 | ) | 69,284 | |||||||||||||||
Commercial mortgage-backed securities (“CMBS”) | 21,912 | 249 | (27 | ) | 22,134 | |||||||||||||||
Collateralized debt obligations (“CDO”)/Asset-backed securities (“ABS”) | 3,916 | 29 | — | 3,945 | ||||||||||||||||
Total | 523,190 | 16,622 | (2,199 | ) | 537,613 | |||||||||||||||
Preferred stock | 7,068 | 129 | — | 7,197 | ||||||||||||||||
Other long-term investments* | 1,395 | — | (126 | ) | 1,269 | |||||||||||||||
Common stocks | 850 | — | — | 850 | ||||||||||||||||
Total | $ | 532,503 | $ | 16,751 | $ | (2,325 | ) | $ | 546,929 | |||||||||||
December 31, 2013 | ||||||||||||||||||||
Fixed maturity available-for-sale securities: | ||||||||||||||||||||
Bonds: | ||||||||||||||||||||
U.S. government and government sponsored entities | $ | 58,748 | $ | 565 | $ | (680 | ) | $ | 58,633 | |||||||||||
Obligations of states, municipalities, and political subdivisions | 101,118 | 1,703 | (76 | ) | 102,745 | |||||||||||||||
Corporate debt | 233,977 | 6,126 | (2,187 | ) | 237,916 | |||||||||||||||
Mortgage-backed, asset-backed, and collateralized: | ||||||||||||||||||||
RMBS | 81,259 | 1,923 | (559 | ) | 82,623 | |||||||||||||||
CMBS | 7,487 | 76 | (16 | ) | 7,547 | |||||||||||||||
CDO/ABS | 3,981 | 19 | (24 | ) | 3,976 | |||||||||||||||
Total | 486,570 | 10,412 | (3,542 | ) | 493,440 | |||||||||||||||
Preferred stock | 7,844 | — | (39 | ) | 7,805 | |||||||||||||||
Other long-term investments* | 1,394 | — | (125 | ) | 1,269 | |||||||||||||||
Common stocks | 850 | — | — | 850 | ||||||||||||||||
Total | $ | 496,658 | $ | 10,412 | $ | (3,706 | ) | $ | 503,364 | |||||||||||
* Excludes interest in a limited partnership that we account for using the equity method ($0.6 million at March 31, 2014 and December 31, 2013). | ||||||||||||||||||||
As of March 31, 2014 and December 31, 2013, we had no available-for-sale securities with other-than-temporary impairments recognized in accumulated other comprehensive income or loss. | ||||||||||||||||||||
Fair value and unrealized losses on investment securities by type and length of time in a continuous unrealized loss position were as follows: | ||||||||||||||||||||
Less Than 12 Months | 12 Months or Longer | Total | ||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | |||||||||||||||
(dollars in thousands) | Value | Losses | Value | Losses | Value | Losses | ||||||||||||||
March 31, 2014 | ||||||||||||||||||||
Bonds: | ||||||||||||||||||||
U.S. government and government sponsored entities | $ | 23,619 | $ | (309 | ) | $ | — | $ | — | $ | 23,619 | $ | (309 | ) | ||||||
Obligations of states, municipalities, and political subdivisions | 20,246 | (92 | ) | — | — | 20,246 | (92 | ) | ||||||||||||
Corporate debt | 40,754 | (1,068 | ) | 6,365 | (423 | ) | 47,119 | (1,491 | ) | |||||||||||
RMBS | 4,929 | (280 | ) | — | — | 4,929 | (280 | ) | ||||||||||||
CMBS | 5,210 | (27 | ) | — | — | 5,210 | (27 | ) | ||||||||||||
Total | 94,758 | (1,776 | ) | 6,365 | (423 | ) | 101,123 | (2,199 | ) | |||||||||||
Other long-term investments | — | — | 1,269 | (126 | ) | 1,269 | (126 | ) | ||||||||||||
Total | $ | 94,758 | $ | (1,776 | ) | $ | 7,634 | $ | (549 | ) | $ | 102,392 | $ | (2,325 | ) | |||||
December 31, 2013 | ||||||||||||||||||||
Bonds: | ||||||||||||||||||||
U.S. government and government sponsored entities | $ | 44,314 | $ | (680 | ) | $ | — | $ | — | $ | 44,314 | $ | (680 | ) | ||||||
Obligations of states, municipalities, and political subdivisions | 14,220 | (76 | ) | — | — | 14,220 | (76 | ) | ||||||||||||
Corporate debt | 65,809 | (1,535 | ) | 11,772 | (652 | ) | 77,581 | (2,187 | ) | |||||||||||
RMBS | 18,288 | (559 | ) | — | — | 18,288 | (559 | ) | ||||||||||||
CMBS | 2,993 | (16 | ) | — | — | 2,993 | (16 | ) | ||||||||||||
CDO/ABS | 2,658 | (24 | ) | — | — | 2,658 | (24 | ) | ||||||||||||
Total | 148,282 | (2,890 | ) | 11,772 | (652 | ) | 160,054 | (3,542 | ) | |||||||||||
Preferred stock | 7,805 | (39 | ) | — | — | 7,805 | (39 | ) | ||||||||||||
Other long-term investments | 1,269 | (125 | ) | — | — | 1,269 | (125 | ) | ||||||||||||
Total | $ | 157,356 | $ | (3,054 | ) | $ | 11,772 | $ | (652 | ) | $ | 169,128 | $ | (3,706 | ) | |||||
We continue to monitor unrealized loss positions for potential impairments. During the three months ended March 31, 2014, we did not recognize any other-than-temporary impairment credit loss write-downs to investment revenues. During the three months ended March 31, 2013, we recognized other-than-temporary impairment credit loss write-downs to investment revenues on RMBS totaling $26 thousand. | ||||||||||||||||||||
Changes in the cumulative amount of credit losses (recognized in earnings) on other-than-temporarily impaired available-for-sale securities were as follows: | ||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
At or for the Three Months Ended March 31, | 2014 | 2013 | ||||||||||||||||||
Balance at beginning of period | $ | 1,523 | $ | 1,650 | ||||||||||||||||
Additions: | ||||||||||||||||||||
Due to other-than-temporary impairments: | ||||||||||||||||||||
Impairment previously recognized | — | 26 | ||||||||||||||||||
Reductions: | ||||||||||||||||||||
Realized due to dispositions with no prior intention to sell | (205 | ) | — | |||||||||||||||||
Balance at end of period | $ | 1,318 | $ | 1,676 | ||||||||||||||||
The fair values of available-for-sale securities sold or redeemed and the resulting realized gains, realized losses, and net realized gains (losses) were as follows: | ||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
Three Months Ended March 31, | 2014 | 2013 | ||||||||||||||||||
Revised | ||||||||||||||||||||
Fair value | $ | 50,820 | $ | 34,206 | ||||||||||||||||
Realized gains | $ | 1,984 | $ | 119 | ||||||||||||||||
Realized losses | (151 | ) | (170 | ) | ||||||||||||||||
Net realized gains (losses) | $ | 1,833 | $ | (51 | ) | |||||||||||||||
Contractual maturities of fixed-maturity available-for-sale securities at March 31, 2014 were as follows: | ||||||||||||||||||||
(dollars in thousands) | Fair | Amortized | ||||||||||||||||||
March 31, 2014 | Value | Cost | ||||||||||||||||||
Fixed maturities, excluding mortgage-backed securities: | ||||||||||||||||||||
Due in 1 year or less | $ | 7,075 | $ | 7,053 | ||||||||||||||||
Due after 1 year through 5 years | 159,690 | 155,975 | ||||||||||||||||||
Due after 5 years through 10 years | 123,122 | 121,744 | ||||||||||||||||||
Due after 10 years | 152,363 | 145,219 | ||||||||||||||||||
Mortgage-backed securities | 95,363 | 93,199 | ||||||||||||||||||
Total | $ | 537,613 | $ | 523,190 | ||||||||||||||||
Actual maturities may differ from contractual maturities since borrowers may have the right to call or prepay obligations. We may sell investment securities before maturity to achieve corporate requirements and investment strategies. | ||||||||||||||||||||
TRADING SECURITIES | ||||||||||||||||||||
The fair value of trading securities by type was as follows: | ||||||||||||||||||||
March 31, | December 31, | |||||||||||||||||||
(dollars in thousands) | 2014 | 2013 | ||||||||||||||||||
Fixed maturity trading securities: | ||||||||||||||||||||
Bonds: | ||||||||||||||||||||
Corporate debt | $ | 1,758 | $ | 1,837 | ||||||||||||||||
Mortgage-backed, asset-backed, and collateralized: | ||||||||||||||||||||
RMBS | 10,251 | 10,671 | ||||||||||||||||||
CMBS | 39,788 | 29,897 | ||||||||||||||||||
CDO/ABS | 9,138 | 9,249 | ||||||||||||||||||
Total | $ | 60,935 | $ | 51,654 | ||||||||||||||||
The net unrealized and realized gains on our trading securities were as follows: | ||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
Three Months Ended March 31, | 2014 | 2013 | ||||||||||||||||||
Revised | ||||||||||||||||||||
Net unrealized gains on trading securities held at period end | $ | — | $ | 959 | ||||||||||||||||
Net realized gains on trading securities sold or redeemed | 15 | 48 | ||||||||||||||||||
Total | $ | 15 | $ | 1,007 |
Transactions_with_Affiliates_o
Transactions with Affiliates of Fortress or AIG (Affiliates of Fortress or AIG) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Affiliates of Fortress or AIG | ' | |||||||
Transactions with Affiliates of Fortress or AIG | ' | |||||||
Transactions with Affiliates of Fortress or AIG | ' | |||||||
6. Transactions with Affiliates of Fortress or AIG | ||||||||
SUBSERVICING AND REFINANCE AGREEMENTS | ||||||||
Nationstar Mortgage LLC (“Nationstar”) subservices the real estate loans of MorEquity, Inc. (“MorEquity”), our wholly owned subsidiary, and two other subsidiaries (collectively, the “Owners”), including certain securitized real estate loans. Investment funds managed by affiliates of Fortress indirectly own a majority interest in Nationstar. | ||||||||
The Owners paid Nationstar fees for its subservicing and to facilitate the repayment of our real estate loans through refinancings with other lenders as follows: | ||||||||
(dollars in thousands) | ||||||||
Three Months Ended March 31, | 2014 | 2013 | ||||||
Subservicing fees | $ | 2,008 | $ | 2,372 | ||||
Refinancing concessions | $ | — | $ | 253 | ||||
INVESTMENT MANAGEMENT AGREEMENT | ||||||||
Logan Circle Partners, L.P. (“Logan Circle”) provides investment management services for our investments. Logan Circle is a wholly owned subsidiary of Fortress. Costs and fees incurred for these investment management services totaled $0.2 million for the three months ended March 31, 2014, compared to $0.3 million for the three months ended March 31, 2013. | ||||||||
REINSURANCE AGREEMENTS | ||||||||
Merit Life Insurance Co. (“Merit”), our wholly owned subsidiary, enters into reinsurance agreements with subsidiaries of AIG, for reinsurance of various group annuity, credit life, and credit accident and health insurance where Merit reinsures the risk of loss. The reserves for this business fluctuate over time and, in some instances, are subject to recapture by the insurer. Reserves recorded by Merit for reinsurance agreements with subsidiaries of AIG totaled $45.1 million at March 31, 2014 and $45.6 million at December 31, 2013. | ||||||||
SALE OF 2009-1 RETAINED CERTIFICATES | ||||||||
In February 2014, Third Street Funding LLC, an affiliate of SFC and the owner of the 2009-1 Retained Certificates, offered the Certificates for sale in a competitive auction. On March 6, 2014, Merrill Lynch, Pierce, Fenner and Smith Incorporated (“MLPFS”) was declared the winning bidder and we entered into an agreement to sell, subject to certain closing conditions, all of our interest in the 2009-1 Retained Certificates to MLPFS for a price of $738.0 million. Concurrently, New Residential Investment Corp. and MLPFS entered into an agreement pursuant to which New Residential Investment Corp. agreed to purchase approximately 75% of the 2009-1 Retained Certificates. As of March 31, 2014, New Residential Investment Corp. was managed by an affiliate of Fortress. See Note 1 for further information on this sale. |
Related_Party_Transactions
Related Party Transactions (Related Parties other than Affiliates of Fortress or AIG) | 3 Months Ended |
Mar. 31, 2014 | |
Related Parties other than Affiliates of Fortress or AIG | ' |
Related Party Transactions | ' |
Related Party Transactions | ' |
7. Related Party Transactions | |
AFFILIATE LENDING | |
Note Receivable from Parent | |
SFC’s note receivable from parent is payable in full on May 31, 2022, and SFC may demand payment at any time prior to May 31, 2022; however, SFC does not anticipate the need for additional liquidity during 2014 and does not expect to demand payment from SFI in 2014. The note receivable from parent totaled $168.0 million at March 31, 2014 and December 31, 2013. Interest receivable on this note totaled $0.5 million at March 31, 2014 and December 31, 2013. The interest rate for the unpaid principal balance is the prime rate. Interest revenue on the note receivable from SFI totaled $1.3 million for the three months ended March 31, 2014 and $4.3 million for the three months ended March 31, 2013. | |
Receivables from Parent and Affiliates | |
At March 31, 2014 and December 31, 2013, receivables from our parent and affiliates totaled $45.5 million and $39.4 million, respectively, primarily due to a receivable from Second Street Funding Corporation, a subsidiary of SFI, for income taxes payable under current and prior tax sharing agreements, which were paid by SFC. In addition, Cash Services, Inc. (“CSI”), a subsidiary of SFC, had a receivable related to cash payments due from SpringCastle Holdings, LLC of $17.3 million at March 31, 2014 and $16.4 million at December 31, 2013. The receivables from our parent and affiliates also include interest receivable on SFC’s note receivable from SFI discussed above. | |
Intercompany Demand Note | |
Pursuant to an intercompany demand note dated July 26, 2013 between SFC and SFI, SFI may borrow up to $50.0 million from SFC. The note is payable in full on December 14, 2014, and is prepayable in whole or in part at any time without premium or penalty. The annual interest rate for the principal balance is 7.00%. SFI expects to use advances under the note, if any, for general corporate purposes. At March 31, 2014 and December 31, 2013, SFI had not drawn any funds under this note. | |
Payable to Parent | |
At March 31, 2014 and December 31, 2013, payable to parent totaled $34.8 million and $22.0 million, respectively, primarily due to payments made by SFI for the benefit of SFC. | |
Payable to SpringCastle Holdings, LLC | |
CSI collects cash payments for all entities. At March 31, 2014 and December 31, 2013, CSI’s payable to SpringCastle Holdings, LLC totaled $8.7 million and $6.8 million, respectively. | |
CASH COLLATERAL | |
In February 2013, SFI paid $3.1 million, on behalf of Financial Services of South Carolina, Inc. (“SFSSC”), a subsidiary of SFC, towards the payment of unclaimed funds to South Carolina charities in connection with a judgment entered against SFSSC in 2012. In late March 2013, SFSSC fully repaid SFI for the cash collateral, including $27.8 million cash collateral posted by SFI on behalf of SFSSC in 2012. In addition, SFSSC paid SFI $0.6 million of fees under a related fee agreement during the first quarter of 2013. | |
CAPITAL CONTRIBUTIONS | |
On each of January 11, 2013, July 10, 2013, and January 10, 2014, SFC received capital contributions from SFI of $10.5 million to satisfy interest payments required by SFC’s debenture due in January 2013, July 2013, and January 2014, respectively. | |
DERIVATIVES | |
During the three months ended March 31, 2013, SFC paid SFI $1.0 million of collateral and guarantee fees relating to $40.0 million cash collateral posted by SFI as security for SFC’s remaining Euro swap position with AIGFP. On August 5, 2013, we terminated our remaining cross currency interest rate swap agreement and AIGFP returned the cash collateral of $40.0 million to SFI. | |
INTERCOMPANY AGREEMENTS | |
On December 24, 2012, Springleaf General Services Corporation (“SGSC”), a subsidiary of SFI, entered into the following intercompany agreements with Springleaf Finance Management Corporation (“SFMC”), a subsidiary of SFC, and with certain other subsidiaries of SFI (collectively, the “Recipients”): | |
Services Agreement | |
SGSC provides the following services to the Recipients: management and administrative services; financial, accounting, treasury, tax, and audit services; facilities support services; capital funding services; legal services; human resources services (including payroll); centralized collections and lending support services; insurance, risk management, and marketing services; and information technology services. The fees payable by each Recipient to SGSC is equal to 100% of the allocated cost of providing the services to such Recipient. SGSC allocates its cost of providing these services among the Recipients and any of the companies to which it provides similar services based on an allocation method defined in the agreement. SFMC recorded $45.4 million of service fee expenses, which are included in other operating expenses for the three months ended March 31, 2014 and $32.8 million for the three months ended March 31, 2013. Services fees payable to SGSC totaled $14.1 million at March 31, 2014 and $9.4 million at December 31, 2013. | |
License Agreement | |
The agreement provides for use by SGSC of SFMC’s information technology systems and software and other related equipment. The monthly license fee payable by SGSC for its use of the information technology systems and software is 100% of the actual costs incurred by SFMC plus a 7.00% margin. The fee payable by SGSC for its use of the related equipment is 100% of the actual costs incurred by SFMC. SFMC recorded $1.4 million of license fees, which are included as a contra expense to other operating expenses for the three months ended March 31, 2014 and $1.5 million for the three months ended March 31, 2013. | |
Building Lease | |
The agreement provides that SFMC will lease six of its buildings to SGSC for an annual rental amount of $3.7 million, plus additional rental amounts to cover other sums and charges, including real estate taxes, water charges, and sewer rents. SFMC recorded $0.9 million of rent charged to SGSC, which is included as a contra expense to other operating expenses for the three months ended March 31, 2014 and $1.0 million for the three months ended March 31, 2013. |
Longterm_Debt
Long-term Debt | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Long-term Debt | ' | ||||||||||||||||
Long-term Debt | ' | ||||||||||||||||
8. Long-term Debt | |||||||||||||||||
Principal maturities of long-term debt (excluding projected securitization repayments by period) by type of debt at March 31, 2014 were as follows: | |||||||||||||||||
Medium | Junior | ||||||||||||||||
Retail | Term | Subordinated | |||||||||||||||
(dollars in thousands) | Notes | Notes | Securitizations | Debt | Total | ||||||||||||
Interest rates (a) | 5.40%-7.50% | 5.40%-8.25% | 1.27%-6.00% | 6 | % | ||||||||||||
Second quarter 2014 | $ | 10,887 | $ | — | $ | — | $ | — | $ | 10,887 | |||||||
Third quarter 2014 | 8,564 | — | — | — | 8,564 | ||||||||||||
Fourth quarter 2014 | 335,486 | — | — | — | 335,486 | ||||||||||||
First quarter 2015 | 16,575 | — | — | — | 16,575 | ||||||||||||
Remainder of 2015 | 30,679 | 750,000 | — | — | 780,679 | ||||||||||||
2016 | — | 375,000 | — | — | 375,000 | ||||||||||||
2017 | — | 2,360,837 | — | — | 2,360,837 | ||||||||||||
2018 | — | — | — | — | — | ||||||||||||
2019-2067 | — | 1,250,000 | — | 350,000 | 1,600,000 | ||||||||||||
Securitizations (b) | — | — | 5,079,298 | — | 5,079,298 | ||||||||||||
Total principal maturities | $ | 402,191 | $ | 4,735,837 | $ | 5,079,298 | $ | 350,000 | $ | 10,567,326 | |||||||
Total carrying amount | $ | 389,601 | $ | 4,187,231 | $ | 5,061,864 | (c) | $ | 171,595 | $ | 9,810,291 | ||||||
(a) The interest rates shown are the range of contractual rates in effect at March 31, 2014. | |||||||||||||||||
(b) Securitizations are not included in above maturities by period due to their variable monthly repayments. See Note 9 for further information on our long-term debt associated with securitizations. | |||||||||||||||||
(c) The net carrying amount of our long-term debt associated with certain securitizations that were either 1) issued at a premium or discount or 2) revalued at a premium or discount based on its fair value at the time of the Fortress Acquisition. | |||||||||||||||||
GUARANTY AGREEMENTS | |||||||||||||||||
On December 30, 2013, SHI entered into Guaranty Agreements whereby it agreed to fully and unconditionally guarantee the payment of principal of, premium (if any), and interest on approximately $5.2 billion aggregate principal amount of senior notes on a senior basis and $350.0 million aggregate principal amount of a junior subordinated debenture (collectively, the “notes”) on a junior subordinated basis issued by SFC. The notes consist of the following: 8.250% Senior Notes due 2023; 7.750% Senior Notes due 2021; 6.00% Senior Notes due 2020; a 60-year junior subordinated debenture; and all senior notes outstanding on December 30, 2013, issued pursuant to the Indenture dated as of May 1, 1999 (the “1999 Indenture”), between SFC and Wilmington Trust, National Association (the successor trustee to Citibank N.A.). As of December 30, 2013, approximately $3.9 billion aggregate principal amount of senior notes were outstanding under the 1999 Indenture. The 60-year junior subordinated debenture underlies the trust preferred securities sold by a trust sponsored by SFC. On December 30, 2013, SHI entered into a Trust Guaranty Agreement whereby it agreed to fully and unconditionally guarantee the related payment obligations under the trust preferred securities. | |||||||||||||||||
REPURCHASE OR REPAYMENT OF DEBT | |||||||||||||||||
In connection with our liability management efforts, we or our affiliates from time to time have purchased, or may in the future purchase, portions of our outstanding indebtedness. Any such purchases may be made through open market or privately negotiated transactions with third parties or pursuant to one or more tender or exchange offers or otherwise, upon such terms and at such prices, as well as with such consideration as we or any such affiliates may determine. Our plans are dynamic and we may adjust our plans in response to changes in our expectations and changes in market conditions. | |||||||||||||||||
On March 31, 2014, Springleaf Financial Funding Company (“SFFC”) prepaid, without penalty or premium, the entire $750.0 million outstanding principal balance of the secured term loan, plus accrued and unpaid interest. Effective upon the prepayment, all obligations of SFFC, SFC, and most of the consumer finance operating subsidiaries of SFC under the secured term loan (other than contingent reimbursement obligations and indemnity obligations) were terminated and all guarantees and security interests were released. |
Variable_Interest_Entities
Variable Interest Entities | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Variable Interest Entities | ' | |||||||
Variable Interest Entities | ' | |||||||
9. Variable Interest Entities | ||||||||
As part of our overall funding strategy and as part of our efforts to support our liquidity from sources other than our traditional capital market sources, we have transferred certain finance receivables to VIEs for securitization transactions. Since these transactions involve securitization trusts required to be consolidated, the securitized assets and related liabilities are included in our condensed consolidated financial statements and are accounted for as secured borrowings. | ||||||||
CONSOLIDATED VIES | ||||||||
We evaluated the securitization trusts and determined that these entities are VIEs of which we are the primary beneficiary; therefore, we consolidate such entities. We are deemed to be the primary beneficiaries of these VIEs because we have the ability to direct the activities of each VIE that most significantly impact the entity’s economic performance and the obligation to absorb losses and the right to receive benefits that are potentially significant to the VIE. Such ability stems from SFC’s and/or its affiliates’ contractual right to service the securitized finance receivables. In instances where servicing is performed by parties other than SFC or its affiliates, this ability arises from SFC’s or its affiliates’ prescription of detailed servicing standards and procedures that the servicer must observe (and which can be modified only with our consent), and from our mandatory involvement in certain loan workouts and disposals of defaulted loans or related collateral. Our retained subordinated notes and residual interest trust certificates expose us to potentially significant losses and potentially significant returns. | ||||||||
The asset-backed and mortgage-backed securities issued by the securitization trusts are supported by the expected cash flows from the underlying securitized finance receivables. Cash inflows from these finance receivables are distributed to investors and service providers in accordance with each transaction’s contractual priority of payments (“waterfall”) and, as such, most of these inflows must be directed first to service and repay each trust’s senior notes or certificates held principally by third-party investors. After these senior obligations are extinguished, substantially all cash inflows will be directed to the subordinated notes until fully repaid and, thereafter, to the residual interest that we own in each trust. We retain interests in these securitization transactions, including senior and subordinated securities issued by the VIEs and residual interests. We retain credit risk in the securitizations because our retained interests include the most subordinated interest in the securitized assets, which are the first to absorb credit losses on the securitized assets. We expect that any credit losses in the pools of securitized assets will likely be limited to our subordinated and residual retained interests. We have no obligation to repurchase or replace qualified securitized assets that subsequently become delinquent or are otherwise in default. | ||||||||
The carrying amounts of consolidated VIE assets and liabilities associated with our securitization trusts were as follows: | ||||||||
March 31, | December 31, | |||||||
(dollars in thousands) | 2014 | 2013 | ||||||
Assets | ||||||||
Finance receivables: | ||||||||
Personal loans | $ | 1,758,946 | $ | 1,572,070 | ||||
Real estate loans | 4,718,033 | 5,595,150 | ||||||
Allowance for finance receivable losses | 153,873 | 153,084 | ||||||
Restricted cash | 327,846 | 345,906 | ||||||
Liabilities | ||||||||
Long-term debt | $ | 5,061,864 | $ | 5,160,227 | ||||
2014 Consumer Loan Securitization | ||||||||
On March 26, 2014, we completed a private securitization transaction in which a wholly owned special purpose vehicle of SFC sold $559.3 million of notes backed by personal loans held by Springleaf Funding Trust 2014-A (the “2014-A Trust”), at a 2.62% weighted average yield. We sold the asset-backed notes for $559.2 million, after the price discount but before expenses and a $6.4 million interest reserve requirement. We initially retained $32.9 million of the 2014-A Trust’s subordinate asset-backed notes. | ||||||||
Sales of Previously Retained Notes | ||||||||
As discussed in Note 1, the Company’s remaining beneficial interests in the 2009-1 Trust were sold through an unaffiliated initial purchaser on March 31, 2014. As a result of the sale, we deconsolidated the underlying real estate loans and previously issued securitized interests which were reported in long-term debt, as we no longer were considered the primary beneficiary. | ||||||||
During the three months ended March 31, 2013, we did not sell any previously retained mortgage-backed or asset-backed notes. | ||||||||
Repayment of 2013-BAC Trust Notes | ||||||||
On September 25, 2013, we completed a private securitization transaction in which Springleaf Funding Trust 2013-BAC, a wholly owned special purpose vehicle of SFC, issued $500 million of notes backed by an amortizing pool of personal loans acquired from subsidiaries of SFC. On March 27, 2014, we repaid the entire $231.3 million outstanding principal balance of the notes, plus accrued and unpaid interest. | ||||||||
VIE Interest Expense | ||||||||
Other than our retained subordinate and residual interests in the consolidated securitization trusts, we are under no obligation, either contractually or implicitly, to provide financial support to these entities. Consolidated interest expense related to these VIEs three months ended March 31, 2014 and 2013 totaled $43.1 million and $28.5 million, respectively. | ||||||||
UNCONSOLIDATED VIE | ||||||||
We have established a VIE that holds the junior subordinated debt. We are not the primary beneficiary, and we do not have a variable interest in this VIE. Therefore, we do not consolidate such entity. We had no off-balance sheet exposure to loss associated with this VIE at March 31, 2014 or December 31, 2013. |
Derivative_Financial_Instrumen
Derivative Financial Instruments | 3 Months Ended | ||||
Mar. 31, 2014 | |||||
Derivative Financial Instruments | ' | ||||
Derivative Financial Instruments | ' | ||||
10. Derivative Financial Instruments | |||||
During the three months ended March 31, 2014, SFC did not have any derivative activity. However, SFC has used derivative financial instruments in managing the cost of its debt and its return on finance receivables held for sale, but was neither a dealer nor a trader in derivative financial instruments. | |||||
In January 2013, we reclassified $0.2 million of deferred net gain from accumulated other comprehensive income or loss to interest expense related to SFC’s election to discontinue and terminate one of its cash flow hedges in 2012. On August 5, 2013, SFC terminated its remaining cross currency interest rate swap agreement with AIG Financial Products Corp., a subsidiary of AIG, and recorded a loss of $1.9 million in other revenues — other. Immediately following this termination, we had no derivative financial instruments. | |||||
For the three months ended March 31, 2013, we recognized $4.2 million of net gains on SFC’s non-designated hedging instruments in other revenues — other. | |||||
Derivative adjustments included in other revenues — other consisted of the following: | |||||
(dollars in thousands) | |||||
Three Months Ended March 31, | 2013 | ||||
Mark to market losses | $ | (16,875 | ) | ||
Net interest income | 3,598 | ||||
Credit valuation adjustment gains | 40 | ||||
Total | $ | (13,237 | ) | ||
SFC was exposed to credit risk if counterparties to its swap agreement did not perform. SFC regularly monitored counterparty credit ratings throughout the term of the agreement. SFC’s exposure to market risk was limited to changes in the value of its swap agreement offset by changes in the value of the hedged debt. While SFC’s cross currency interest rate swap agreement mitigated economic exposure of related debt, it did not qualify as a cash flow or fair value hedge under U.S. GAAP. |
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Income | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Accumulated Other Comprehensive Income | ' | ||||||||||||||||
Accumulated Other Comprehensive Income | ' | ||||||||||||||||
11. Accumulated Other Comprehensive Income | |||||||||||||||||
Changes in accumulated other comprehensive income were as follows: | |||||||||||||||||
Total | |||||||||||||||||
Accumulated | |||||||||||||||||
Unrealized | Unrealized | Retirement | Foreign | Other | |||||||||||||
Gains (Losses) | Gains (Losses) | Plan | Currency | Comprehensive | |||||||||||||
Investment | Cash Flow | Liabilities | Translation | Income | |||||||||||||
(dollars in thousands) | Securities | Hedges | Adjustments | Adjustments | (Loss) | ||||||||||||
Three Months Ended March 31, 2014 | |||||||||||||||||
Balance at beginning of period | $ | 4,362 | $ | — | $ | 20,153 | $ | 3,580 | $ | 28,095 | |||||||
Other comprehensive income (loss) before reclassifications | 6,375 | — | — | (127 | ) | 6,248 | |||||||||||
Reclassification adjustments from accumulated other comprehensive income | (1,201 | ) | — | — | — | (1,201 | ) | ||||||||||
Balance at end of period | $ | 9,536 | $ | — | $ | 20,153 | $ | 3,453 | $ | 33,142 | |||||||
Three Months Ended March 31, 2013 - Revised | |||||||||||||||||
Balance at beginning of period | $ | 13,545 | $ | 104 | $ | 8,120 | $ | 4,127 | $ | 25,896 | |||||||
Other comprehensive income (loss) before reclassifications | (720 | ) | — | — | 2,114 | 1,394 | |||||||||||
Reclassification adjustments from accumulated other comprehensive income | 50 | (104 | ) | — | — | (54 | ) | ||||||||||
Balance at end of period | $ | 12,875 | $ | — | $ | 8,120 | $ | 6,241 | $ | 27,236 | |||||||
Reclassification adjustments from accumulated other comprehensive income to the applicable line item on our condensed consolidated statements of operations were as follows: | |||||||||||||||||
(dollars in thousands) | |||||||||||||||||
Three Months Ended March 31, | 2014 | 2013 | |||||||||||||||
Revised | |||||||||||||||||
Unrealized gains (losses) on investment securites: | |||||||||||||||||
Reclassification from accumulated other comprehensive income (loss) to investment revenues, before taxes | $ | 1,848 | $ | (77 | ) | ||||||||||||
Income tax effect | (647 | ) | 27 | ||||||||||||||
Reclassification from accumulated other comprehensive income (loss) to investment revenues, net of taxes | 1,201 | (50 | ) | ||||||||||||||
Unrealized gains on cash flow hedges: | |||||||||||||||||
Reclassification from accumulated other comprehensive income (loss) to interest expense, before taxes | — | 160 | |||||||||||||||
Income tax effect | — | (56 | ) | ||||||||||||||
Reclassification from accumulated other comprehensive income (loss) to interest expense and other revenues, net of taxes | — | 104 | |||||||||||||||
Total | $ | 1,201 | $ | 54 |
Income_Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2014 | |
Income Taxes | ' |
Income Taxes | ' |
12. Income Taxes | |
At March 31, 2014, we had a net deferred tax liability of $62.1 million, compared to $141.9 million at December 31, 2013. The decrease in the net deferred tax liability was primarily due to the deconsolidation of the 2009-1 securitization during the first quarter of 2014. We had a valuation allowance on our gross state deferred tax assets, net of a deferred federal tax benefit of $24.9 million, compared to $23.8 million at December 31, 2013. We also had a valuation allowance against our United Kingdom and Puerto Rico operations of $21.7 million at March 31, 2014 and $21.4 million at December 31, 2013. The impact to our uncertain tax positions was immaterial. | |
The effective tax rate for the three months ended March 31, 2014 was 38.7% compared to 31.5% for the same period in 2013. The effective tax rate for the three months ended March 31, 2014 differed from the federal statutory rate primarily due to the effect of our state income taxes, which increased the effective tax rate by 2.7%. The effective tax rate for the three months ended March 31, 2013 differed from the federal statutory rate primarily due to the effect of the state income taxes. |
Contingencies
Contingencies | 3 Months Ended |
Mar. 31, 2014 | |
Contingencies | ' |
Contingencies | ' |
13. Contingencies | |
LEGAL CONTINGENCIES | |
In the normal course of business, the Company has been named, from time to time, as a defendant in various legal actions, including arbitrations, class actions and other litigation arising in connection with its activities. Some of the actual or threatened legal actions include claims for substantial compensatory and/or punitive damages or claims for indeterminate amounts of damages. While we will continue to identify certain legal actions where we believe a material loss to be reasonably possible and reasonably estimable, there can be no assurance that material losses will not be incurred from claims that we have not yet been notified of or are not yet determined to be probable or reasonably possible and reasonably estimable. | |
We contest liability and/or the amount of damages, as appropriate, in each pending matter. Where available information indicates that it is probable that a liability had been incurred at the date of the condensed consolidated financial statements and we can reasonably estimate the amount of that loss, we accrue the estimated loss by a charge to income. In many actions, however, it is inherently difficult to determine whether any loss is probable or even reasonably possible or to estimate the amount of any loss. In addition, even where loss is reasonably possible or an exposure to loss exists in excess of the liability already accrued with respect to a previously recognized loss contingency, it is not always possible to reasonably estimate the size of the possible loss or range of loss. | |
For certain legal actions, we cannot reasonably estimate such losses, particularly for actions that are in their early stages of development or where plaintiffs seek substantial or indeterminate damages. Numerous issues may need to be resolved, including through potentially lengthy discovery and determination of important factual matters, and by addressing novel or unsettled legal questions relevant to the actions in question, before a loss or additional loss or range of loss or additional loss can be reasonably estimated for any given action. | |
For certain other legal actions, we can estimate reasonably possible losses, additional losses, ranges of loss or ranges of additional loss in excess of amounts accrued, but do not believe, based on current knowledge and after consultation with counsel, that such losses will have a material adverse effect on our condensed consolidated financial statements as a whole. | |
PAYMENT PROTECTION INSURANCE | |
Our United Kingdom subsidiary provides payments of compensation to its customers who have made claims concerning Payment Protection Insurance (“PPI”) policies sold in the normal course of business by insurance intermediaries. On April 20, 2011, the High Court in the United Kingdom handed down judgment supporting the Financial Services Authority (now known as the Financial Conduct Authority) (“FCA”) guidelines on the treatment of PPI complaints. In addition, the FCA issued a guidance consultation paper in March 2012 on the PPI customer contact letters. As a result, we have concluded that there are certain circumstances where customer contact and/or redress is appropriate; therefore, this activity is ongoing. The total reserves related to the estimated PPI claims were $27.8 million at March 31, 2014 and $33.5 million at December 31, 2013. |
Benefit_Plans
Benefit Plans | 3 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
Benefit Plans | ' | |||||||||||||
Benefit Plans | ' | |||||||||||||
14. Benefit Plans | ||||||||||||||
PENSION AND POSTRETIREMENT PLANS | ||||||||||||||
Effective December 31, 2012, the Springleaf Financial Services Retirement Plan (the “Retirement Plan”) and the CommoLoCo Retirement Plan (a defined benefit pension plan for our employees in Puerto Rico) were frozen. Our current and former employees will not lose any vested benefits in the Retirement Plan or the CommoLoCo Retirement Plan that accrued prior to January 1, 2013. | ||||||||||||||
The following table presents the components of net periodic benefit cost with respect to our defined benefit pension plans and other postretirement benefit plans: | ||||||||||||||
(dollars in thousands) | Pension | Postretirement | ||||||||||||
Three Months Ended March 31, | 2014 | 2013 | 2014 | 2013 | ||||||||||
Components of net periodic benefit cost: | ||||||||||||||
Service cost | $ | — | $ | — | $ | 22 | $ | 81 | ||||||
Interest cost | 3,818 | 3,590 | 26 | 64 | ||||||||||
Expected return on assets | (4,109 | ) | (3,874 | ) | — | — | ||||||||
Amortization of net loss (gain) | 1 | 12 | (67 | ) | — | |||||||||
Net periodic benefit cost | $ | (290 | ) | $ | (272 | ) | $ | (19 | ) | $ | 145 |
ShareBased_Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 31, 2014 | |
Share-Based Compensation | ' |
Share-Based Compensation | ' |
15. Share-Based Compensation | |
Total share-based compensation expense, net of forfeitures, for all stock-based awards and amounts allocated under our intercompany service agreements was $1.3 million during the three months ended March 31, 2014. We did not record any share-based compensation expense during the three months ended March 31, 2013. |
Segment_Information
Segment Information | 3 Months Ended | |||||||||||||||||||
Mar. 31, 2014 | ||||||||||||||||||||
Segment Information | ' | |||||||||||||||||||
Segment Information | ' | |||||||||||||||||||
16. Segment Information | ||||||||||||||||||||
Our segments coincide with how our businesses are managed. At March 31, 2014, our three segments include: Consumer, Insurance, and Real Estate. | ||||||||||||||||||||
Management considers Consumer and Insurance as our “Core Consumer Operations” and Real Estate as our “Non-Core Portfolio.” | ||||||||||||||||||||
Our segments are managed as follows: | ||||||||||||||||||||
Core Consumer Operations | ||||||||||||||||||||
· Consumer — We originate and service personal loans (secured and unsecured) in 26 states, which are our core operating states. | ||||||||||||||||||||
· Insurance — We offer credit insurance (life insurance, accident and health insurance, and involuntary unemployment insurance), non-credit insurance, and ancillary products, such as warranty protection. | ||||||||||||||||||||
Non-Core Portfolio | ||||||||||||||||||||
· Real Estate — We service and hold real estate loans secured by first or second mortgages on residential real estate. Real estate loans previously originated through our branch offices are either serviced by our branch personnel or by our centralized servicing operation. Real estate loans previously acquired or originated through centralized distribution channels are serviced by one of our wholly owned subsidiaries, MorEquity, all of which are subserviced by Nationstar, except for certain securitized real estate loans, which were serviced and subserviced by third parties prior to the sale of these real estate loans on March 31, 2014. Investment funds managed by affiliates of Fortress indirectly own a majority interest in Nationstar. | ||||||||||||||||||||
The remaining components (which we refer to as “Other”) consist of our other non-core, non-originating legacy operations, which are isolated by geographic market and/or distribution channel from our Core Consumer Operations and our Non-Core Portfolio. These operations include our legacy operations in 14 states where we have also ceased branch-based personal lending, our liquidating retail sales finance portfolio (including our retail sales finance accounts from our dedicated auto finance operation), our lending operations in Puerto Rico and the U.S. Virgin Islands, and the operations of our United Kingdom subsidiary. | ||||||||||||||||||||
Due to the nature of the Fortress Acquisition, we applied push-down accounting. However, we report the operating results of our Core Consumer Operations, Non-Core Portfolio, and Other using the same accounting basis that we employed prior to the Fortress Acquisition, which we refer to as “historical accounting basis,” to provide a consistent basis for both management and other interested third parties to better understand the operating results of these segments. The historical accounting basis (which is a basis of accounting other than U.S. GAAP) also provides better comparability of the operating results of these segments to our competitors and other companies in the financial services industry. | ||||||||||||||||||||
The “Push-down Accounting Adjustments” column in the following tables primarily consists of: | ||||||||||||||||||||
· the accretion or amortization of the valuation adjustments on the applicable revalued assets and liabilities; | ||||||||||||||||||||
· the difference in finance charges on our purchased credit impaired finance receivables compared to the finance charges on these finance receivables on a historical accounting basis; | ||||||||||||||||||||
· the elimination of accretion or amortization of historical based discounts, premiums, and other deferred costs on our finance receivables and long-term debt; | ||||||||||||||||||||
· the difference in provision required based upon the differences in historical accounting basis and push-down accounting basis of the finance receivables; | ||||||||||||||||||||
· the acceleration of the accretion of the net discount or amortization of the net premium applied to long-term debt that we repurchase or repay; | ||||||||||||||||||||
· the reversal of the remaining un-accreted push-down accounting basis for net finance receivables, less allowance for finance receivable losses established at the date of the Fortress Acquisition on finance receivables held for sale that we sold; and | ||||||||||||||||||||
· the difference in the fair value of long-term debt based upon the differences between historical accounting basis where certain long-term debt components are marked-to-market on a recurring basis, and push-down accounting basis where long-term debt is no longer marked-to-market on a recurring basis. | ||||||||||||||||||||
The following tables present information about the Company’s segments as well as reconciliations to the condensed consolidated financial statement amounts. | ||||||||||||||||||||
Push-down | ||||||||||||||||||||
Accounting | Consolidated | |||||||||||||||||||
(dollars in thousands) | Consumer | Insurance | Real Estate | Other | Adjustments | Total | ||||||||||||||
At or for the Three Months Ended March 31, 2014 | ||||||||||||||||||||
Interest income | $ | 208,946 | $ | — | $ | 153,245 | $ | 5,104 | $ | 35,274 | $ | 402,569 | ||||||||
Interest expense | 40,622 | — | 110,348 | 2,148 | 28,628 | 181,746 | ||||||||||||||
Net interest income | 168,324 | — | 42,897 | 2,956 | 6,646 | 220,823 | ||||||||||||||
Provision for finance receivable losses | 44,932 | — | 61,374 | 964 | (258 | ) | 107,012 | |||||||||||||
Net interest income after provision for finance receivable losses | 123,392 | — | (18,477 | ) | 1,992 | 6,904 | 113,811 | |||||||||||||
Other revenues: | ||||||||||||||||||||
Insurance | — | 38,384 | — | 38 | (3 | ) | 38,419 | |||||||||||||
Investment | — | 10,267 | — | — | (836 | ) | 9,431 | |||||||||||||
Intersegment - insurance commissions | 12,289 | (12,347 | ) | 70 | (12 | ) | — | — | ||||||||||||
Net gain (loss) on repurchases and repayments of debt | (1,426 | ) | — | (10,025 | ) | (48 | ) | 4,884 | (6,615 | ) | ||||||||||
Net gain (loss) on fair value adjustments on debt | — | — | 8,298 | — | (8,298 | ) | — | |||||||||||||
Net gain (loss) on sales of real estate loans and related trust assets | — | — | (62,176 | ) | — | 117,362 | 55,186 | |||||||||||||
Other | 580 | 1,641 | (1,179 | ) | 1,992 | — | 3,034 | |||||||||||||
Total other revenues | 11,443 | 37,945 | (65,012 | ) | 1,970 | 113,109 | 99,455 | |||||||||||||
Other expenses: | ||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||
Salaries and benefits | 65,479 | 4,554 | 8,526 | 3,671 | (44 | ) | 82,186 | |||||||||||||
Other operating expenses | 31,577 | 3,225 | 12,955 | 1,681 | 995 | 50,433 | ||||||||||||||
Insurance losses and loss adjustment expenses | — | 18,611 | — | — | (246 | ) | 18,365 | |||||||||||||
Total other expenses | 97,056 | 26,390 | 21,481 | 5,352 | 705 | 150,984 | ||||||||||||||
Income (loss) before provison for (benefit from) income taxes | $ | 37,779 | $ | 11,555 | $ | (104,970 | ) | $ | (1,390 | ) | $ | 119,308 | $ | 62,282 | ||||||
Assets | $ | 3,205,636 | $ | 967,627 | $ | 7,258,737 | $ | 1,008,735 | $ | (433,878 | ) | $ | 12,006,857 | |||||||
Push-down | ||||||||||||||||||||
Accounting | Consolidated | |||||||||||||||||||
(dollars in thousands) | Consumer | Insurance | Real Estate | Other | Adjustments | Total | ||||||||||||||
At or for the Three Months Ended March 31, 2013 - Revised | ||||||||||||||||||||
Interest income | $ | 160,483 | $ | — | $ | 184,956 | $ | 15,344 | $ | 47,734 | $ | 408,517 | ||||||||
Interest expense | 36,951 | — | 152,688 | 4,860 | 35,807 | 230,306 | ||||||||||||||
Net interest income | 123,532 | — | 32,268 | 10,484 | 11,927 | 178,211 | ||||||||||||||
Provision for finance receivable losses | 19,961 | — | 72,248 | 993 | 1,029 | 94,231 | ||||||||||||||
Net interest income after provision for finance receivable losses | 103,571 | — | (39,980 | ) | 9,491 | 10,898 | 83,980 | |||||||||||||
Other revenues: | ||||||||||||||||||||
Insurance | — | 32,892 | — | 20 | (12 | ) | 32,900 | |||||||||||||
Investment | — | 10,385 | — | — | (1,547 | ) | 8,838 | |||||||||||||
Intersegment - insurance commissions | 10,843 | (10,836 | ) | 28 | (35 | ) | — | — | ||||||||||||
Net gain (loss) on fair value adjustments on debt | — | — | 14,964 | — | (14,964 | ) | — | |||||||||||||
Other | 423 | 1,793 | (1,100 | ) | 4,427 | (281 | ) | 5,262 | ||||||||||||
Total other revenues | 11,266 | 34,234 | 13,892 | 4,412 | (16,804 | ) | 47,000 | |||||||||||||
Other expenses: | ||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||
Salaries and benefits | 60,053 | 2,925 | 6,497 | 8,476 | (53 | ) | 77,898 | |||||||||||||
Other operating expenses | 29,145 | 2,340 | 14,729 | 1,592 | 1,156 | 48,962 | ||||||||||||||
Insurance losses and loss adjustment expenses | — | 14,968 | — | — | (214 | ) | 14,754 | |||||||||||||
Total other expenses | 89,198 | 20,233 | 21,226 | 10,068 | 889 | 141,614 | ||||||||||||||
Income (loss) before benefit from income taxes | $ | 25,639 | $ | 14,001 | $ | (47,314 | ) | $ | 3,835 | $ | (6,795 | ) | $ | (10,634 | ) | |||||
Assets | $ | 2,579,000 | $ | 1,013,908 | $ | 9,364,481 | $ | 2,380,616 | $ | (742,543 | ) | $ | 14,595,462 |
Prior_Period_Revisions
Prior Period Revisions | 3 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
Prior Period Revisions | ' | |||||||||||||
Prior Period Revisions | ' | |||||||||||||
17. Prior Period Revisions | ||||||||||||||
As disclosed in our 2013 Annual Report on Form 10-K, we identified certain out-of-period errors in preparing our annual consolidated financial statements for the year ended December 31, 2013. In addition to these errors, we had previously recorded and disclosed out-of-period adjustments in prior reporting periods when the errors were discovered. As a result, we revised all previously reported periods included in our 2013 Annual Report on Form 10-K. Similarly, we have revised all previously reported periods included in this report. We corrected the errors identified in the fourth quarter of 2013 and included these corrections in the appropriate prior periods. In addition, we reversed all out-of period adjustments previously recorded and disclosed, and included the adjustments in the appropriate periods. After evaluating the quantitative and qualitative aspects of these corrections, we have determined that our previous quarterly condensed financial statements and our annual consolidated financial statements were not materially misstated. | ||||||||||||||
The errors identified in the fourth quarter of 2013 related to the following: (1) the accretion of net discount applied to long-term debt that was revalued based on its fair value at the time of the Fortress Acquisition; (2) the accretion of original issue net discount on our long-term debt issued subsequent to the Fortress Acquisition; (3) the classification of certain investment securities found to contain embedded derivatives and the accounting treatment of the related change in fair value; and (4) the continued accretion of discounts on loans in non-accrual status. | ||||||||||||||
In addition, we made other corrections during the fourth quarter of 2013, which were isolated to intra-periods in 2013, and revised the appropriate periods of 2013 in our 2013 Annual Report on Form 10-K and in this report. These revisions related to charge-offs on certain qualified real estate loans that had not been granted principal forgiveness. | ||||||||||||||
We also recorded the previously disclosed out-of-period adjustments in the appropriate periods. These adjustments primarily related to the following: | ||||||||||||||
· capitalized interest on purchased credit impaired finance receivables serviced by a third party; | ||||||||||||||
· the difference between the hypothetical derivative interest expense and the contractual derivative interest expense; | ||||||||||||||
· the identification of certain bankrupt real estate loan accounts for consideration as TDR finance receivables; | ||||||||||||||
· to correct certain inputs in our model supporting the TDR allowance for finance receivable losses; | ||||||||||||||
· distributions of limited partnerships; | ||||||||||||||
· the calculations of the carrying value for our real estate owned and the net loss on sales of our real estate owned that are externally serviced; | ||||||||||||||
· the calculation of real estate owned expenses; | ||||||||||||||
· payable to former parent related to any refund of (or credit for) taxes, including any interest received; | ||||||||||||||
· benefit reserves related to a closed block of annuities; | ||||||||||||||
· change in estimate for the taxable income related to mortgage securitizations; and | ||||||||||||||
· the correction of current and deferred tax expense. | ||||||||||||||
In addition to the revisions previously discussed, during the fourth quarter of 2013 we identified presentation errors in the classification of certain line items within our consolidated statement of cash flows and revised the appropriate line items in our 2013 Annual Report on Form 10-K and in this report. These errors related to the following: | ||||||||||||||
· the income tax effect on the changes in accumulated other comprehensive income related to retirement plan liabilities and net unrealized gains and losses on investment securities and cash flow hedges were incorrectly included in “Change in other assets and other liabilities” instead of “Change in taxes receivable and payable” within the same operating activities section; | ||||||||||||||
· certain debt issue costs were incorrectly included in “Change in other assets and other liabilities” within the operating activities section instead of “Proceeds from issuance of long-term debt, net of commissions” within the financing activities section; | ||||||||||||||
· the foreign exchange impact on debt that either matured or was repaid in 2011 was incorrectly included in “Change in other assets and other liabilities” within the operating activities section instead of netting this impact with the related derivative in “Repayments of long-term debt” within the financing activities section; | ||||||||||||||
· accrued interest and finance charges on real estate loan modifications were incorrectly included in “Principal collections on finance receivables” within the investing activities section instead of “Change in accrued interest and finance charges” within the operating activities section; and | ||||||||||||||
· “Deferral of finance receivable origination costs” was incorrectly included within the operating activities section instead of the investing activities section. | ||||||||||||||
Revised Condensed Consolidated Statement of Operations (Unaudited) | ||||||||||||||
The following table reconciles the amounts previously reported in our condensed consolidated statement of operations to the corresponding revised amounts. The “Out-of-Period” column reflects the previously disclosed out-of period adjustments that are now being corrected in the appropriate periods. The “Adjustments” column reflects the corrections of the errors discovered during the fourth quarter of 2013. | ||||||||||||||
Three Months Ended | ||||||||||||||
March 31, 2013 (Unaudited) | ||||||||||||||
(dollars in thousands) | As Reported | Out-of-Period | Adjustments | As Revised | ||||||||||
Interest income | $ | 409,797 | $ | — | $ | (1,280 | ) | $ | 408,517 | |||||
Interest expense | 227,101 | — | 3,205 | 230,306 | ||||||||||
Net interest income | 182,696 | — | (4,485 | ) | 178,211 | |||||||||
Provision for finance receivable losses | 96,085 | (1,323 | ) | (531 | ) | 94,231 | ||||||||
Net interest income after provision for finance receivable losses | 86,611 | 1,323 | (3,954 | ) | 83,980 | |||||||||
Other revenues: | ||||||||||||||
Insurance | 32,900 | — | — | 32,900 | ||||||||||
Investment | 7,880 | — | 958 | 8,838 | ||||||||||
Other | 5,262 | — | — | 5,262 | ||||||||||
Total other revenues | 46,042 | — | 958 | 47,000 | ||||||||||
Other expenses: | ||||||||||||||
Operating expenses: | ||||||||||||||
Salaries and benefits | 77,898 | — | — | 77,898 | ||||||||||
Other operating expenses | 48,962 | — | — | 48,962 | ||||||||||
Insurance losses and loss adjustment expenses | 14,754 | — | — | 14,754 | ||||||||||
Total other expenses | 141,614 | — | — | 141,614 | ||||||||||
Loss before benefit from income taxes | (8,961 | ) | 1,323 | (2,996 | ) | (10,634 | ) | |||||||
Benefit from income taxes | (1,546 | ) | (696 | ) | (1,108 | ) | (3,350 | ) | ||||||
Net loss | $ | (7,415 | ) | $ | 2,019 | $ | (1,888 | ) | $ | (7,284 | ) | |||
Revised Condensed Consolidated Statement of Comprehensive Loss (Unaudited) | ||||||||||||||
The following table presents the amounts previously reported in our condensed consolidated statement of comprehensive loss and the corresponding revised amounts. | ||||||||||||||
Three Months Ended | ||||||||||||||
March 31, 2013 | ||||||||||||||
(Unaudited) | ||||||||||||||
(dollars in thousands) | As Reported | As Revised | ||||||||||||
Net loss | $ | (7,415 | ) | $ | (7,284 | ) | ||||||||
Other comprehensive income: | ||||||||||||||
Net unrealized losses on: | ||||||||||||||
Investment securities on which other-than-temporary impairments were taken | (23 | ) | (23 | ) | ||||||||||
All other investment securities | (94 | ) | (1,101 | ) | ||||||||||
Foreign currency translation adjustments | 2,114 | 2,114 | ||||||||||||
Income tax effect: | ||||||||||||||
Net unrealized losses on: | ||||||||||||||
Investment securities on which other-than-temporary impairments were taken | 8 | 8 | ||||||||||||
All other investment securities | 33 | 396 | ||||||||||||
Other comprehensive income, net of tax, before reclassification adjustments | 2,038 | 1,394 | ||||||||||||
Reclassification adjustments included in net loss: | ||||||||||||||
Net realized losses on investment securities | 29 | 77 | ||||||||||||
Cash flow hedges | (160 | ) | (160 | ) | ||||||||||
Income tax effect: | ||||||||||||||
Net realized losses on investment securities | (10 | ) | (27 | ) | ||||||||||
Cash flow hedges | 56 | 56 | ||||||||||||
Reclassification adjustments included in net loss, net of tax | (85 | ) | (54 | ) | ||||||||||
Other comprehensive income, net of tax | 1,953 | 1,340 | ||||||||||||
Comprehensive loss | $ | (5,462 | ) | $ | (5,944 | ) | ||||||||
Revised Condensed Consolidated Statement of Cash Flows (Unaudited) | ||||||||||||||
The following table presents the amounts previously reported in our condensed consolidated statement of cash flows and the corresponding revised amounts and includes additional corrections to the classification of certain line items within our condensed consolidated statement of cash flows. | ||||||||||||||
Three Months Ended | ||||||||||||||
March 31, 2013 (Unaudited) | ||||||||||||||
(dollars in thousands) | As Reported | As Revised | ||||||||||||
Cash flows from operating activities | ||||||||||||||
Net loss | $ | (7,415 | ) | $ | (7,284 | ) | ||||||||
Reconciling adjustments: | ||||||||||||||
Provision for finance receivable losses | 96,085 | 94,231 | ||||||||||||
Depreciation and amortization | 17,185 | 21,671 | ||||||||||||
Deferral of finance receivable origination costs | (12,006 | ) | — | |||||||||||
Deferred income tax benefit | (32,408 | ) | (14,370 | ) | ||||||||||
Writedowns and net loss on sales of real estate owned | 935 | 935 | ||||||||||||
Other | 29 | 29 | ||||||||||||
Cash flows due to changes in: | ||||||||||||||
Other assets and other liabilities | 40,140 | 41,503 | ||||||||||||
Insurance claims and policyholder liabilities | (3,288 | ) | (3,288 | ) | ||||||||||
Taxes receivable and payable | 29,650 | 9,891 | ||||||||||||
Accrued interest and finance charges | 4,722 | (8,163 | ) | |||||||||||
Restricted cash | (1,177 | ) | (1,177 | ) | ||||||||||
Other, net | 304 | 307 | ||||||||||||
Net cash provided by operating activities | 132,756 | 134,285 | ||||||||||||
Cash flows from investing activities | ||||||||||||||
Finance receivables originated or purchased, net of deferred origination costs | (430,617 | ) | (442,623 | ) | ||||||||||
Principal collections on finance receivables | 652,792 | 665,677 | ||||||||||||
Available-for-sale investment securities purchased | (20,411 | ) | (19,429 | ) | ||||||||||
Trading investment securities purchased | — | (982 | ) | |||||||||||
Available-for-sale investment securities called, sold, and matured | 48,401 | 47,316 | ||||||||||||
Trading investment securities called, sold, and matured | — | 1,085 | ||||||||||||
Change in notes receivable from parent and affiliate | (30,750 | ) | (30,750 | ) | ||||||||||
Change in restricted cash | (63,926 | ) | (63,926 | ) | ||||||||||
Proceeds from sale of real estate owned | 35,573 | 35,573 | ||||||||||||
Other, net | (546 | ) | (546 | ) | ||||||||||
Net cash provided by investing activities | 190,516 | 191,395 | ||||||||||||
Cash flows from financing activities | ||||||||||||||
Proceeds from issuance of long-term debt, net of commissions | 564,567 | 562,159 | ||||||||||||
Repayment of long-term debt | (645,149 | ) | (645,149 | ) | ||||||||||
Capital contributions from parent | 10,500 | 10,500 | ||||||||||||
Net cash used for financing activities | (70,082 | ) | (72,490 | ) | ||||||||||
Effect of exchange rate changes | (1,700 | ) | (1,700 | ) | ||||||||||
Net change in cash and cash equivalents | 251,490 | 251,490 | ||||||||||||
Cash and cash equivalents at beginning of period | 1,357,212 | 1,357,212 | ||||||||||||
Cash and cash equivalents at end of period | $ | 1,608,702 | $ | 1,608,702 |
Fair_Value_Measurements
Fair Value Measurements | 3 Months Ended | ||||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||||
Fair Value Measurements | ' | ||||||||||||||||||||||
Fair Value Measurements | ' | ||||||||||||||||||||||
18. Fair Value Measurements | |||||||||||||||||||||||
The fair value of a financial instrument is the amount that would be received if an asset were to be sold or the amount that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. The degree of judgment used in measuring the fair value of financial instruments generally correlates with the level of pricing observability. Financial instruments with quoted prices in active markets generally have more pricing observability and less judgment is used in measuring fair value. Conversely, financial instruments traded in other-than-active markets or that do not have quoted prices have less observability and are measured at fair value using valuation models or other pricing techniques that require more judgment. An other-than-active market is one in which there are few transactions, the prices are not current, price quotations vary substantially either over time or among market makers, or little information is released publicly for the asset or liability being valued. Pricing observability is affected by a number of factors, including the type of financial instrument, whether the financial instrument is listed on an exchange or traded over-the-counter or is new to the market and not yet established, the characteristics specific to the transaction, and general market conditions. | |||||||||||||||||||||||
The following table summarizes the fair values and carrying values of our financial instruments and indicates the fair value hierarchy based on the level of inputs we utilized to determine such fair values: | |||||||||||||||||||||||
Total | Total | ||||||||||||||||||||||
Fair Value Measurements Using | Fair | Carrying | |||||||||||||||||||||
(dollars in thousands) | Level 1 | Level 2 | Level 3 | Value | Value | ||||||||||||||||||
March 31, 2014 | |||||||||||||||||||||||
Assets | |||||||||||||||||||||||
Cash and cash equivalents | $ | 719,032 | $ | — | $ | — | $ | 719,032 | $ | 719,032 | |||||||||||||
Investment securities | — | 587,708 | 20,752 | 608,460 | 608,460 | ||||||||||||||||||
Net finance receivables, less allowance for finance receivable losses | — | — | 10,331,405 | 10,331,405 | 9,760,652 | ||||||||||||||||||
Note receivable from parent | — | 167,989 | — | 167,989 | 167,989 | ||||||||||||||||||
Restricted cash | 341,480 | — | — | 341,480 | 341,480 | ||||||||||||||||||
Other assets: | |||||||||||||||||||||||
Commercial mortgage loans | — | — | 94,573 | 94,573 | 101,403 | ||||||||||||||||||
Escrow advance receivable | — | — | 21,191 | 21,191 | 21,191 | ||||||||||||||||||
Receivable from parent and affiliates | — | 40,120 | — | 40,120 | 40,120 | ||||||||||||||||||
Liabilities | |||||||||||||||||||||||
Long-term debt | $ | — | $ | 10,942,078 | $ | — | $ | 10,942,078 | $ | 9,810,291 | |||||||||||||
Payable to parent and affiliates | — | 43,206 | — | 43,206 | 43,206 | ||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||
Assets | |||||||||||||||||||||||
Cash and cash equivalents | $ | 374,835 | $ | — | $ | — | $ | 374,835 | $ | 374,835 | |||||||||||||
Investment securities | — | 531,997 | 23,617 | 555,614 | 555,614 | ||||||||||||||||||
Net finance receivables, less allowance for finance receivable losses | — | — | 11,113,980 | 11,113,980 | 10,811,664 | ||||||||||||||||||
Note receivable from parent | — | 167,989 | — | 167,989 | 167,989 | ||||||||||||||||||
Restricted cash | 358,759 | — | — | 358,759 | 358,759 | ||||||||||||||||||
Other assets: | |||||||||||||||||||||||
Commercial mortgage loans | — | — | 94,681 | 94,681 | 102,200 | ||||||||||||||||||
Escrow advance receivable | — | — | 23,527 | 23,527 | 23,527 | ||||||||||||||||||
Receivable from parent and affiliates | — | 39,364 | — | 39,364 | 39,364 | ||||||||||||||||||
Liabilities | |||||||||||||||||||||||
Long-term debt | $ | — | $ | 11,776,576 | $ | — | $ | 11,776,576 | $ | 10,640,728 | |||||||||||||
Payable to parent and affiliates | — | 38,463 | — | 38,463 | 38,463 | ||||||||||||||||||
FAIR VALUE MEASUREMENTS — RECURRING BASIS | |||||||||||||||||||||||
The following table presents information about our assets and liabilities measured at fair value on a recurring basis and indicates the fair value hierarchy based on the levels of inputs we utilized to determine such fair value: | |||||||||||||||||||||||
Fair Value Measurements Using | Total Carried | ||||||||||||||||||||||
(dollars in thousands) | Level 1 | Level 2 | Level 3 | At Fair Value | |||||||||||||||||||
March 31, 2014 | |||||||||||||||||||||||
Assets | |||||||||||||||||||||||
Cash and cash equivalents in mutual funds | $ | 153,565 | $ | — | $ | — | $ | 153,565 | |||||||||||||||
Investment securities: | |||||||||||||||||||||||
Available-for-sale securities: | |||||||||||||||||||||||
Bonds: | |||||||||||||||||||||||
U.S. government and government sponsored entities | — | 61,979 | — | 61,979 | |||||||||||||||||||
Obligations of states, municipalities, and political subdivisions | — | 111,254 | — | 111,254 | |||||||||||||||||||
Corporate debt | — | 260,363 | 8,654 | 269,017 | |||||||||||||||||||
RMBS | — | 69,203 | 81 | 69,284 | |||||||||||||||||||
CMBS | — | 22,127 | 7 | 22,134 | |||||||||||||||||||
CDO/ABS | — | 3,145 | 800 | 3,945 | |||||||||||||||||||
Total | — | 528,071 | 9,542 | 537,613 | |||||||||||||||||||
Preferred stock | — | 7,197 | — | 7,197 | |||||||||||||||||||
Other long-term investments (a) | — | — | 1,269 | 1,269 | |||||||||||||||||||
Total available-for-sale securities (b) | — | 535,268 | 10,811 | 546,079 | |||||||||||||||||||
Trading securities: | |||||||||||||||||||||||
Bonds: | |||||||||||||||||||||||
Corporate debt | — | 1,758 | — | 1,758 | |||||||||||||||||||
RMBS | — | 9,032 | 1,219 | 10,251 | |||||||||||||||||||
CMBS | — | 39,788 | — | 39,788 | |||||||||||||||||||
CDO/ABS | — | 1,862 | 7,276 | 9,138 | |||||||||||||||||||
Total trading securities | — | 52,440 | 8,495 | 60,935 | |||||||||||||||||||
Total investment securities | — | 587,708 | 19,306 | 607,014 | |||||||||||||||||||
Restricted cash in mutual funds | 315,306 | — | — | 315,306 | |||||||||||||||||||
Total | $ | 468,871 | $ | 587,708 | $ | 19,306 | $ | 1,075,885 | |||||||||||||||
December 31, 2013 | |||||||||||||||||||||||
Assets | |||||||||||||||||||||||
Cash and cash equivalents in mutual funds | $ | 185,829 | $ | — | $ | — | $ | 185,829 | |||||||||||||||
Investment securities: | |||||||||||||||||||||||
Available-for-sale securities: | |||||||||||||||||||||||
Bonds: | |||||||||||||||||||||||
U.S. government and government sponsored entities | — | 58,633 | — | 58,633 | |||||||||||||||||||
Obligations of states, municipalities, and political subdivisions | — | 102,745 | — | 102,745 | |||||||||||||||||||
Corporate debt | — | 225,312 | 12,604 | 237,916 | |||||||||||||||||||
RMBS | — | 82,510 | 113 | 82,623 | |||||||||||||||||||
CMBS | — | 7,545 | 2 | 7,547 | |||||||||||||||||||
CDO/ABS | — | 3,176 | 800 | 3,976 | |||||||||||||||||||
Total | — | 479,921 | 13,519 | 493,440 | |||||||||||||||||||
Preferred stock | — | 7,805 | — | 7,805 | |||||||||||||||||||
Other long-term investments (a) | — | — | 1,269 | 1,269 | |||||||||||||||||||
Total available-for-sale securities (b) | — | 487,726 | 14,788 | 502,514 | |||||||||||||||||||
Trading securities: | |||||||||||||||||||||||
Bonds: | |||||||||||||||||||||||
Corporate debt | — | 1,837 | — | 1,837 | |||||||||||||||||||
RMBS | — | 10,671 | — | 10,671 | |||||||||||||||||||
CMBS | — | 29,897 | — | 29,897 | |||||||||||||||||||
CDO/ABS | — | 1,866 | 7,383 | 9,249 | |||||||||||||||||||
Total trading securities | — | 44,271 | 7,383 | 51,654 | |||||||||||||||||||
Total investment securities | — | 531,997 | 22,171 | 554,168 | |||||||||||||||||||
Restricted cash in mutual funds | 321,617 | — | — | 321,617 | |||||||||||||||||||
Total | $ | 507,446 | $ | 531,997 | $ | 22,171 | $ | 1,061,614 | |||||||||||||||
(a) Other long-term investments excludes our interest in a limited partnership of $0.6 million at March 31, 2014 and December 31, 2013 that we account for using the equity method. | |||||||||||||||||||||||
(b) Common stocks not carried at fair value totaled $0.9 million at March 31, 2014 and December 31, 2013 and therefore have been excluded from the table above. | |||||||||||||||||||||||
We had no transfers between Level 1 and Level 2 during the three months ended March 31, 2014. | |||||||||||||||||||||||
The following table presents changes for the three months ended March 31, 2014 in Level 3 assets and liabilities measured at fair value on a recurring basis: | |||||||||||||||||||||||
Net gains (losses) included in: | Purchases, | ||||||||||||||||||||||
sales, | |||||||||||||||||||||||
Balance at | Other | issues, | Transfers | Transfers | Balance | ||||||||||||||||||
beginning | Other | comprehensive | settlements | into | out of | at end of | |||||||||||||||||
(dollars in thousands) | of period | revenues | income (loss) | (a) | Level 3 (b) | Level 3 | period | ||||||||||||||||
Three Months Ended March 31, 2014 | |||||||||||||||||||||||
Investment securities: | |||||||||||||||||||||||
Available-for-sale securities: | |||||||||||||||||||||||
Bonds: | |||||||||||||||||||||||
Corporate debt | $ | 12,604 | $ | 254 | $ | (311 | ) | $ | (3,893 | ) | $ | — | $ | — | $ | 8,654 | |||||||
RMBS | 113 | (7 | ) | (25 | ) | — | — | — | 81 | ||||||||||||||
CMBS | 2 | — | 5 | — | — | — | 7 | ||||||||||||||||
CDO/ABS | 800 | — | — | — | — | — | 800 | ||||||||||||||||
Total | 13,519 | 247 | (331 | ) | (3,893 | ) | — | — | 9,542 | ||||||||||||||
Other long-term investments | 1,269 | — | — | — | — | — | 1,269 | ||||||||||||||||
Total available-for-sale securities | 14,788 | 247 | (331 | ) | (3,893 | ) | — | — | 10,811 | ||||||||||||||
Trading securities: | |||||||||||||||||||||||
Bonds: | |||||||||||||||||||||||
RMBS | — | 14 | — | (36 | ) | 1,241 | — | 1,219 | |||||||||||||||
CDO/ABS | 7,383 | 8 | — | (115 | ) | 7,276 | |||||||||||||||||
Total trading securities | 7,383 | 22 | — | (151 | ) | 1,241 | — | 8,495 | |||||||||||||||
Total | $ | 22,171 | $ | 269 | $ | (331 | ) | $ | (4,044 | ) | $ | 1,241 | $ | — | $ | 19,306 | |||||||
(a) “Purchases, sales, issues, and settlements” column only consist of settlements. There were no purchases, sales, or issues of investment securities for the three months ended March 31, 2014. | |||||||||||||||||||||||
(b) During the three months ended March 31, 2014, we transferred $1.2 million of RMBS securities into Level 3 primarily due to lesser pricing transparency resulting in using broker pricing, whereas vendor pricing had previously been used. | |||||||||||||||||||||||
The following table presents changes for the three months ended March 31, 2013 in Level 3 assets and liabilities measured at fair value on a recurring basis: | |||||||||||||||||||||||
Purchases, | |||||||||||||||||||||||
Net gains (losses) included in: | sales, | ||||||||||||||||||||||
Balance at | Other | issues, | Transfers | Transfers | Balance | ||||||||||||||||||
beginning | Other | comprehensive | settlements | into | out of | at end of | |||||||||||||||||
(dollars in thousands) | of period | revenues | income (loss) | * | Level 3 | Level 3 | period | ||||||||||||||||
Three Months Ended March 31, 2013 - Revised | |||||||||||||||||||||||
Investment securities: | |||||||||||||||||||||||
Available-for-sale securities: | |||||||||||||||||||||||
Bonds: | |||||||||||||||||||||||
Corporate debt | $ | 13,417 | $ | (168 | ) | $ | 509 | $ | 119 | $ | — | $ | — | $ | 13,877 | ||||||||
RMBS | 74 | (34 | ) | 25 | — | — | — | 65 | |||||||||||||||
CMBS | 153 | (8 | ) | 6 | (149 | ) | — | — | 2 | ||||||||||||||
CDO/ABS | 1,200 | — | — | (100 | ) | — | — | 1,100 | |||||||||||||||
Total | 14,844 | (210 | ) | 540 | (130 | ) | — | — | 15,044 | ||||||||||||||
Other long-term investments | 1,380 | — | (40 | ) | — | — | — | 1,340 | |||||||||||||||
Total available-for-sale securities | 16,224 | (210 | ) | 500 | (130 | ) | — | — | 16,384 | ||||||||||||||
Trading securities: | |||||||||||||||||||||||
Bonds: | |||||||||||||||||||||||
CDO/ABS | 12,192 | 3 | — | (122 | ) | — | — | 12,073 | |||||||||||||||
Total | $ | 28,416 | $ | (207 | ) | $ | 500 | $ | (252 | ) | $ | — | $ | — | $ | 28,457 | |||||||
* “Purchases, sales, issues, and settlements” column only consist of settlements. There were no purchases, sales, or issues of investment securities for the three months ended March 31, 2013. | |||||||||||||||||||||||
We used observable and/or unobservable inputs to determine the fair value of positions that we have classified within the Level 3 category. As a result, the unrealized gains and losses for assets and liabilities within the Level 3 category presented in the Level 3 tables above may include changes in fair value that were attributable to both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in unobservable long-dated volatilities) inputs. | |||||||||||||||||||||||
The unobservable inputs and quantitative data used in our Level 3 valuations for our investment securities were developed and used in models created by our third-party valuation service providers, which values were used by us for fair value disclosure purposes without adjustment. We applied the third party exception which allows us to omit certain quantitative disclosures about unobservable inputs for other long-term investments. As a result, the weighted average ranges of the inputs for these investment securities are not applicable in the following table. | |||||||||||||||||||||||
Quantitative information about Level 3 inputs for our assets measured at fair value on a recurring basis for which information about the unobservable inputs is reasonably available to us at March 31, 2014 and December 31, 2013 is as follows: | |||||||||||||||||||||||
Range (Weighted Average) | |||||||||||||||||||||||
Valuation Technique(s) | Unobservable Input | March 31, 2014 | December 31, 2013 | ||||||||||||||||||||
Corporate debt | Discounted cash flows | Yield | 2.83% – 2.89% (2.86%) | 2.68% – 8.48% (4.67%) | |||||||||||||||||||
Other long-term investments | Discounted cash flows and indicative valuations | Historical costs | N/A* | N/A* | |||||||||||||||||||
Nature of investment | |||||||||||||||||||||||
Local market conditions | |||||||||||||||||||||||
Comparables | |||||||||||||||||||||||
Operating performance | |||||||||||||||||||||||
Recent financing activity | |||||||||||||||||||||||
* Not applicable. | |||||||||||||||||||||||
The fair values of the assets using significant unobservable inputs are sensitive and can be impacted by significant increases or decreases in any of those inputs. Level 3 broker-priced instruments (RMBS, CMBS, and CDO/ABS) are excluded from the table above because the unobservable inputs are not reasonably available to us. | |||||||||||||||||||||||
Our RMBS, CMBS, and CDO/ABS securities have unobservable inputs that are reliant on and sensitive to the quality of their underlying collateral. The inputs, although not identical, have similar characteristics and interrelationships. Generally a change in the assumption used for the probability of default is accompanied by a directionally similar change in the assumption used for the loss severity and a directionally opposite change in the assumption used for prepayment speeds. An improvement in the workout criteria related to the restructured debt and/or debt covenants of the underlying collateral may lead to an improvement in the cash flows and have an inverse impact on other inputs, specifically a reduction in the amount of discount applied for marketability and liquidity, making the structured bonds more attractive to market participants. | |||||||||||||||||||||||
FAIR VALUE MEASUREMENTS — NON-RECURRING BASIS | |||||||||||||||||||||||
We measure the fair value of certain assets on a non-recurring basis when events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. | |||||||||||||||||||||||
Assets measured at fair value on a non-recurring basis on which we recorded impairment charges were as follows: | |||||||||||||||||||||||
Fair Value Measurements Using | |||||||||||||||||||||||
(dollars in thousands) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
March 31, 2014 | |||||||||||||||||||||||
Assets | |||||||||||||||||||||||
Real estate owned | $ | — | $ | — | $ | 49,982 | $ | 49,982 | |||||||||||||||
Commercial mortgage loans | — | — | 11,933 | 11,933 | |||||||||||||||||||
Total | $ | — | $ | — | $ | 61,915 | $ | 61,915 | |||||||||||||||
December 31, 2013 | |||||||||||||||||||||||
Assets | |||||||||||||||||||||||
Real estate owned | $ | — | $ | — | $ | 71,469 | $ | 71,469 | |||||||||||||||
Commercial mortgage loans | — | — | 11,935 | 11,935 | |||||||||||||||||||
Total | $ | — | $ | — | $ | 83,404 | $ | 83,404 | |||||||||||||||
Net impairment charges recorded on assets measured at fair value on a non-recurring basis were as follows: | |||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Three Months Ended March 31, | 2014 | 2013 | |||||||||||||||||||||
Assets | |||||||||||||||||||||||
Real estate owned | $ | 5,931 | $ | 7,880 | |||||||||||||||||||
Commercial mortgage loans | (50 | ) | (128 | ) | |||||||||||||||||||
Total | $ | 5,881 | $ | 7,752 | |||||||||||||||||||
In accordance with the authoritative guidance for the accounting for the impairment of long-lived assets, we wrote down certain real estate owned reported in our Real Estate segment to their fair value less cost to sell for the three months ended March 31, 2014 and 2013 and recorded the writedowns in other revenues — other. The fair values of real estate owned disclosed in the table above are unadjusted for transaction costs as required by the authoritative guidance for fair value measurements. The amounts of real estate owned recorded in other assets are net of transaction costs as required by the authoritative guidance for accounting for the impairment of long-lived assets. | |||||||||||||||||||||||
In accordance with the authoritative guidance for the accounting for the impairment of commercial mortgage loans, we recorded allowance adjustments on certain impaired commercial mortgage loans reported in our Insurance segment to record their fair value for the three months ended March 31, 2014 and 2013 and recorded the net impairments in investment revenues. | |||||||||||||||||||||||
The unobservable inputs and quantitative data used in our Level 3 valuations for our real estate owned and commercial mortgage loans were developed and used in models created by our third-party valuation service providers or valuations provided by external parties, which values were used by us for fair value disclosure purposes without adjustment. We applied the third party exception which allows us to omit certain quantitative disclosures about unobservable inputs. As a result, the weighted average ranges of the inputs are not applicable in the following table. | |||||||||||||||||||||||
Quantitative information about Level 3 inputs for our assets measured at fair value on a non-recurring basis at March 31, 2014 and December 31, 2013 is as follows: | |||||||||||||||||||||||
Range (Weighted Average) | |||||||||||||||||||||||
Valuation Technique(s) | Unobservable Input | March 31, 2014 | December 31, 2013 | ||||||||||||||||||||
Real estate owned | Market approach | Third-party valuation | N/A* | N/A* | |||||||||||||||||||
Commercial mortgage loans | Market approach | Local market conditions | N/A* | N/A* | |||||||||||||||||||
Nature of investment | |||||||||||||||||||||||
Comparable property sales | |||||||||||||||||||||||
Operating performance | |||||||||||||||||||||||
* Not applicable. | |||||||||||||||||||||||
FAIR VALUE MEASUREMENTS — VALUATION METHODOLOGIES AND ASSUMPTIONS | |||||||||||||||||||||||
We use the following methods and assumptions to estimate fair value. | |||||||||||||||||||||||
Cash and Cash Equivalents | |||||||||||||||||||||||
The carrying amount reported in our condensed consolidated balance sheets approximates fair value. | |||||||||||||||||||||||
Investment Securities | |||||||||||||||||||||||
We utilize third-party valuation service providers to measure the fair value of our investment securities, which are classified as available-for-sale or for trading and consist primarily of bonds. Whenever available, we obtain quoted prices in active markets for identical assets at the balance sheet date to measure investment securities at fair value. We generally obtain market price data from exchange or dealer markets. | |||||||||||||||||||||||
We estimate the fair value of fixed maturity investment securities not traded in active markets by referring to traded securities with similar attributes, using dealer quotations and a matrix pricing methodology, or discounted cash flow analyses. This methodology considers such factors as the issuer’s industry, the security’s rating and tenor, its coupon rate, its position in the capital structure of the issuer, yield curves, credit curves, prepayment rates and other relevant factors. For fixed maturity investment securities that are not traded in active markets or that are subject to transfer restrictions, we adjust the valuations to reflect illiquidity and/or non-transferability. Such adjustments are generally based on available market evidence. In the absence of such evidence, management’s best estimate is used. | |||||||||||||||||||||||
We classify investment securities that are deemed to incorporate an embedded derivative and for which it is impracticable for us to isolate and/or value as trading securities at fair value. | |||||||||||||||||||||||
Finance Receivables | |||||||||||||||||||||||
The fair value of net finance receivables, less allowance for finance receivable losses, both non-impaired and purchased credit impaired, are determined using discounted cash flow methodologies. The application of these methodologies requires us to make certain judgments and estimates based on our perception of market participant views related to the economic and competitive environment, the characteristics of our finance receivables, and other similar factors. The most significant judgments and estimates made relate to prepayment speeds, default rates, loss severity, and discount rates. The degree of judgment and estimation applied is significant in light of the current capital markets and, more broadly, economic environments. Therefore, the fair value of our finance receivables could not be determined with precision and may not be realized in an actual sale. Additionally, there may be inherent weaknesses in the valuation methodologies we employed, and changes in the underlying assumptions used could significantly affect the results of current or future values. | |||||||||||||||||||||||
Restricted Cash | |||||||||||||||||||||||
The carrying amount reported in our condensed consolidated balance sheets approximates fair value. | |||||||||||||||||||||||
Note Receivable from Parent | |||||||||||||||||||||||
The carrying amount of the note receivable from parent approximates the fair value because the note is payable on a demand basis prior to its due date on May 31, 2022 and the interest rate on this note adjusts with changing market interest rates. | |||||||||||||||||||||||
Commercial Mortgage Loans | |||||||||||||||||||||||
We utilize third-party valuation service providers to estimate the fair value of commercial mortgage loans using projected cash flows discounted at an appropriate rate based upon market conditions. | |||||||||||||||||||||||
Real Estate Owned | |||||||||||||||||||||||
We initially based our estimate of the fair value on independent third-party valuations at the time we took title to real estate owned. Subsequent changes in fair value are based upon independent third-party valuations obtained periodically to estimate a price that would be received in a then current transaction to sell the asset. | |||||||||||||||||||||||
Escrow Advance Receivable | |||||||||||||||||||||||
The carrying amount reported in our condensed consolidated balance sheets approximates fair value. | |||||||||||||||||||||||
Receivable from Parent and Affiliates | |||||||||||||||||||||||
The carrying amount reported in our consolidated balance sheets approximates fair value. | |||||||||||||||||||||||
Long-term Debt | |||||||||||||||||||||||
We either receive fair value measurements of our long-term debt from market participants and pricing services or we estimate the fair values of long-term debt using projected cash flows discounted at each balance sheet date’s market-observable implicit-credit spread rates for our long-term debt and adjusted for foreign currency translations. | |||||||||||||||||||||||
Payable to Parent and Affiliates | |||||||||||||||||||||||
The fair value of payable to parent and affiliates approximates the carrying value due to its short-term nature. | |||||||||||||||||||||||
Business_and_Summary_of_Signif1
Business and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2014 | |
Business and Summary of Significant Accounting Policies | ' |
BASIS OF PRESENTATION | ' |
BASIS OF PRESENTATION | |
We prepared our condensed consolidated financial statements using generally accepted accounting principles in the United States of America (“U.S. GAAP”). These statements are unaudited. The year-end condensed balance sheet data was derived from our audited financial statements, but does not include all disclosures required by U.S. GAAP. The statements include the accounts of SFC and its subsidiaries, all of which are wholly owned. | |
We eliminated all material intercompany accounts and transactions. We made judgments, estimates, and assumptions that affect amounts reported in our condensed consolidated financial statements and disclosures of contingent assets and liabilities. In management’s opinion, the condensed consolidated financial statements include the normal, recurring adjustments necessary for a fair statement of results. Ultimate results could differ from our estimates. We evaluated the effects of and the need to disclose events that occurred subsequent to the balance sheet date. These statements should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2013 (“2013 Annual Report on Form 10-K”). We follow the same significant accounting policies for our interim reporting. | |
Prior Period Revisions | ' |
Prior Period Revisions | |
As disclosed in our 2013 Annual Report on Form 10-K, we identified certain out-of-period errors in preparing our annual consolidated financial statements for the year ended December 31, 2013. In addition to these errors, we had previously recorded and disclosed out-of-period adjustments in prior reporting periods when the errors were discovered. As a result, we revised all previously reported periods included in our 2013 Annual Report on Form 10-K. Similarly, we have revised all previously reported periods included in this report. We corrected the errors identified in the fourth quarter of 2013 and included these corrections in the appropriate prior periods. In addition, we reversed all out-of period adjustments previously recorded and disclosed, and included the adjustments in the appropriate periods. After evaluating the quantitative and qualitative aspects of these corrections, we have determined that our previous quarterly condensed financial statements and our annual consolidated financial statements were not materially misstated. | |
See Note 17 for further information on the prior period revisions. | |
In addition, during the first quarter of 2014 we identified that the disclosure of the allowance for finance receivable losses related to our securitized finance receivables at December 31, 2013, was previously incorrectly overstated by $26.8 million. The parenthetical disclosure of the allowance of consolidated variable interest entities (“VIEs”) as of December 31, 2013 on our condensed consolidated balance sheet and the related VIE disclosures in Notes 3 and 9 have been revised in this report to $153.1 million. | |
Fortress Acquisition | ' |
Fortress Acquisition | |
Due to the significance of the ownership interest acquired by FCFI Acquisition LLC, an affiliate of Fortress, (the “Fortress Acquisition”), the nature of the transaction, and at the direction of our acquirer, we applied push-down accounting to SFC as an acquired business. We revalued our assets and liabilities based on their fair values at the date of the Fortress Acquisition, November 30, 2010, in accordance with business combination accounting standards (“push-down accounting”). | |
SIGNIFICANT 2014 TRANSACTIONS | ' |
SIGNIFICANT 2014 TRANSACTIONS | |
Sale of 2009-1 Retained Certificates | |
On July 30, 2009, we completed a private securitization transaction in which a wholly owned special purpose vehicle sold $1.2 billion of certificates backed by real estate loans of the American General Mortgage Loan Trust 2009-1 (the “2009-1 Trust”). We initially retained $786.3 million of the 2009-1 Trust’s subordinate mortgage-backed certificates (the “2009-1 Retained Certificates”). | |
On March 1, 2014, the real estate loans included in the transaction were transferred from held for investment to held for sale, due to management’s intent to no longer hold these finance receivables for the foreseeable future. These loans had a carrying value of $742.0 million at the date of sale and were initially included in net finance receivables. | |
We completed the sale of the 2009-1 Retained Certificates on March 31, 2014. As a result of the sale, we deconsolidated the underlying real estate loans and previously issued securitized interests which were reported in long-term debt, as we no longer were considered the primary beneficiary. | |
Sale of Real Estate Loans | |
On March 7, 2014, we entered into an agreement to sell, subject to certain closing conditions, performing and non-performing real estate loans. As noted in our 2013 Annual Report on Form 10-K, we completed this sale on March 31, 2014. The real estate loans included in the transaction had a carrying value of $93.3 million at the date of sale. On March 1, 2014, these loans were transferred from held for investment to held for sale, due to management’s intent to no longer hold these finance receivables for the foreseeable future. | |
ACCOUNTING PRONOUNCEMENTS | ' |
ACCOUNTING PRONOUNCEMENTS ADOPTED | |
Income Taxes | |
In July 2013, the Financial Accounting Standards Board (“FASB”) issued an accounting standards update (“ASU”), ASU 2013-11, Income Taxes (Topic 740), which clarifies the presentation requirements of unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists at the reporting date. The amendments in this ASU became effective prospectively for the Company for fiscal years, and interim periods within those years, beginning after December 15, 2013. The adoption of this ASU did not have a material effect on our consolidated statements of financial condition, results of operations, or cash flows. | |
ACCOUNTING PRONOUNCEMENTS TO BE ADOPTED | |
Troubled Debt Restructurings | |
In January 2014, the FASB issued ASU 2014-4, Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure, which clarifies when an in substance repossession or foreclosure occurs — that is, when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan such that the loan receivable should be derecognized and the real estate property recognized. The ASU requires a creditor to reclassify a collateralized consumer mortgage loan to real estate property upon obtaining legal title to the real estate collateral, or the borrower voluntarily conveying all interest in the real estate property to the lender to satisfy the loan through a deed in lieu of foreclosure or similar legal agreement. The ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. We are currently evaluating whether the adoption of this ASU will have a material effect on our consolidated statements of financial condition, results of operations, or cash flows. | |
ACCOUNTING POLICY ELECTIONS - Long-term Debt | ' |
ACCOUNTING POLICY ELECTIONS | |
We made certain policy elections with regard to the issuance of long-term debt related to the 2014-A securitization and have updated our long-term debt policy previously disclosed in our 2013 Annual Report on Form 10-K to reflect these elections. The updated long-term debt policy is presented below: | |
Long-term Debt | |
We generally report our long-term debt issuances at the face value of the debt instrument, which we adjust for any unaccreted discount or unamortized premium associated with the debt. We make policy elections on a security by security basis with regard to the methodology used to accrete discounts and premiums. Other than securitized products, we generally accrete discounts and premiums over the contractual life of the security using contractual payment terms. With respect to securitized products, we have historically elected to use estimated prepayment patterns adjusted for changes in estimate over the estimated life of the debt. However, in certain circumstances, including our policy election for the 2014-A securitization, we elect to amortize deferred items over the contractual life of the security. Under either treatment, such accretion is recorded to interest expense. Additionally, we generally accrete other deferred amounts (e.g. issuance costs) following the same method elected on the associated unaccreted discount or premium. |
Finance_Receivables_Tables
Finance Receivables (Tables) | 3 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
Finance Receivables | ' | |||||||||||||
Schedule of components of net finance receivables by type | ' | |||||||||||||
Personal | Real | Retail | ||||||||||||
(dollars in thousands) | Loans | Estate Loans | Sales Finance | Total | ||||||||||
March 31, 2014 | ||||||||||||||
Gross receivables* | $ | 3,648,089 | $ | 6,839,784 | $ | 90,156 | $ | 10,578,029 | ||||||
Unearned finance charges and points and fees | (561,750 | ) | (917 | ) | (8,636 | ) | (571,303 | ) | ||||||
Accrued finance charges | 44,273 | 34,981 | 677 | 79,931 | ||||||||||
Deferred origination costs | 38,031 | 267 | — | 38,298 | ||||||||||
Total | $ | 3,168,643 | $ | 6,874,115 | $ | 82,197 | $ | 10,124,955 | ||||||
December 31, 2013 | ||||||||||||||
Gross receivables* | $ | 3,632,462 | $ | 7,843,787 | $ | 108,457 | $ | 11,584,706 | ||||||
Unearned finance charges and points and fees | (559,902 | ) | (1,208 | ) | (10,444 | ) | (571,554 | ) | ||||||
Accrued finance charges | 48,008 | 42,163 | 898 | 91,069 | ||||||||||
Deferred origination costs | 39,364 | 274 | — | 39,638 | ||||||||||
Total | $ | 3,159,932 | $ | 7,885,016 | $ | 98,911 | $ | 11,143,859 | ||||||
* Gross receivables are defined below: | ||||||||||||||
· finance receivables purchased as a performing receivable — gross finance receivables equal the unpaid principal balance (“UPB”) for interest bearing accounts and the gross remaining contractual payments for precompute accounts plus the remaining unearned discount, net of premium established at the time of purchase to reflect the finance receivable balance at its fair value; | ||||||||||||||
· finance receivables originated subsequent to the Fortress Acquisition — gross finance receivables equal the UPB for interest bearing accounts and the gross remaining contractual payments for precompute accounts; and | ||||||||||||||
· purchased credit impaired finance receivables — gross finance receivables equal the remaining estimated cash flows less the current balance of accretable yield on the purchased credit impaired accounts. | ||||||||||||||
Schedule of unused credit lines extended to customers by the Company | ' | |||||||||||||
March 31, | December 31, | |||||||||||||
(dollars in thousands) | 2014 | 2013 | ||||||||||||
Personal loans | $ | 2,384 | $ | 4,996 | ||||||||||
Real estate loans | 30,627 | 32,338 | ||||||||||||
Total | $ | 33,011 | $ | 37,334 | ||||||||||
Summary of net finance receivables by type by days delinquent | ' | |||||||||||||
Personal | Real | Retail | ||||||||||||
(dollars in thousands) | Loans | Estate Loans | Sales Finance | Total | ||||||||||
March 31, 2014 | ||||||||||||||
Net finance receivables: | ||||||||||||||
60-89 days past due | $ | 22,379 | $ | 95,196 | $ | 889 | $ | 118,464 | ||||||
90-119 days past due | 20,018 | 51,880 | 665 | 72,563 | ||||||||||
120-149 days past due | 18,789 | 46,864 | 823 | 66,476 | ||||||||||
150-179 days past due | 16,741 | 39,484 | 555 | 56,780 | ||||||||||
180 days or more past due | 1,926 | 327,272 | 234 | 329,432 | ||||||||||
Total delinquent finance receivables | 79,853 | 560,696 | 3,166 | 643,715 | ||||||||||
Current | 3,051,293 | 6,137,205 | 77,527 | 9,266,025 | ||||||||||
30-59 days past due | 37,497 | 176,214 | 1,504 | 215,215 | ||||||||||
Total | $ | 3,168,643 | $ | 6,874,115 | $ | 82,197 | $ | 10,124,955 | ||||||
December 31, 2013 | ||||||||||||||
Net finance receivables: | ||||||||||||||
60-89 days past due | $ | 28,297 | $ | 96,778 | $ | 1,290 | $ | 126,365 | ||||||
90-119 days past due | 22,648 | 67,966 | 1,017 | 91,631 | ||||||||||
120-149 days past due | 18,662 | 54,882 | 757 | 74,301 | ||||||||||
150-179 days past due | 14,618 | 45,040 | 740 | 60,398 | ||||||||||
180 days or more past due | 934 | 353,003 | 173 | 354,110 | ||||||||||
Total delinquent finance receivables | 85,159 | 617,669 | 3,977 | 706,805 | ||||||||||
Current | 3,027,460 | 7,092,107 | 92,093 | 10,211,660 | ||||||||||
30-59 days past due | 47,313 | 175,240 | 2,841 | 225,394 | ||||||||||
Total | $ | 3,159,932 | $ | 7,885,016 | $ | 98,911 | $ | 11,143,859 | ||||||
Schedule of performing and nonperforming net finance receivables by type | ' | |||||||||||||
Personal | Real | Retail | ||||||||||||
(dollars in thousands) | Loans | Estate Loans | Sales Finance | Total | ||||||||||
March 31, 2014 | ||||||||||||||
Performing | $ | 3,111,169 | $ | 6,408,615 | $ | 79,920 | $ | 9,599,704 | ||||||
Nonperforming | 57,474 | 465,500 | 2,277 | 525,251 | ||||||||||
Total | $ | 3,168,643 | $ | 6,874,115 | $ | 82,197 | $ | 10,124,955 | ||||||
December 31, 2013 | ||||||||||||||
Performing | $ | 3,103,070 | $ | 7,364,125 | $ | 96,224 | $ | 10,563,419 | ||||||
Nonperforming | 56,862 | 520,891 | 2,687 | 580,440 | ||||||||||
Total | $ | 3,159,932 | $ | 7,885,016 | $ | 98,911 | $ | 11,143,859 | ||||||
Schedule of information regarding purchased credit impaired finance receivables | ' | |||||||||||||
March 31, | December 31, | |||||||||||||
(dollars in thousands) | 2014 | 2013 | ||||||||||||
Carrying amount, net of allowance | $ | 1,104,919 | $ | 1,250,621 | ||||||||||
Outstanding balance | $ | 1,584,251 | $ | 1,782,271 | ||||||||||
Allowance for purchased credit impaired finance receivable losses | $ | 64,863 | $ | 57,261 | ||||||||||
Schedule of changes in accretable yield for purchased credit impaired finance receivables | ' | |||||||||||||
(dollars in thousands) | ||||||||||||||
At or for the Three Months Ended March 31, | 2014 | 2013 | ||||||||||||
Balance at beginning of period | $ | 766,927 | $ | 624,879 | ||||||||||
Accretion | (28,832 | ) | (32,831 | ) | ||||||||||
Transfers to finance receivables held for sale | (56,631 | ) | — | |||||||||||
Disposals* | (5,477 | ) | (7,128 | ) | ||||||||||
Balance at end of period | $ | 675,987 | $ | 584,920 | ||||||||||
* Disposals of finance receivables represent finance charges forfeited due to purchased credit impaired finance receivables charged-off during the period. | ||||||||||||||
Schedule of information regarding troubled debt restructured ("TDR") finance receivables | ' | |||||||||||||
Real Estate | ||||||||||||||
(dollars in thousands) | Loans | |||||||||||||
March 31, 2014 | ||||||||||||||
TDR gross finance receivables | $ | 1,341,868 | ||||||||||||
TDR net finance receivables | $ | 1,346,901 | ||||||||||||
Allowance for TDR finance receivable losses | $ | 192,909 | ||||||||||||
December 31, 2013 | ||||||||||||||
TDR gross finance receivables | $ | 1,366,346 | ||||||||||||
TDR net finance receivables | $ | 1,371,321 | ||||||||||||
Allowance for TDR finance receivable losses | $ | 177,011 | ||||||||||||
Schedule of TDR average net receivables and finance charges recognized on TDR finance receivables | ' | |||||||||||||
(dollars in thousands) | ||||||||||||||
Three Months Ended March 31, | 2014 | 2013 | ||||||||||||
Revised | ||||||||||||||
Real Estate Loans | ||||||||||||||
TDR average net receivables | $ | 1,412,808 | $ | 905,128 | ||||||||||
TDR finance charges recognized | $ | 17,593 | $ | 14,910 | ||||||||||
Schedule of information regarding new volume of the TDR finance receivables | ' | |||||||||||||
(dollars in thousands) | ||||||||||||||
Three Months Ended March 31, | 2014 | 2013 | ||||||||||||
Revised | ||||||||||||||
Real Estate Loans | ||||||||||||||
Number of TDR accounts | 988 | 2,048 | ||||||||||||
Pre-modification TDR net finance receivables | $ | 102,371 | $ | 164,116 | ||||||||||
Post-modification TDR net finance receivables | $ | 93,361 | $ | 171,567 | ||||||||||
Schedule of net finance receivables that were modified as TDR finance receivables within the previous 12 months and for which there was a default during the period to cause TDR finance receivables to be considered nonperforming | ' | |||||||||||||
(dollars in thousands) | ||||||||||||||
Three Months Ended March 31, | 2014 | 2013 | ||||||||||||
Revised | ||||||||||||||
Real Estate Loans | ||||||||||||||
Number of TDR accounts | 229 | 224 | ||||||||||||
TDR net finance receivables* | $ | 15,503 | $ | 18,250 | ||||||||||
* Represents the corresponding balance of TDR net finance receivables at the end of the month in which they defaulted. |
Allowance_for_Finance_Receivab1
Allowance for Finance Receivable Losses (Tables) | 3 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
Allowance for Finance Receivable Losses | ' | |||||||||||||
Schedule of changes in the allowance for finance receivable losses by finance receivable type | ' | |||||||||||||
Personal | Real | Retail | Consolidated | |||||||||||
(dollars in thousands) | Loans | Estate Loans | Sales Finance | Total | ||||||||||
Three Months Ended March 31, 2014 | ||||||||||||||
Balance at beginning of period | $ | 94,323 | $ | 236,032 | $ | 1,840 | $ | 332,195 | ||||||
Provision for finance receivable losses (a) | 46,893 | 57,953 | 2,166 | 107,012 | ||||||||||
Charge-offs | (44,107 | ) | (27,590 | ) | (1,605 | ) | (73,302 | ) | ||||||
Recoveries (b) | 4,678 | 3,515 | 289 | 8,482 | ||||||||||
Transfers to finance receivables held for sale (c) | — | (10,084 | ) | — | (10,084 | ) | ||||||||
Balance at end of period | $ | 101,787 | $ | 259,826 | $ | 2,690 | $ | 364,303 | ||||||
Three Months Ended March 31, 2013 - Revised | ||||||||||||||
Balance at beginning of period | $ | 66,580 | $ | 113,861 | $ | 2,260 | $ | 182,701 | ||||||
Provision for finance receivable losses (a) | 25,021 | 68,820 | 390 | 94,231 | ||||||||||
Charge-offs (d) | (42,769 | ) | (34,127 | ) | (3,327 | ) | (80,223 | ) | ||||||
Recoveries | 9,088 | 2,436 | 2,327 | 13,851 | ||||||||||
Balance at end of period | $ | 57,920 | $ | 150,990 | $ | 1,650 | $ | 210,560 | ||||||
(a) Components of provision for finance receivable losses on our real estate loans were as follows: | ||||||||||||||
(dollars in thousands) | ||||||||||||||
Three Months Ended March 31, | 2014 | 2013 | ||||||||||||
Real estate loans | ||||||||||||||
Provision for finance receivable losses | ||||||||||||||
Non-credit impaired finance receivables | $ | 12,906 | $ | 19,551 | ||||||||||
Purchased credit impaired finance receivables | 19,991 | 22,022 | ||||||||||||
TDR finance receivables | 25,056 | 27,247 | ||||||||||||
Total | $ | 57,953 | $ | 68,820 | ||||||||||
(b) Recoveries during the three months ended March 31, 2014 included $2.2 million of real estate loan recoveries resulting from a sale of previously charged-off real estate loans in March 2014, net of a $0.2 million reserve for subsequent buybacks. | ||||||||||||||
(c) During the first quarter of 2014, we decreased the allowance for finance receivable losses as a result of the transfer of $835.3 million of real estate loans 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. | ||||||||||||||
(d) 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 $13.3 million of additional charge-offs in March 2013. | ||||||||||||||
Schedule of components of provision for finance receivable losses on real estate loans | ' | |||||||||||||
(dollars in thousands) | ||||||||||||||
Three Months Ended March 31, | 2014 | 2013 | ||||||||||||
Real estate loans | ||||||||||||||
Provision for finance receivable losses | ||||||||||||||
Non-credit impaired finance receivables | $ | 12,906 | $ | 19,551 | ||||||||||
Purchased credit impaired finance receivables | 19,991 | 22,022 | ||||||||||||
TDR finance receivables | 25,056 | 27,247 | ||||||||||||
Total | $ | 57,953 | $ | 68,820 | ||||||||||
Schedule of carrying value charged-off for purchased credit impaired loans | ' | |||||||||||||
(dollars in thousands) | ||||||||||||||
Three Months Ended March 31, | 2014 | 2013 | ||||||||||||
Real estate loans | ||||||||||||||
Charged off against provision for finance receivable losses: | ||||||||||||||
Purchased credit impaired finance receivables * | $ | 6,426 | $ | 9,850 | ||||||||||
* Represents 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. | ||||||||||||||
Schedule of allowance for finance receivable losses and net finance receivables by type and by impairment method | ' | |||||||||||||
Personal | Real | Retail | ||||||||||||
(dollars in thousands) | Loans | Estate Loans | Sales Finance | Total | ||||||||||
March 31, 2014 | ||||||||||||||
Allowance for finance receivable losses for finance receivables: | ||||||||||||||
Collectively evaluated for impairment | $ | 101,787 | $ | 2,054 | $ | 2,690 | $ | 106,531 | ||||||
Acquired with deteriorated credit quality (purchased credit impaired finance receivables) | — | 64,863 | — | 64,863 | ||||||||||
Individually evaluated for impairment (TDR finance receivables) | — | 192,909 | — | 192,909 | ||||||||||
Total | $ | 101,787 | $ | 259,826 | $ | 2,690 | $ | 364,303 | ||||||
Finance receivables: | ||||||||||||||
Collectively evaluated for impairment | $ | 3,168,643 | $ | 4,357,432 | $ | 82,197 | $ | 7,608,272 | ||||||
Purchased credit impaired finance receivables | — | 1,169,782 | — | 1,169,782 | ||||||||||
TDR finance receivables | — | 1,346,901 | — | 1,346,901 | ||||||||||
Total | $ | 3,168,643 | $ | 6,874,115 | $ | 82,197 | $ | 10,124,955 | ||||||
December 31, 2013 | ||||||||||||||
Allowance for finance receivable losses for finance receivables: | ||||||||||||||
Collectively evaluated for impairment | $ | 94,323 | $ | 1,760 | $ | 1,840 | $ | 97,923 | ||||||
Purchased credit impaired finance receivables | — | 57,261 | — | 57,261 | ||||||||||
TDR finance receivables | — | 177,011 | — | 177,011 | ||||||||||
Total | $ | 94,323 | $ | 236,032 | $ | 1,840 | $ | 332,195 | ||||||
Finance receivables: | ||||||||||||||
Collectively evaluated for impairment | $ | 3,159,932 | $ | 5,205,813 | $ | 98,911 | $ | 8,464,656 | ||||||
Purchased credit impaired finance receivables | — | 1,307,882 | — | 1,307,882 | ||||||||||
TDR finance receivables | — | 1,371,321 | — | 1,371,321 | ||||||||||
Total | $ | 3,159,932 | $ | 7,885,016 | $ | 98,911 | $ | 11,143,859 |
Finance_Receivables_Held_for_S1
Finance Receivables Held for Sale (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Finance Receivables Held for Sale | ' | |||||||
Schedule of activity in reserve for sales recourse obligations | ' | |||||||
(dollars in thousands) | ||||||||
At or for the Three Months Ended March 31, | 2014 | 2013 | ||||||
Balance at beginning of period | $ | 4,702 | $ | 4,863 | ||||
Provision for/(reduction in) recourse obligations | — | 322 | ||||||
Recourse losses | — | (386 | ) | |||||
Balance at end of period | $ | 4,702 | $ | 4,799 |
Investment_Securities_Tables
Investment Securities (Tables) | 3 Months Ended | |||||||||||||||||||
Mar. 31, 2014 | ||||||||||||||||||||
Investment securities | ' | |||||||||||||||||||
Schedule of the cost/amortized cost, unrealized gains and losses, and fair value of available-for-sale securities by type | ' | |||||||||||||||||||
Cost/ | ||||||||||||||||||||
Amortized | Unrealized | Unrealized | Fair | |||||||||||||||||
(dollars in thousands) | Cost | Gains | Losses | Value | ||||||||||||||||
March 31, 2014 | ||||||||||||||||||||
Fixed maturity available-for-sale securities: | ||||||||||||||||||||
Bonds: | ||||||||||||||||||||
U.S. government and government sponsored entities | $ | 60,226 | $ | 2,062 | $ | (309 | ) | $ | 61,979 | |||||||||||
Obligations of states, municipalities, and political subdivisions | 109,111 | 2,235 | (92 | ) | 111,254 | |||||||||||||||
Corporate debt | 260,654 | 9,854 | (1,491 | ) | 269,017 | |||||||||||||||
Mortgage-backed, asset-backed, and collateralized: | ||||||||||||||||||||
Residential mortgage-backed securities (“RMBS”) | 67,371 | 2,193 | (280 | ) | 69,284 | |||||||||||||||
Commercial mortgage-backed securities (“CMBS”) | 21,912 | 249 | (27 | ) | 22,134 | |||||||||||||||
Collateralized debt obligations (“CDO”)/Asset-backed securities (“ABS”) | 3,916 | 29 | — | 3,945 | ||||||||||||||||
Total | 523,190 | 16,622 | (2,199 | ) | 537,613 | |||||||||||||||
Preferred stock | 7,068 | 129 | — | 7,197 | ||||||||||||||||
Other long-term investments* | 1,395 | — | (126 | ) | 1,269 | |||||||||||||||
Common stocks | 850 | — | — | 850 | ||||||||||||||||
Total | $ | 532,503 | $ | 16,751 | $ | (2,325 | ) | $ | 546,929 | |||||||||||
December 31, 2013 | ||||||||||||||||||||
Fixed maturity available-for-sale securities: | ||||||||||||||||||||
Bonds: | ||||||||||||||||||||
U.S. government and government sponsored entities | $ | 58,748 | $ | 565 | $ | (680 | ) | $ | 58,633 | |||||||||||
Obligations of states, municipalities, and political subdivisions | 101,118 | 1,703 | (76 | ) | 102,745 | |||||||||||||||
Corporate debt | 233,977 | 6,126 | (2,187 | ) | 237,916 | |||||||||||||||
Mortgage-backed, asset-backed, and collateralized: | ||||||||||||||||||||
RMBS | 81,259 | 1,923 | (559 | ) | 82,623 | |||||||||||||||
CMBS | 7,487 | 76 | (16 | ) | 7,547 | |||||||||||||||
CDO/ABS | 3,981 | 19 | (24 | ) | 3,976 | |||||||||||||||
Total | 486,570 | 10,412 | (3,542 | ) | 493,440 | |||||||||||||||
Preferred stock | 7,844 | — | (39 | ) | 7,805 | |||||||||||||||
Other long-term investments* | 1,394 | — | (125 | ) | 1,269 | |||||||||||||||
Common stocks | 850 | — | — | 850 | ||||||||||||||||
Total | $ | 496,658 | $ | 10,412 | $ | (3,706 | ) | $ | 503,364 | |||||||||||
* Excludes interest in a limited partnership that we account for using the equity method ($0.6 million at March 31, 2014 and December 31, 2013). | ||||||||||||||||||||
Schedule of fair value and unrealized losses on investment securities by type and length of time in a continuous unrealized loss position | ' | |||||||||||||||||||
Less Than 12 Months | 12 Months or Longer | Total | ||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | |||||||||||||||
(dollars in thousands) | Value | Losses | Value | Losses | Value | Losses | ||||||||||||||
March 31, 2014 | ||||||||||||||||||||
Bonds: | ||||||||||||||||||||
U.S. government and government sponsored entities | $ | 23,619 | $ | (309 | ) | $ | — | $ | — | $ | 23,619 | $ | (309 | ) | ||||||
Obligations of states, municipalities, and political subdivisions | 20,246 | (92 | ) | — | — | 20,246 | (92 | ) | ||||||||||||
Corporate debt | 40,754 | (1,068 | ) | 6,365 | (423 | ) | 47,119 | (1,491 | ) | |||||||||||
RMBS | 4,929 | (280 | ) | — | — | 4,929 | (280 | ) | ||||||||||||
CMBS | 5,210 | (27 | ) | — | — | 5,210 | (27 | ) | ||||||||||||
Total | 94,758 | (1,776 | ) | 6,365 | (423 | ) | 101,123 | (2,199 | ) | |||||||||||
Other long-term investments | — | — | 1,269 | (126 | ) | 1,269 | (126 | ) | ||||||||||||
Total | $ | 94,758 | $ | (1,776 | ) | $ | 7,634 | $ | (549 | ) | $ | 102,392 | $ | (2,325 | ) | |||||
December 31, 2013 | ||||||||||||||||||||
Bonds: | ||||||||||||||||||||
U.S. government and government sponsored entities | $ | 44,314 | $ | (680 | ) | $ | — | $ | — | $ | 44,314 | $ | (680 | ) | ||||||
Obligations of states, municipalities, and political subdivisions | 14,220 | (76 | ) | — | — | 14,220 | (76 | ) | ||||||||||||
Corporate debt | 65,809 | (1,535 | ) | 11,772 | (652 | ) | 77,581 | (2,187 | ) | |||||||||||
RMBS | 18,288 | (559 | ) | — | — | 18,288 | (559 | ) | ||||||||||||
CMBS | 2,993 | (16 | ) | — | — | 2,993 | (16 | ) | ||||||||||||
CDO/ABS | 2,658 | (24 | ) | — | — | 2,658 | (24 | ) | ||||||||||||
Total | 148,282 | (2,890 | ) | 11,772 | (652 | ) | 160,054 | (3,542 | ) | |||||||||||
Preferred stock | 7,805 | (39 | ) | — | — | 7,805 | (39 | ) | ||||||||||||
Other long-term investments | 1,269 | (125 | ) | — | — | 1,269 | (125 | ) | ||||||||||||
Total | $ | 157,356 | $ | (3,054 | ) | $ | 11,772 | $ | (652 | ) | $ | 169,128 | $ | (3,706 | ) | |||||
Schedule of changes in the cumulative amount of credit losses (recognized in earnings) on other-than-temporarily impaired available-for-sale securities | ' | |||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
At or for the Three Months Ended March 31, | 2014 | 2013 | ||||||||||||||||||
Balance at beginning of period | $ | 1,523 | $ | 1,650 | ||||||||||||||||
Additions: | ||||||||||||||||||||
Due to other-than-temporary impairments: | ||||||||||||||||||||
Impairment previously recognized | — | 26 | ||||||||||||||||||
Reductions: | ||||||||||||||||||||
Realized due to dispositions with no prior intention to sell | (205 | ) | — | |||||||||||||||||
Balance at end of period | $ | 1,318 | $ | 1,676 | ||||||||||||||||
Schedule of contractual maturities of fixed-maturity available-for-sale securities | ' | |||||||||||||||||||
(dollars in thousands) | Fair | Amortized | ||||||||||||||||||
March 31, 2014 | Value | Cost | ||||||||||||||||||
Fixed maturities, excluding mortgage-backed securities: | ||||||||||||||||||||
Due in 1 year or less | $ | 7,075 | $ | 7,053 | ||||||||||||||||
Due after 1 year through 5 years | 159,690 | 155,975 | ||||||||||||||||||
Due after 5 years through 10 years | 123,122 | 121,744 | ||||||||||||||||||
Due after 10 years | 152,363 | 145,219 | ||||||||||||||||||
Mortgage-backed securities | 95,363 | 93,199 | ||||||||||||||||||
Total | $ | 537,613 | $ | 523,190 | ||||||||||||||||
Schedule of fair value of trading securities by type | ' | |||||||||||||||||||
March 31, | December 31, | |||||||||||||||||||
(dollars in thousands) | 2014 | 2013 | ||||||||||||||||||
Fixed maturity trading securities: | ||||||||||||||||||||
Bonds: | ||||||||||||||||||||
Corporate debt | $ | 1,758 | $ | 1,837 | ||||||||||||||||
Mortgage-backed, asset-backed, and collateralized: | ||||||||||||||||||||
RMBS | 10,251 | 10,671 | ||||||||||||||||||
CMBS | 39,788 | 29,897 | ||||||||||||||||||
CDO/ABS | 9,138 | 9,249 | ||||||||||||||||||
Total | $ | 60,935 | $ | 51,654 | ||||||||||||||||
Available-for-sale securities | ' | |||||||||||||||||||
Investment securities | ' | |||||||||||||||||||
Schedule of realized gains, realized losses, and net realized gains (losses) due to sale or redemption of fair values of available-for-sale securities | ' | |||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
Three Months Ended March 31, | 2014 | 2013 | ||||||||||||||||||
Revised | ||||||||||||||||||||
Fair value | $ | 50,820 | $ | 34,206 | ||||||||||||||||
Realized gains | $ | 1,984 | $ | 119 | ||||||||||||||||
Realized losses | (151 | ) | (170 | ) | ||||||||||||||||
Net realized gains (losses) | $ | 1,833 | $ | (51 | ) | |||||||||||||||
Trading securities | ' | |||||||||||||||||||
Investment securities | ' | |||||||||||||||||||
Schedule of net unrealized and realized gains on trading securities | ' | |||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
Three Months Ended March 31, | 2014 | 2013 | ||||||||||||||||||
Revised | ||||||||||||||||||||
Net unrealized gains on trading securities held at period end | $ | — | $ | 959 | ||||||||||||||||
Net realized gains on trading securities sold or redeemed | 15 | 48 | ||||||||||||||||||
Total | $ | 15 | $ | 1,007 |
Transactions_with_Affiliates_o1
Transactions with Affiliates of Fortress or AIG (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Transactions with Affiliates of Fortress or AIG | ' | |||||||
Schedule of subservicing fees and refinancing concessions | ' | |||||||
(dollars in thousands) | ||||||||
Three Months Ended March 31, | 2014 | 2013 | ||||||
Subservicing fees | $ | 2,008 | $ | 2,372 | ||||
Refinancing concessions | $ | — | $ | 253 |
Longterm_Debt_Tables
Long-term Debt (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Long-term Debt | ' | ||||||||||||||||
Schedule of principal maturities of long-term debt by type of debt | ' | ||||||||||||||||
Medium | Junior | ||||||||||||||||
Retail | Term | Subordinated | |||||||||||||||
(dollars in thousands) | Notes | Notes | Securitizations | Debt | Total | ||||||||||||
Interest rates (a) | 5.40%-7.50% | 5.40%-8.25% | 1.27%-6.00% | 6 | % | ||||||||||||
Second quarter 2014 | $ | 10,887 | $ | — | $ | — | $ | — | $ | 10,887 | |||||||
Third quarter 2014 | 8,564 | — | — | — | 8,564 | ||||||||||||
Fourth quarter 2014 | 335,486 | — | — | — | 335,486 | ||||||||||||
First quarter 2015 | 16,575 | — | — | — | 16,575 | ||||||||||||
Remainder of 2015 | 30,679 | 750,000 | — | — | 780,679 | ||||||||||||
2016 | — | 375,000 | — | — | 375,000 | ||||||||||||
2017 | — | 2,360,837 | — | — | 2,360,837 | ||||||||||||
2018 | — | — | — | — | — | ||||||||||||
2019-2067 | — | 1,250,000 | — | 350,000 | 1,600,000 | ||||||||||||
Securitizations (b) | — | — | 5,079,298 | — | 5,079,298 | ||||||||||||
Total principal maturities | $ | 402,191 | $ | 4,735,837 | $ | 5,079,298 | $ | 350,000 | $ | 10,567,326 | |||||||
Total carrying amount | $ | 389,601 | $ | 4,187,231 | $ | 5,061,864 | (c) | $ | 171,595 | $ | 9,810,291 | ||||||
(a) The interest rates shown are the range of contractual rates in effect at March 31, 2014. | |||||||||||||||||
(b) Securitizations are not included in above maturities by period due to their variable monthly repayments. See Note 9 for further information on our long-term debt associated with securitizations. | |||||||||||||||||
(c) The net carrying amount of our long-term debt associated with certain securitizations that were either 1) issued at a premium or discount or 2) revalued at a premium or discount based on its fair value at the time of the Fortress Acquisition. |
Variable_Interest_Entities_Tab
Variable Interest Entities (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Variable Interest Entities | ' | |||||||
Schedule of carrying amounts of consolidated VIE assets and liabilities associated with securitization trusts | ' | |||||||
March 31, | December 31, | |||||||
(dollars in thousands) | 2014 | 2013 | ||||||
Assets | ||||||||
Finance receivables: | ||||||||
Personal loans | $ | 1,758,946 | $ | 1,572,070 | ||||
Real estate loans | 4,718,033 | 5,595,150 | ||||||
Allowance for finance receivable losses | 153,873 | 153,084 | ||||||
Restricted cash | 327,846 | 345,906 | ||||||
Liabilities | ||||||||
Long-term debt | $ | 5,061,864 | $ | 5,160,227 |
Derivative_Financial_Instrumen1
Derivative Financial Instruments (Tables) | 3 Months Ended | ||||
Mar. 31, 2014 | |||||
Derivative Financial Instruments | ' | ||||
Schedule of derivative adjustments included in other revenues - other | ' | ||||
(dollars in thousands) | |||||
Three Months Ended March 31, | 2013 | ||||
Mark to market losses | $ | (16,875 | ) | ||
Net interest income | 3,598 | ||||
Credit valuation adjustment gains | 40 | ||||
Total | $ | (13,237 | ) |
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Accumulated Other Comprehensive Income | ' | ||||||||||||||||
Schedule of changes in accumulated other comprehensive income | ' | ||||||||||||||||
Total | |||||||||||||||||
Accumulated | |||||||||||||||||
Unrealized | Unrealized | Retirement | Foreign | Other | |||||||||||||
Gains (Losses) | Gains (Losses) | Plan | Currency | Comprehensive | |||||||||||||
Investment | Cash Flow | Liabilities | Translation | Income | |||||||||||||
(dollars in thousands) | Securities | Hedges | Adjustments | Adjustments | (Loss) | ||||||||||||
Three Months Ended March 31, 2014 | |||||||||||||||||
Balance at beginning of period | $ | 4,362 | $ | — | $ | 20,153 | $ | 3,580 | $ | 28,095 | |||||||
Other comprehensive income (loss) before reclassifications | 6,375 | — | — | (127 | ) | 6,248 | |||||||||||
Reclassification adjustments from accumulated other comprehensive income | (1,201 | ) | — | — | — | (1,201 | ) | ||||||||||
Balance at end of period | $ | 9,536 | $ | — | $ | 20,153 | $ | 3,453 | $ | 33,142 | |||||||
Three Months Ended March 31, 2013 - Revised | |||||||||||||||||
Balance at beginning of period | $ | 13,545 | $ | 104 | $ | 8,120 | $ | 4,127 | $ | 25,896 | |||||||
Other comprehensive income (loss) before reclassifications | (720 | ) | — | — | 2,114 | 1,394 | |||||||||||
Reclassification adjustments from accumulated other comprehensive income | 50 | (104 | ) | — | — | (54 | ) | ||||||||||
Balance at end of period | $ | 12,875 | $ | — | $ | 8,120 | $ | 6,241 | $ | 27,236 | |||||||
Schedule of reclassification adjustments from accumulated other comprehensive income | ' | ||||||||||||||||
(dollars in thousands) | |||||||||||||||||
Three Months Ended March 31, | 2014 | 2013 | |||||||||||||||
Revised | |||||||||||||||||
Unrealized gains (losses) on investment securites: | |||||||||||||||||
Reclassification from accumulated other comprehensive income (loss) to investment revenues, before taxes | $ | 1,848 | $ | (77 | ) | ||||||||||||
Income tax effect | (647 | ) | 27 | ||||||||||||||
Reclassification from accumulated other comprehensive income (loss) to investment revenues, net of taxes | 1,201 | (50 | ) | ||||||||||||||
Unrealized gains on cash flow hedges: | |||||||||||||||||
Reclassification from accumulated other comprehensive income (loss) to interest expense, before taxes | — | 160 | |||||||||||||||
Income tax effect | — | (56 | ) | ||||||||||||||
Reclassification from accumulated other comprehensive income (loss) to interest expense and other revenues, net of taxes | — | 104 | |||||||||||||||
Total | $ | 1,201 | $ | 54 |
Benefit_Plans_Tables
Benefit Plans (Tables) | 3 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
Benefit Plans | ' | |||||||||||||
Schedule of components of net periodic benefit cost | ' | |||||||||||||
(dollars in thousands) | Pension | Postretirement | ||||||||||||
Three Months Ended March 31, | 2014 | 2013 | 2014 | 2013 | ||||||||||
Components of net periodic benefit cost: | ||||||||||||||
Service cost | $ | — | $ | — | $ | 22 | $ | 81 | ||||||
Interest cost | 3,818 | 3,590 | 26 | 64 | ||||||||||
Expected return on assets | (4,109 | ) | (3,874 | ) | — | — | ||||||||
Amortization of net loss (gain) | 1 | 12 | (67 | ) | — | |||||||||
Net periodic benefit cost | $ | (290 | ) | $ | (272 | ) | $ | (19 | ) | $ | 145 |
Segment_Information_Tables
Segment Information (Tables) | 3 Months Ended | |||||||||||||||||||
Mar. 31, 2014 | ||||||||||||||||||||
Segment Information | ' | |||||||||||||||||||
Schedule of information about the Company's segments as well as reconciliations to condensed consolidated financial statement amounts | ' | |||||||||||||||||||
Push-down | ||||||||||||||||||||
Accounting | Consolidated | |||||||||||||||||||
(dollars in thousands) | Consumer | Insurance | Real Estate | Other | Adjustments | Total | ||||||||||||||
At or for the Three Months Ended March 31, 2014 | ||||||||||||||||||||
Interest income | $ | 208,946 | $ | — | $ | 153,245 | $ | 5,104 | $ | 35,274 | $ | 402,569 | ||||||||
Interest expense | 40,622 | — | 110,348 | 2,148 | 28,628 | 181,746 | ||||||||||||||
Net interest income | 168,324 | — | 42,897 | 2,956 | 6,646 | 220,823 | ||||||||||||||
Provision for finance receivable losses | 44,932 | — | 61,374 | 964 | (258 | ) | 107,012 | |||||||||||||
Net interest income after provision for finance receivable losses | 123,392 | — | (18,477 | ) | 1,992 | 6,904 | 113,811 | |||||||||||||
Other revenues: | ||||||||||||||||||||
Insurance | — | 38,384 | — | 38 | (3 | ) | 38,419 | |||||||||||||
Investment | — | 10,267 | — | — | (836 | ) | 9,431 | |||||||||||||
Intersegment - insurance commissions | 12,289 | (12,347 | ) | 70 | (12 | ) | — | — | ||||||||||||
Net gain (loss) on repurchases and repayments of debt | (1,426 | ) | — | (10,025 | ) | (48 | ) | 4,884 | (6,615 | ) | ||||||||||
Net gain (loss) on fair value adjustments on debt | — | — | 8,298 | — | (8,298 | ) | — | |||||||||||||
Net gain (loss) on sales of real estate loans and related trust assets | — | — | (62,176 | ) | — | 117,362 | 55,186 | |||||||||||||
Other | 580 | 1,641 | (1,179 | ) | 1,992 | — | 3,034 | |||||||||||||
Total other revenues | 11,443 | 37,945 | (65,012 | ) | 1,970 | 113,109 | 99,455 | |||||||||||||
Other expenses: | ||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||
Salaries and benefits | 65,479 | 4,554 | 8,526 | 3,671 | (44 | ) | 82,186 | |||||||||||||
Other operating expenses | 31,577 | 3,225 | 12,955 | 1,681 | 995 | 50,433 | ||||||||||||||
Insurance losses and loss adjustment expenses | — | 18,611 | — | — | (246 | ) | 18,365 | |||||||||||||
Total other expenses | 97,056 | 26,390 | 21,481 | 5,352 | 705 | 150,984 | ||||||||||||||
Income (loss) before provison for (benefit from) income taxes | $ | 37,779 | $ | 11,555 | $ | (104,970 | ) | $ | (1,390 | ) | $ | 119,308 | $ | 62,282 | ||||||
Assets | $ | 3,205,636 | $ | 967,627 | $ | 7,258,737 | $ | 1,008,735 | $ | (433,878 | ) | $ | 12,006,857 | |||||||
Push-down | ||||||||||||||||||||
Accounting | Consolidated | |||||||||||||||||||
(dollars in thousands) | Consumer | Insurance | Real Estate | Other | Adjustments | Total | ||||||||||||||
At or for the Three Months Ended March 31, 2013 - Revised | ||||||||||||||||||||
Interest income | $ | 160,483 | $ | — | $ | 184,956 | $ | 15,344 | $ | 47,734 | $ | 408,517 | ||||||||
Interest expense | 36,951 | — | 152,688 | 4,860 | 35,807 | 230,306 | ||||||||||||||
Net interest income | 123,532 | — | 32,268 | 10,484 | 11,927 | 178,211 | ||||||||||||||
Provision for finance receivable losses | 19,961 | — | 72,248 | 993 | 1,029 | 94,231 | ||||||||||||||
Net interest income after provision for finance receivable losses | 103,571 | — | (39,980 | ) | 9,491 | 10,898 | 83,980 | |||||||||||||
Other revenues: | ||||||||||||||||||||
Insurance | — | 32,892 | — | 20 | (12 | ) | 32,900 | |||||||||||||
Investment | — | 10,385 | — | — | (1,547 | ) | 8,838 | |||||||||||||
Intersegment - insurance commissions | 10,843 | (10,836 | ) | 28 | (35 | ) | — | — | ||||||||||||
Net gain (loss) on fair value adjustments on debt | — | — | 14,964 | — | (14,964 | ) | — | |||||||||||||
Other | 423 | 1,793 | (1,100 | ) | 4,427 | (281 | ) | 5,262 | ||||||||||||
Total other revenues | 11,266 | 34,234 | 13,892 | 4,412 | (16,804 | ) | 47,000 | |||||||||||||
Other expenses: | ||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||
Salaries and benefits | 60,053 | 2,925 | 6,497 | 8,476 | (53 | ) | 77,898 | |||||||||||||
Other operating expenses | 29,145 | 2,340 | 14,729 | 1,592 | 1,156 | 48,962 | ||||||||||||||
Insurance losses and loss adjustment expenses | — | 14,968 | — | — | (214 | ) | 14,754 | |||||||||||||
Total other expenses | 89,198 | 20,233 | 21,226 | 10,068 | 889 | 141,614 | ||||||||||||||
Income (loss) before benefit from income taxes | $ | 25,639 | $ | 14,001 | $ | (47,314 | ) | $ | 3,835 | $ | (6,795 | ) | $ | (10,634 | ) | |||||
Assets | $ | 2,579,000 | $ | 1,013,908 | $ | 9,364,481 | $ | 2,380,616 | $ | (742,543 | ) | $ | 14,595,462 |
Prior_Period_Revisions_Tables
Prior Period Revisions (Tables) | 3 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
Prior Period Revisions | ' | |||||||||||||
Schedule of revised condensed consolidated financial statements | ' | |||||||||||||
Three Months Ended | ||||||||||||||
March 31, 2013 (Unaudited) | ||||||||||||||
(dollars in thousands) | As Reported | Out-of-Period | Adjustments | As Revised | ||||||||||
Interest income | $ | 409,797 | $ | — | $ | (1,280 | ) | $ | 408,517 | |||||
Interest expense | 227,101 | — | 3,205 | 230,306 | ||||||||||
Net interest income | 182,696 | — | (4,485 | ) | 178,211 | |||||||||
Provision for finance receivable losses | 96,085 | (1,323 | ) | (531 | ) | 94,231 | ||||||||
Net interest income after provision for finance receivable losses | 86,611 | 1,323 | (3,954 | ) | 83,980 | |||||||||
Other revenues: | ||||||||||||||
Insurance | 32,900 | — | — | 32,900 | ||||||||||
Investment | 7,880 | — | 958 | 8,838 | ||||||||||
Other | 5,262 | — | — | 5,262 | ||||||||||
Total other revenues | 46,042 | — | 958 | 47,000 | ||||||||||
Other expenses: | ||||||||||||||
Operating expenses: | ||||||||||||||
Salaries and benefits | 77,898 | — | — | 77,898 | ||||||||||
Other operating expenses | 48,962 | — | — | 48,962 | ||||||||||
Insurance losses and loss adjustment expenses | 14,754 | — | — | 14,754 | ||||||||||
Total other expenses | 141,614 | — | — | 141,614 | ||||||||||
Loss before benefit from income taxes | (8,961 | ) | 1,323 | (2,996 | ) | (10,634 | ) | |||||||
Benefit from income taxes | (1,546 | ) | (696 | ) | (1,108 | ) | (3,350 | ) | ||||||
Net loss | $ | (7,415 | ) | $ | 2,019 | $ | (1,888 | ) | $ | (7,284 | ) | |||
Three Months Ended | ||||||||||||||
March 31, 2013 | ||||||||||||||
(Unaudited) | ||||||||||||||
(dollars in thousands) | As Reported | As Revised | ||||||||||||
Net loss | $ | (7,415 | ) | $ | (7,284 | ) | ||||||||
Other comprehensive income: | ||||||||||||||
Net unrealized losses on: | ||||||||||||||
Investment securities on which other-than-temporary impairments were taken | (23 | ) | (23 | ) | ||||||||||
All other investment securities | (94 | ) | (1,101 | ) | ||||||||||
Foreign currency translation adjustments | 2,114 | 2,114 | ||||||||||||
Income tax effect: | ||||||||||||||
Net unrealized losses on: | ||||||||||||||
Investment securities on which other-than-temporary impairments were taken | 8 | 8 | ||||||||||||
All other investment securities | 33 | 396 | ||||||||||||
Other comprehensive income, net of tax, before reclassification adjustments | 2,038 | 1,394 | ||||||||||||
Reclassification adjustments included in net loss: | ||||||||||||||
Net realized losses on investment securities | 29 | 77 | ||||||||||||
Cash flow hedges | (160 | ) | (160 | ) | ||||||||||
Income tax effect: | ||||||||||||||
Net realized losses on investment securities | (10 | ) | (27 | ) | ||||||||||
Cash flow hedges | 56 | 56 | ||||||||||||
Reclassification adjustments included in net loss, net of tax | (85 | ) | (54 | ) | ||||||||||
Other comprehensive income, net of tax | 1,953 | 1,340 | ||||||||||||
Comprehensive loss | $ | (5,462 | ) | $ | (5,944 | ) | ||||||||
Three Months Ended | ||||||||||||||
March 31, 2013 (Unaudited) | ||||||||||||||
(dollars in thousands) | As Reported | As Revised | ||||||||||||
Cash flows from operating activities | ||||||||||||||
Net loss | $ | (7,415 | ) | $ | (7,284 | ) | ||||||||
Reconciling adjustments: | ||||||||||||||
Provision for finance receivable losses | 96,085 | 94,231 | ||||||||||||
Depreciation and amortization | 17,185 | 21,671 | ||||||||||||
Deferral of finance receivable origination costs | (12,006 | ) | — | |||||||||||
Deferred income tax benefit | (32,408 | ) | (14,370 | ) | ||||||||||
Writedowns and net loss on sales of real estate owned | 935 | 935 | ||||||||||||
Other | 29 | 29 | ||||||||||||
Cash flows due to changes in: | ||||||||||||||
Other assets and other liabilities | 40,140 | 41,503 | ||||||||||||
Insurance claims and policyholder liabilities | (3,288 | ) | (3,288 | ) | ||||||||||
Taxes receivable and payable | 29,650 | 9,891 | ||||||||||||
Accrued interest and finance charges | 4,722 | (8,163 | ) | |||||||||||
Restricted cash | (1,177 | ) | (1,177 | ) | ||||||||||
Other, net | 304 | 307 | ||||||||||||
Net cash provided by operating activities | 132,756 | 134,285 | ||||||||||||
Cash flows from investing activities | ||||||||||||||
Finance receivables originated or purchased, net of deferred origination costs | (430,617 | ) | (442,623 | ) | ||||||||||
Principal collections on finance receivables | 652,792 | 665,677 | ||||||||||||
Available-for-sale investment securities purchased | (20,411 | ) | (19,429 | ) | ||||||||||
Trading investment securities purchased | — | (982 | ) | |||||||||||
Available-for-sale investment securities called, sold, and matured | 48,401 | 47,316 | ||||||||||||
Trading investment securities called, sold, and matured | — | 1,085 | ||||||||||||
Change in notes receivable from parent and affiliate | (30,750 | ) | (30,750 | ) | ||||||||||
Change in restricted cash | (63,926 | ) | (63,926 | ) | ||||||||||
Proceeds from sale of real estate owned | 35,573 | 35,573 | ||||||||||||
Other, net | (546 | ) | (546 | ) | ||||||||||
Net cash provided by investing activities | 190,516 | 191,395 | ||||||||||||
Cash flows from financing activities | ||||||||||||||
Proceeds from issuance of long-term debt, net of commissions | 564,567 | 562,159 | ||||||||||||
Repayment of long-term debt | (645,149 | ) | (645,149 | ) | ||||||||||
Capital contributions from parent | 10,500 | 10,500 | ||||||||||||
Net cash used for financing activities | (70,082 | ) | (72,490 | ) | ||||||||||
Effect of exchange rate changes | (1,700 | ) | (1,700 | ) | ||||||||||
Net change in cash and cash equivalents | 251,490 | 251,490 | ||||||||||||
Cash and cash equivalents at beginning of period | 1,357,212 | 1,357,212 | ||||||||||||
Cash and cash equivalents at end of period | $ | 1,608,702 | $ | 1,608,702 |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 3 Months Ended | ||||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||||
Fair Value Measurements | ' | ||||||||||||||||||||||
Schedule of fair values and carrying values of financial instruments and fair value hierarchy based on the level of inputs utilized to determine such fair value | ' | ||||||||||||||||||||||
Total | Total | ||||||||||||||||||||||
Fair Value Measurements Using | Fair | Carrying | |||||||||||||||||||||
(dollars in thousands) | Level 1 | Level 2 | Level 3 | Value | Value | ||||||||||||||||||
March 31, 2014 | |||||||||||||||||||||||
Assets | |||||||||||||||||||||||
Cash and cash equivalents | $ | 719,032 | $ | — | $ | — | $ | 719,032 | $ | 719,032 | |||||||||||||
Investment securities | — | 587,708 | 20,752 | 608,460 | 608,460 | ||||||||||||||||||
Net finance receivables, less allowance for finance receivable losses | — | — | 10,331,405 | 10,331,405 | 9,760,652 | ||||||||||||||||||
Note receivable from parent | — | 167,989 | — | 167,989 | 167,989 | ||||||||||||||||||
Restricted cash | 341,480 | — | — | 341,480 | 341,480 | ||||||||||||||||||
Other assets: | |||||||||||||||||||||||
Commercial mortgage loans | — | — | 94,573 | 94,573 | 101,403 | ||||||||||||||||||
Escrow advance receivable | — | — | 21,191 | 21,191 | 21,191 | ||||||||||||||||||
Receivable from parent and affiliates | — | 40,120 | — | 40,120 | 40,120 | ||||||||||||||||||
Liabilities | |||||||||||||||||||||||
Long-term debt | $ | — | $ | 10,942,078 | $ | — | $ | 10,942,078 | $ | 9,810,291 | |||||||||||||
Payable to parent and affiliates | — | 43,206 | — | 43,206 | 43,206 | ||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||
Assets | |||||||||||||||||||||||
Cash and cash equivalents | $ | 374,835 | $ | — | $ | — | $ | 374,835 | $ | 374,835 | |||||||||||||
Investment securities | — | 531,997 | 23,617 | 555,614 | 555,614 | ||||||||||||||||||
Net finance receivables, less allowance for finance receivable losses | — | — | 11,113,980 | 11,113,980 | 10,811,664 | ||||||||||||||||||
Note receivable from parent | — | 167,989 | — | 167,989 | 167,989 | ||||||||||||||||||
Restricted cash | 358,759 | — | — | 358,759 | 358,759 | ||||||||||||||||||
Other assets: | |||||||||||||||||||||||
Commercial mortgage loans | — | — | 94,681 | 94,681 | 102,200 | ||||||||||||||||||
Escrow advance receivable | — | — | 23,527 | 23,527 | 23,527 | ||||||||||||||||||
Receivable from parent and affiliates | — | 39,364 | — | 39,364 | 39,364 | ||||||||||||||||||
Liabilities | |||||||||||||||||||||||
Long-term debt | $ | — | $ | 11,776,576 | $ | — | $ | 11,776,576 | $ | 10,640,728 | |||||||||||||
Payable to parent and affiliates | — | 38,463 | — | 38,463 | 38,463 | ||||||||||||||||||
Schedule of information about assets and liabilities measured at fair value on a recurring basis and the fair value hierarchy based on the levels of inputs utilized to determine such fair value | ' | ||||||||||||||||||||||
Fair Value Measurements Using | Total Carried | ||||||||||||||||||||||
(dollars in thousands) | Level 1 | Level 2 | Level 3 | At Fair Value | |||||||||||||||||||
March 31, 2014 | |||||||||||||||||||||||
Assets | |||||||||||||||||||||||
Cash and cash equivalents in mutual funds | $ | 153,565 | $ | — | $ | — | $ | 153,565 | |||||||||||||||
Investment securities: | |||||||||||||||||||||||
Available-for-sale securities: | |||||||||||||||||||||||
Bonds: | |||||||||||||||||||||||
U.S. government and government sponsored entities | — | 61,979 | — | 61,979 | |||||||||||||||||||
Obligations of states, municipalities, and political subdivisions | — | 111,254 | — | 111,254 | |||||||||||||||||||
Corporate debt | — | 260,363 | 8,654 | 269,017 | |||||||||||||||||||
RMBS | — | 69,203 | 81 | 69,284 | |||||||||||||||||||
CMBS | — | 22,127 | 7 | 22,134 | |||||||||||||||||||
CDO/ABS | — | 3,145 | 800 | 3,945 | |||||||||||||||||||
Total | — | 528,071 | 9,542 | 537,613 | |||||||||||||||||||
Preferred stock | — | 7,197 | — | 7,197 | |||||||||||||||||||
Other long-term investments (a) | — | — | 1,269 | 1,269 | |||||||||||||||||||
Total available-for-sale securities (b) | — | 535,268 | 10,811 | 546,079 | |||||||||||||||||||
Trading securities: | |||||||||||||||||||||||
Bonds: | |||||||||||||||||||||||
Corporate debt | — | 1,758 | — | 1,758 | |||||||||||||||||||
RMBS | — | 9,032 | 1,219 | 10,251 | |||||||||||||||||||
CMBS | — | 39,788 | — | 39,788 | |||||||||||||||||||
CDO/ABS | — | 1,862 | 7,276 | 9,138 | |||||||||||||||||||
Total trading securities | — | 52,440 | 8,495 | 60,935 | |||||||||||||||||||
Total investment securities | — | 587,708 | 19,306 | 607,014 | |||||||||||||||||||
Restricted cash in mutual funds | 315,306 | — | — | 315,306 | |||||||||||||||||||
Total | $ | 468,871 | $ | 587,708 | $ | 19,306 | $ | 1,075,885 | |||||||||||||||
December 31, 2013 | |||||||||||||||||||||||
Assets | |||||||||||||||||||||||
Cash and cash equivalents in mutual funds | $ | 185,829 | $ | — | $ | — | $ | 185,829 | |||||||||||||||
Investment securities: | |||||||||||||||||||||||
Available-for-sale securities: | |||||||||||||||||||||||
Bonds: | |||||||||||||||||||||||
U.S. government and government sponsored entities | — | 58,633 | — | 58,633 | |||||||||||||||||||
Obligations of states, municipalities, and political subdivisions | — | 102,745 | — | 102,745 | |||||||||||||||||||
Corporate debt | — | 225,312 | 12,604 | 237,916 | |||||||||||||||||||
RMBS | — | 82,510 | 113 | 82,623 | |||||||||||||||||||
CMBS | — | 7,545 | 2 | 7,547 | |||||||||||||||||||
CDO/ABS | — | 3,176 | 800 | 3,976 | |||||||||||||||||||
Total | — | 479,921 | 13,519 | 493,440 | |||||||||||||||||||
Preferred stock | — | 7,805 | — | 7,805 | |||||||||||||||||||
Other long-term investments (a) | — | — | 1,269 | 1,269 | |||||||||||||||||||
Total available-for-sale securities (b) | — | 487,726 | 14,788 | 502,514 | |||||||||||||||||||
Trading securities: | |||||||||||||||||||||||
Bonds: | |||||||||||||||||||||||
Corporate debt | — | 1,837 | — | 1,837 | |||||||||||||||||||
RMBS | — | 10,671 | — | 10,671 | |||||||||||||||||||
CMBS | — | 29,897 | — | 29,897 | |||||||||||||||||||
CDO/ABS | — | 1,866 | 7,383 | 9,249 | |||||||||||||||||||
Total trading securities | — | 44,271 | 7,383 | 51,654 | |||||||||||||||||||
Total investment securities | — | 531,997 | 22,171 | 554,168 | |||||||||||||||||||
Restricted cash in mutual funds | 321,617 | — | — | 321,617 | |||||||||||||||||||
Total | $ | 507,446 | $ | 531,997 | $ | 22,171 | $ | 1,061,614 | |||||||||||||||
(a) Other long-term investments excludes our interest in a limited partnership of $0.6 million at March 31, 2014 and December 31, 2013 that we account for using the equity method. | |||||||||||||||||||||||
(b) Common stocks not carried at fair value totaled $0.9 million at March 31, 2014 and December 31, 2013 and therefore have been excluded from the table above. | |||||||||||||||||||||||
Schedule of changes in Level 3 assets and liabilities measured at fair value on a recurring basis | ' | ||||||||||||||||||||||
Net gains (losses) included in: | Purchases, | ||||||||||||||||||||||
sales, | |||||||||||||||||||||||
Balance at | Other | issues, | Transfers | Transfers | Balance | ||||||||||||||||||
beginning | Other | comprehensive | settlements | into | out of | at end of | |||||||||||||||||
(dollars in thousands) | of period | revenues | income (loss) | (a) | Level 3 (b) | Level 3 | period | ||||||||||||||||
Three Months Ended March 31, 2014 | |||||||||||||||||||||||
Investment securities: | |||||||||||||||||||||||
Available-for-sale securities: | |||||||||||||||||||||||
Bonds: | |||||||||||||||||||||||
Corporate debt | $ | 12,604 | $ | 254 | $ | (311 | ) | $ | (3,893 | ) | $ | — | $ | — | $ | 8,654 | |||||||
RMBS | 113 | (7 | ) | (25 | ) | — | — | — | 81 | ||||||||||||||
CMBS | 2 | — | 5 | — | — | — | 7 | ||||||||||||||||
CDO/ABS | 800 | — | — | — | — | — | 800 | ||||||||||||||||
Total | 13,519 | 247 | (331 | ) | (3,893 | ) | — | — | 9,542 | ||||||||||||||
Other long-term investments | 1,269 | — | — | — | — | — | 1,269 | ||||||||||||||||
Total available-for-sale securities | 14,788 | 247 | (331 | ) | (3,893 | ) | — | — | 10,811 | ||||||||||||||
Trading securities: | |||||||||||||||||||||||
Bonds: | |||||||||||||||||||||||
RMBS | — | 14 | — | (36 | ) | 1,241 | — | 1,219 | |||||||||||||||
CDO/ABS | 7,383 | 8 | — | (115 | ) | 7,276 | |||||||||||||||||
Total trading securities | 7,383 | 22 | — | (151 | ) | 1,241 | — | 8,495 | |||||||||||||||
Total | $ | 22,171 | $ | 269 | $ | (331 | ) | $ | (4,044 | ) | $ | 1,241 | $ | — | $ | 19,306 | |||||||
(a) “Purchases, sales, issues, and settlements” column only consist of settlements. There were no purchases, sales, or issues of investment securities for the three months ended March 31, 2014. | |||||||||||||||||||||||
(b) During the three months ended March 31, 2014, we transferred $1.2 million of RMBS securities into Level 3 primarily due to lesser pricing transparency resulting in using broker pricing, whereas vendor pricing had previously been used. | |||||||||||||||||||||||
Purchases, | |||||||||||||||||||||||
Net gains (losses) included in: | sales, | ||||||||||||||||||||||
Balance at | Other | issues, | Transfers | Transfers | Balance | ||||||||||||||||||
beginning | Other | comprehensive | settlements | into | out of | at end of | |||||||||||||||||
(dollars in thousands) | of period | revenues | income (loss) | * | Level 3 | Level 3 | period | ||||||||||||||||
Three Months Ended March 31, 2013 - Revised | |||||||||||||||||||||||
Investment securities: | |||||||||||||||||||||||
Available-for-sale securities: | |||||||||||||||||||||||
Bonds: | |||||||||||||||||||||||
Corporate debt | $ | 13,417 | $ | (168 | ) | $ | 509 | $ | 119 | $ | — | $ | — | $ | 13,877 | ||||||||
RMBS | 74 | (34 | ) | 25 | — | — | — | 65 | |||||||||||||||
CMBS | 153 | (8 | ) | 6 | (149 | ) | — | — | 2 | ||||||||||||||
CDO/ABS | 1,200 | — | — | (100 | ) | — | — | 1,100 | |||||||||||||||
Total | 14,844 | (210 | ) | 540 | (130 | ) | — | — | 15,044 | ||||||||||||||
Other long-term investments | 1,380 | — | (40 | ) | — | — | — | 1,340 | |||||||||||||||
Total available-for-sale securities | 16,224 | (210 | ) | 500 | (130 | ) | — | — | 16,384 | ||||||||||||||
Trading securities: | |||||||||||||||||||||||
Bonds: | |||||||||||||||||||||||
CDO/ABS | 12,192 | 3 | — | (122 | ) | — | — | 12,073 | |||||||||||||||
Total | $ | 28,416 | $ | (207 | ) | $ | 500 | $ | (252 | ) | $ | — | $ | — | $ | 28,457 | |||||||
* “Purchases, sales, issues, and settlements” column only consist of settlements. There were no purchases, sales, or issues of investment securities for the three months ended March 31, 2013. | |||||||||||||||||||||||
Quantitative information about Level 3 inputs for assets measured on a recurring basis | ' | ||||||||||||||||||||||
Range (Weighted Average) | |||||||||||||||||||||||
Valuation Technique(s) | Unobservable Input | March 31, 2014 | December 31, 2013 | ||||||||||||||||||||
Corporate debt | Discounted cash flows | Yield | 2.83% – 2.89% (2.86%) | 2.68% – 8.48% (4.67%) | |||||||||||||||||||
Other long-term investments | Discounted cash flows and indicative valuations | Historical costs | N/A* | N/A* | |||||||||||||||||||
Nature of investment | |||||||||||||||||||||||
Local market conditions | |||||||||||||||||||||||
Comparables | |||||||||||||||||||||||
Operating performance | |||||||||||||||||||||||
Recent financing activity | |||||||||||||||||||||||
* Not applicable. | |||||||||||||||||||||||
Schedule of assets measured at fair value on a non-recurring basis on which impairment charges were recorded | ' | ||||||||||||||||||||||
Fair Value Measurements Using | |||||||||||||||||||||||
(dollars in thousands) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
March 31, 2014 | |||||||||||||||||||||||
Assets | |||||||||||||||||||||||
Real estate owned | $ | — | $ | — | $ | 49,982 | $ | 49,982 | |||||||||||||||
Commercial mortgage loans | — | — | 11,933 | 11,933 | |||||||||||||||||||
Total | $ | — | $ | — | $ | 61,915 | $ | 61,915 | |||||||||||||||
December 31, 2013 | |||||||||||||||||||||||
Assets | |||||||||||||||||||||||
Real estate owned | $ | — | $ | — | $ | 71,469 | $ | 71,469 | |||||||||||||||
Commercial mortgage loans | — | — | 11,935 | 11,935 | |||||||||||||||||||
Total | $ | — | $ | — | $ | 83,404 | $ | 83,404 | |||||||||||||||
Schedule of net impairment charges recorded on assets measured at fair value on a non-recurring basis | ' | ||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Three Months Ended March 31, | 2014 | 2013 | |||||||||||||||||||||
Assets | |||||||||||||||||||||||
Real estate owned | $ | 5,931 | $ | 7,880 | |||||||||||||||||||
Commercial mortgage loans | (50 | ) | (128 | ) | |||||||||||||||||||
Total | $ | 5,881 | $ | 7,752 | |||||||||||||||||||
Quantitative information about Level 3 inputs for assets measured on a nonrecurring basis | ' | ||||||||||||||||||||||
Range (Weighted Average) | |||||||||||||||||||||||
Valuation Technique(s) | Unobservable Input | March 31, 2014 | December 31, 2013 | ||||||||||||||||||||
Real estate owned | Market approach | Third-party valuation | N/A* | N/A* | |||||||||||||||||||
Commercial mortgage loans | Market approach | Local market conditions | N/A* | N/A* | |||||||||||||||||||
Nature of investment | |||||||||||||||||||||||
Comparable property sales | |||||||||||||||||||||||
Operating performance | |||||||||||||||||||||||
* Not applicable. |
Business_and_Summary_of_Signif2
Business and Summary of Significant Accounting Policies (Details) (Springleaf Financial Holdings, LLC) | Mar. 31, 2014 |
Springleaf Financial Holdings, LLC | ' |
Business and summary of significant accounting policies | ' |
Percent of common stock held by related party | 75.00% |
Business_and_Summary_of_Signif3
Business and Summary of Significant Accounting Policies (Details 2) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Jul. 30, 2009 | Dec. 31, 2013 |
Real Estate Loans | Real Estate Loans | Real Estate Loans | Real Estate Loans | Consolidated VIEs | Consolidated VIEs | Consolidated VIEs | Consolidated VIEs | Overstatement corrected in this report | |||||
Mortgage Loan Securitizations | Mortgage Loan Securitizations | Consolidated VIEs | |||||||||||
2009-1 Trust | 2009-1 Trust | ||||||||||||
Real Estate Loans | Real Estate Loans | ||||||||||||
Business and summary of significant accounting policies | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Allowance for finance receivable losses | $364,303,000 | $332,195,000 | $210,560,000 | $182,701,000 | $259,826,000 | $236,032,000 | $150,990,000 | $113,861,000 | $153,873,000 | $153,084,000 | ' | ' | $26,800,000 |
Amount of notes sold under private securitization | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,200,000,000 | ' |
Notes initially retained by the entity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 786,300,000 | ' |
Amount of loans sold | ' | ' | ' | ' | $93,300,000 | ' | ' | ' | ' | ' | $742,000,000 | ' | ' |
Finance_Receivables_Details
Finance Receivables (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 |
Consolidated VIEs | Consolidated VIEs | Personal loans | Personal loans | Personal loans | Personal loans | Personal loans | Personal loans | Real Estate Loans | Real Estate Loans | Real Estate Loans | Real Estate Loans | Retail Sales Finance | Retail Sales Finance | Maximum | Maximum | Maximum | |||
Consumer Loan Securitizations | Consumer Loan Securitizations | Titled personal property | Consumer household goods or other items of personal property | Mortgage Loan Securitizations | Mortgage Loan Securitizations | Personal loans | Real Estate Loans | Retail Sales Finance | |||||||||||
Consolidated VIEs | Consolidated VIEs | Consolidated VIEs | Consolidated VIEs | ||||||||||||||||
Finance Receivables | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount of receivable secured by personal property | ' | ' | ' | ' | ' | ' | ' | ' | $1,400,000,000 | $1,300,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of net finance receivables secured by the real and/or personal property of the borrower | ' | ' | ' | ' | ' | ' | ' | ' | 45.00% | 40.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Original term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '4 years | '360 months | '60 months |
Gross receivables | 10,578,029,000 | 11,584,706,000 | ' | ' | 3,648,089,000 | 3,632,462,000 | ' | ' | ' | ' | 6,839,784,000 | 7,843,787,000 | ' | ' | 90,156,000 | 108,457,000 | ' | ' | ' |
Unearned finance charges and points and fees | -571,303,000 | -571,554,000 | ' | ' | -561,750,000 | -559,902,000 | ' | ' | ' | ' | -917,000 | -1,208,000 | ' | ' | -8,636,000 | -10,444,000 | ' | ' | ' |
Accrued finance charges | 79,931,000 | 91,069,000 | ' | ' | 44,273,000 | 48,008,000 | ' | ' | ' | ' | 34,981,000 | 42,163,000 | ' | ' | 677,000 | 898,000 | ' | ' | ' |
Deferred origination costs | 38,298,000 | 39,638,000 | ' | ' | 38,031,000 | 39,364,000 | ' | ' | ' | ' | 267,000 | 274,000 | ' | ' | ' | ' | ' | ' | ' |
Net finance receivables | 10,124,955,000 | 11,143,859,000 | ' | ' | 3,168,643,000 | 3,159,932,000 | 1,758,946,000 | 1,572,070,000 | ' | ' | 6,874,115,000 | 7,885,016,000 | 4,718,033,000 | 5,595,150,000 | 82,197,000 | 98,911,000 | ' | ' | ' |
Finance receivables pledged as collateral for secured term loan | ' | 1,000,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-term debt | $9,810,291,000 | $10,640,728,000 | $5,061,864,000 | $5,160,227,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Finance_Receivables_Details_2
Finance Receivables (Details 2) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Financing receivable general information | ' | ' |
Unused credit lines | $33,011 | $37,334 |
Personal Loans | ' | ' |
Financing receivable general information | ' | ' |
Unused credit lines | 2,384 | 4,996 |
Real Estate Loans | ' | ' |
Financing receivable general information | ' | ' |
Unused credit lines | $30,627 | $32,338 |
Finance_Receivables_Details_3
Finance Receivables (Details 3) (Revolving Retail, USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Dec. 31, 2013 |
Revolving Retail | ' | ' |
CREDIT QUALITY INDICATORS | ' | ' |
Accrual of finance charges, past due period | '180 days | ' |
Finance receivables more than 90 days past due | $0.30 | $0.40 |
Finance_Receivables_Details_4
Finance Receivables (Details 4) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Net finance receivables: | ' | ' |
60-89 days past due | $118,464 | $126,365 |
90-119 days past due | 72,563 | 91,631 |
120-149 days past due | 66,476 | 74,301 |
150-179 days past due | 56,780 | 60,398 |
180 days or more past due | 329,432 | 354,110 |
Total delinquent finance receivables | 643,715 | 706,805 |
Current | 9,266,025 | 10,211,660 |
30-59 days past due | 215,215 | 225,394 |
Net finance receivables | 10,124,955 | 11,143,859 |
Personal loans | ' | ' |
Net finance receivables: | ' | ' |
60-89 days past due | 22,379 | 28,297 |
90-119 days past due | 20,018 | 22,648 |
120-149 days past due | 18,789 | 18,662 |
150-179 days past due | 16,741 | 14,618 |
180 days or more past due | 1,926 | 934 |
Total delinquent finance receivables | 79,853 | 85,159 |
Current | 3,051,293 | 3,027,460 |
30-59 days past due | 37,497 | 47,313 |
Net finance receivables | 3,168,643 | 3,159,932 |
Real Estate Loans | ' | ' |
Net finance receivables: | ' | ' |
60-89 days past due | 95,196 | 96,778 |
90-119 days past due | 51,880 | 67,966 |
120-149 days past due | 46,864 | 54,882 |
150-179 days past due | 39,484 | 45,040 |
180 days or more past due | 327,272 | 353,003 |
Total delinquent finance receivables | 560,696 | 617,669 |
Current | 6,137,205 | 7,092,107 |
30-59 days past due | 176,214 | 175,240 |
Net finance receivables | 6,874,115 | 7,885,016 |
Retail Sales Finance | ' | ' |
Net finance receivables: | ' | ' |
60-89 days past due | 889 | 1,290 |
90-119 days past due | 665 | 1,017 |
120-149 days past due | 823 | 757 |
150-179 days past due | 555 | 740 |
180 days or more past due | 234 | 173 |
Total delinquent finance receivables | 3,166 | 3,977 |
Current | 77,527 | 92,093 |
30-59 days past due | 1,504 | 2,841 |
Net finance receivables | $82,197 | $98,911 |
Finance_Receivables_Details_5
Finance Receivables (Details 5) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Performing and nonperforming net finance receivables by type | ' | ' |
Net finance receivables due | $10,124,955 | $11,143,859 |
Personal loans | ' | ' |
Performing and nonperforming net finance receivables by type | ' | ' |
Net finance receivables due | 3,168,643 | 3,159,932 |
Real Estate Loans | ' | ' |
Performing and nonperforming net finance receivables by type | ' | ' |
Net finance receivables due | 6,874,115 | 7,885,016 |
Retail Sales Finance | ' | ' |
Performing and nonperforming net finance receivables by type | ' | ' |
Net finance receivables due | 82,197 | 98,911 |
Performing | ' | ' |
Performing and nonperforming net finance receivables by type | ' | ' |
Net finance receivables due | 9,599,704 | 10,563,419 |
Performing | Personal loans | ' | ' |
Performing and nonperforming net finance receivables by type | ' | ' |
Net finance receivables due | 3,111,169 | 3,103,070 |
Performing | Real Estate Loans | ' | ' |
Performing and nonperforming net finance receivables by type | ' | ' |
Net finance receivables due | 6,408,615 | 7,364,125 |
Performing | Retail Sales Finance | ' | ' |
Performing and nonperforming net finance receivables by type | ' | ' |
Net finance receivables due | 79,920 | 96,224 |
Nonperforming | ' | ' |
Performing and nonperforming net finance receivables by type | ' | ' |
Net finance receivables due | 525,251 | 580,440 |
Nonperforming | Personal loans | ' | ' |
Performing and nonperforming net finance receivables by type | ' | ' |
Net finance receivables due | 57,474 | 56,862 |
Nonperforming | Real Estate Loans | ' | ' |
Performing and nonperforming net finance receivables by type | ' | ' |
Net finance receivables due | 465,500 | 520,891 |
Nonperforming | Retail Sales Finance | ' | ' |
Performing and nonperforming net finance receivables by type | ' | ' |
Net finance receivables due | $2,277 | $2,687 |
Finance_Receivables_Details_6
Finance Receivables (Details 6) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Finance Receivables | ' | ' |
Carrying amount, net of allowance | $1,104,919 | $1,250,621 |
Outstanding balance | 1,584,251 | 1,782,271 |
Allowance for purchased credit impaired finance receivable losses | $64,863 | $57,261 |
Finance_Receivables_Details_7
Finance Receivables (Details 7) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Changes in accretable yield for purchased credit impaired finance receivables | ' | ' |
Balance at beginning of period | $766,927 | $624,879 |
Accretion | -28,832 | -32,831 |
Transfers to finance receivables held for sale | -56,631 | ' |
Disposals | -5,477 | -7,128 |
Balance at end of period | $675,987 | $584,920 |
Finance_Receivables_Details_8
Finance Receivables (Details 8) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
TDR FINANCE RECEIVABLES | ' | ' |
TDR net finance receivables | $1,346,901 | $1,371,321 |
Amount of commitments to lend additional funds on TDR finance receivables | 0 | ' |
Real Estate Loans | ' | ' |
TDR FINANCE RECEIVABLES | ' | ' |
TDR gross finance receivables | 1,341,868 | 1,366,346 |
TDR net finance receivables | 1,346,901 | 1,371,321 |
Allowance for TDR finance receivable losses | $192,909 | $177,011 |
Finance_Receivables_Details_9
Finance Receivables (Details 9) (Real Estate Loans, USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
account | account | |
Real Estate Loans | ' | ' |
TDR average net receivables and finance charges recognized on TDR finance receivables | ' | ' |
TDR average net receivables | $1,412,808 | $905,128 |
TDR finance charges recognized | 17,593 | 14,910 |
New volume of the TDR finance receivables | ' | ' |
Number of TDR accounts | 988 | 2,048 |
Pre-modification TDR net finance receivables | 102,371 | 164,116 |
Post-modification TDR net finance receivables | 93,361 | 171,567 |
Number of TDR accounts, with subsequent default | 229 | 224 |
TDR net finance receivables, with subsequent default | $15,503 | $18,250 |
Allowance_for_Finance_Receivab2
Allowance for Finance Receivable Losses (Details) (USD $) | 3 Months Ended | 3 Months Ended | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2013 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | |
Consolidated VIEs | Consolidated VIEs | Adjustments | Adjustments | Personal loans | Personal loans | Personal loans | Real Estate Loans | Real Estate Loans | Real Estate Loans | Real Estate Loans | Real Estate Loans | Real Estate Loans | Real Estate Loans | Real Estate Loans | Retail Sales Finance | Retail Sales Finance | |||
Consolidated VIEs | Change in charge-off policy | Non-credit impaired finance receivables | Non-credit impaired finance receivables | Purchased credit impaired finance receivables | Purchased credit impaired finance receivables | TDR finance receivables | TDR finance receivables | ||||||||||||
Adjustments | |||||||||||||||||||
Changes in the allowance for finance receivable losses by finance receivable type | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance at beginning of period | $332,195,000 | $182,701,000 | $153,873,000 | $153,084,000 | ' | $26,800,000 | $94,323,000 | $66,580,000 | ' | $236,032,000 | $113,861,000 | ' | ' | ' | ' | ' | ' | $1,840,000 | $2,260,000 |
Provision for finance receivable losses | 107,012,000 | 94,231,000 | ' | ' | -531,000 | ' | 46,893,000 | 25,021,000 | ' | 57,953,000 | 68,820,000 | 12,906,000 | 19,551,000 | 19,991,000 | 22,022,000 | 25,056,000 | 27,247,000 | 2,166,000 | 390,000 |
Charge-offs | -73,302,000 | -80,223,000 | ' | ' | ' | ' | -44,107,000 | -42,769,000 | -13,300,000 | -27,590,000 | -34,127,000 | ' | ' | ' | ' | ' | ' | -1,605,000 | -3,327,000 |
Recoveries | 8,482,000 | 13,851,000 | ' | ' | ' | ' | 4,678,000 | 9,088,000 | ' | 3,515,000 | 2,436,000 | ' | ' | ' | ' | ' | ' | 289,000 | 2,327,000 |
Transfers to finance receivables held for sale | -10,084,000 | ' | ' | ' | ' | ' | ' | ' | ' | -10,084,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance at end of period | 364,303,000 | 210,560,000 | 153,873,000 | 153,084,000 | ' | 26,800,000 | 101,787,000 | 57,920,000 | ' | 259,826,000 | 150,990,000 | ' | ' | ' | ' | ' | ' | 2,690,000 | 1,650,000 |
Recoveries resulting from sale of previously charged-off finance receivables and settlement of claims | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Adjustment for the subsequent buyback of previously charged-off finance receivables sold | ' | ' | ' | ' | ' | ' | ' | ' | ' | 200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Transfers to finance receivables held for sale which have a specific allowance | 835,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of days past due before which a loan is charged off to the allowance for finance receivable losses | ' | ' | ' | ' | ' | ' | ' | ' | '180 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum percentage of original loan amount to be received before charge-off (as a percent) | ' | ' | ' | ' | ' | ' | ' | 5.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Carrying amount charged-off for purchased credit impaired loans | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Purchased credit impaired finance receivables | ' | ' | ' | ' | ' | ' | ' | ' | ' | $6,426,000 | $9,850,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Allowance_for_Finance_Receivab3
Allowance for Finance Receivable Losses (Details 2) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||||
Allowance for finance receivable losses for finance receivables: | ' | ' | ' | ' |
Collectively evaluated for impairment | $106,531 | $97,923 | ' | ' |
Acquired with deteriorated credit quality (purchased credit impaired finance receivables) | 64,863 | 57,261 | ' | ' |
Individually evaluated for impairment (TDR finance receivables) | 192,909 | 177,011 | ' | ' |
Total | 364,303 | 332,195 | 210,560 | 182,701 |
Finance receivables: | ' | ' | ' | ' |
Collectively evaluated for impairment | 7,608,272 | 8,464,656 | ' | ' |
Purchased credit impaired finance receivables | 1,169,782 | 1,307,882 | ' | ' |
TDR finance receivables | 1,346,901 | 1,371,321 | ' | ' |
Net finance receivables | 10,124,955 | 11,143,859 | ' | ' |
Personal loans | ' | ' | ' | ' |
Allowance for finance receivable losses for finance receivables: | ' | ' | ' | ' |
Collectively evaluated for impairment | 101,787 | 94,323 | ' | ' |
Total | 101,787 | 94,323 | 57,920 | 66,580 |
Finance receivables: | ' | ' | ' | ' |
Collectively evaluated for impairment | 3,168,643 | 3,159,932 | ' | ' |
Net finance receivables | 3,168,643 | 3,159,932 | ' | ' |
Real Estate Loans | ' | ' | ' | ' |
Allowance for finance receivable losses for finance receivables: | ' | ' | ' | ' |
Collectively evaluated for impairment | 2,054 | 1,760 | ' | ' |
Acquired with deteriorated credit quality (purchased credit impaired finance receivables) | 64,863 | 57,261 | ' | ' |
Individually evaluated for impairment (TDR finance receivables) | 192,909 | 177,011 | ' | ' |
Total | 259,826 | 236,032 | 150,990 | 113,861 |
Finance receivables: | ' | ' | ' | ' |
Collectively evaluated for impairment | 4,357,432 | 5,205,813 | ' | ' |
Purchased credit impaired finance receivables | 1,169,782 | 1,307,882 | ' | ' |
TDR finance receivables | 1,346,901 | 1,371,321 | ' | ' |
Net finance receivables | 6,874,115 | 7,885,016 | ' | ' |
Retail Sales Finance | ' | ' | ' | ' |
Allowance for finance receivable losses for finance receivables: | ' | ' | ' | ' |
Collectively evaluated for impairment | 2,690 | 1,840 | ' | ' |
Total | 2,690 | 1,840 | 1,650 | 2,260 |
Finance receivables: | ' | ' | ' | ' |
Collectively evaluated for impairment | 82,197 | 98,911 | ' | ' |
Net finance receivables | $82,197 | $98,911 | ' | ' |
Finance_Receivables_Held_for_S2
Finance Receivables Held for Sale (Details) (USD $) | 0 Months Ended | 3 Months Ended | ||
Mar. 31, 2014 | Mar. 01, 2014 | Mar. 31, 2014 | Mar. 31, 2013 | |
item | item | loan | ||
Finance Receivables Held for Sale | ' | ' | ' | ' |
Finance receivables transferred from held for investment to held for sale | ' | $825,200,000 | ' | ' |
Carrying amount of finance receivable held-for-sale originated as held-for-investment that were sold | 835,300,000 | ' | ' | ' |
Net gain on sales of real estate loans and related trust assets | ' | ' | 55,186,000 | ' |
Number of loans reaching defined delinquency limits repurchased under loan sale agreement | ' | ' | ' | 15 |
Amount of loans reaching defined delinquency limits repurchased under loan sale agreement | ' | ' | ' | 2,300,000 |
Number of material unresolved recourse requests | 0 | ' | 0 | ' |
Activity in reserve for sales recourse obligations | ' | ' | ' | ' |
Balance at beginning of period | ' | ' | 4,702,000 | 4,863,000 |
Provision for/(reduction in) recourse obligations | ' | ' | ' | 322,000 |
Recourse losses | ' | ' | ' | -386,000 |
Balance at end of period | $4,702,000 | ' | $4,702,000 | $4,799,000 |
Investment_Securities_Details
Investment Securities (Details) (USD $) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2014 | Dec. 31, 2013 | |
Cost/amortized cost, unrealized gains and losses, and fair value of available-for-sale securities by type | ' | ' |
Cost/Amortized Cost | $532,503,000 | $496,658,000 |
Unrealized Gains | 16,751,000 | 10,412,000 |
Unrealized Losses | -2,325,000 | -3,706,000 |
Fair Value | 546,929,000 | 503,364,000 |
Interest in a limited partnership | 600,000 | 600,000 |
Available-for-sale securities with other-than-temporary impairments recognized in accumulated other comprehensive income or loss | 0 | 0 |
Bonds: | ' | ' |
Cost/amortized cost, unrealized gains and losses, and fair value of available-for-sale securities by type | ' | ' |
Cost/Amortized Cost | 523,190,000 | 486,570,000 |
Unrealized Gains | 16,622,000 | 10,412,000 |
Unrealized Losses | -2,199,000 | -3,542,000 |
Fair Value | 537,613,000 | 493,440,000 |
U.S. government and government sponsored entities | ' | ' |
Cost/amortized cost, unrealized gains and losses, and fair value of available-for-sale securities by type | ' | ' |
Cost/Amortized Cost | 60,226,000 | 58,748,000 |
Unrealized Gains | 2,062,000 | 565,000 |
Unrealized Losses | -309,000 | -680,000 |
Fair Value | 61,979,000 | 58,633,000 |
Obligations of states, municipalities, and political subdivisions | ' | ' |
Cost/amortized cost, unrealized gains and losses, and fair value of available-for-sale securities by type | ' | ' |
Cost/Amortized Cost | 109,111,000 | 101,118,000 |
Unrealized Gains | 2,235,000 | 1,703,000 |
Unrealized Losses | -92,000 | -76,000 |
Fair Value | 111,254,000 | 102,745,000 |
Corporate debt | ' | ' |
Cost/amortized cost, unrealized gains and losses, and fair value of available-for-sale securities by type | ' | ' |
Cost/Amortized Cost | 260,654,000 | 233,977,000 |
Unrealized Gains | 9,854,000 | 6,126,000 |
Unrealized Losses | -1,491,000 | -2,187,000 |
Fair Value | 269,017,000 | 237,916,000 |
RMBS | ' | ' |
Cost/amortized cost, unrealized gains and losses, and fair value of available-for-sale securities by type | ' | ' |
Cost/Amortized Cost | 67,371,000 | 81,259,000 |
Unrealized Gains | 2,193,000 | 1,923,000 |
Unrealized Losses | -280,000 | -559,000 |
Fair Value | 69,284,000 | 82,623,000 |
CMBS | ' | ' |
Cost/amortized cost, unrealized gains and losses, and fair value of available-for-sale securities by type | ' | ' |
Cost/Amortized Cost | 21,912,000 | 7,487,000 |
Unrealized Gains | 249,000 | 76,000 |
Unrealized Losses | -27,000 | -16,000 |
Fair Value | 22,134,000 | 7,547,000 |
CDO/ABS | ' | ' |
Cost/amortized cost, unrealized gains and losses, and fair value of available-for-sale securities by type | ' | ' |
Cost/Amortized Cost | 3,916,000 | 3,981,000 |
Unrealized Gains | 29,000 | 19,000 |
Unrealized Losses | ' | -24,000 |
Fair Value | 3,945,000 | 3,976,000 |
Preferred stocks | ' | ' |
Cost/amortized cost, unrealized gains and losses, and fair value of available-for-sale securities by type | ' | ' |
Cost/Amortized Cost | 7,068,000 | 7,844,000 |
Unrealized Gains | 129,000 | ' |
Unrealized Losses | ' | -39,000 |
Fair Value | 7,197,000 | 7,805,000 |
Other long-term investments | ' | ' |
Cost/amortized cost, unrealized gains and losses, and fair value of available-for-sale securities by type | ' | ' |
Cost/Amortized Cost | 1,395,000 | 1,394,000 |
Unrealized Losses | -126,000 | -125,000 |
Fair Value | 1,269,000 | 1,269,000 |
Common stocks | ' | ' |
Cost/amortized cost, unrealized gains and losses, and fair value of available-for-sale securities by type | ' | ' |
Cost/Amortized Cost | 850,000 | 850,000 |
Fair Value | $850,000 | $850,000 |
Investment_Securities_Details_
Investment Securities (Details 2) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 |
Fair Value | ' | ' | ' |
Less Than 12 Months | ' | $94,758 | $157,356 |
12 Months or Longer | ' | 7,634 | 11,772 |
Total | ' | 102,392 | 169,128 |
Unrealized Losses | ' | ' | ' |
Less Than 12 Months | ' | -1,776 | -3,054 |
12 Months or Longer | ' | -549 | -652 |
Total | ' | -2,325 | -3,706 |
Bonds: | ' | ' | ' |
Fair Value | ' | ' | ' |
Less Than 12 Months | ' | 94,758 | 148,282 |
12 Months or Longer | ' | 6,365 | 11,772 |
Total | ' | 101,123 | 160,054 |
Unrealized Losses | ' | ' | ' |
Less Than 12 Months | ' | -1,776 | -2,890 |
12 Months or Longer | ' | -423 | -652 |
Total | ' | -2,199 | -3,542 |
U.S. government and government sponsored entities | ' | ' | ' |
Fair Value | ' | ' | ' |
Less Than 12 Months | ' | 23,619 | 44,314 |
Total | ' | 23,619 | 44,314 |
Unrealized Losses | ' | ' | ' |
Less Than 12 Months | ' | -309 | -680 |
Total | ' | -309 | -680 |
Obligations of states, municipalities, and political subdivisions | ' | ' | ' |
Fair Value | ' | ' | ' |
Less Than 12 Months | ' | 20,246 | 14,220 |
Total | ' | 20,246 | 14,220 |
Unrealized Losses | ' | ' | ' |
Less Than 12 Months | ' | -92 | -76 |
Total | ' | -92 | -76 |
Corporate debt | ' | ' | ' |
Fair Value | ' | ' | ' |
Less Than 12 Months | ' | 40,754 | 65,809 |
12 Months or Longer | ' | 6,365 | 11,772 |
Total | ' | 47,119 | 77,581 |
Unrealized Losses | ' | ' | ' |
Less Than 12 Months | ' | -1,068 | -1,535 |
12 Months or Longer | ' | -423 | -652 |
Total | ' | -1,491 | -2,187 |
RMBS | ' | ' | ' |
Fair Value | ' | ' | ' |
Less Than 12 Months | ' | 4,929 | 18,288 |
Total | ' | 4,929 | 18,288 |
Unrealized Losses | ' | ' | ' |
Less Than 12 Months | ' | -280 | -559 |
Total | ' | -280 | -559 |
Other-than-temporary impairment credit loss | ' | ' | ' |
Net impairment losses recognized in net income (loss) | 26 | ' | ' |
CMBS | ' | ' | ' |
Fair Value | ' | ' | ' |
Less Than 12 Months | ' | 5,210 | 2,993 |
Total | ' | 5,210 | 2,993 |
Unrealized Losses | ' | ' | ' |
Less Than 12 Months | ' | -27 | -16 |
Total | ' | -27 | -16 |
CDO/ABS | ' | ' | ' |
Fair Value | ' | ' | ' |
Less Than 12 Months | ' | ' | 2,658 |
Total | ' | ' | 2,658 |
Unrealized Losses | ' | ' | ' |
Less Than 12 Months | ' | ' | -24 |
Total | ' | ' | -24 |
Preferred stocks | ' | ' | ' |
Fair Value | ' | ' | ' |
Less Than 12 Months | ' | ' | 7,805 |
Total | ' | ' | 7,805 |
Unrealized Losses | ' | ' | ' |
Less Than 12 Months | ' | ' | -39 |
Total | ' | ' | -39 |
Other long-term investments | ' | ' | ' |
Fair Value | ' | ' | ' |
Less Than 12 Months | ' | ' | 1,269 |
12 Months or Longer | ' | 1,269 | ' |
Total | ' | 1,269 | 1,269 |
Unrealized Losses | ' | ' | ' |
Less Than 12 Months | ' | ' | -125 |
12 Months or Longer | ' | -126 | ' |
Total | ' | ($126) | ($125) |
Investment_Securities_Details_1
Investment Securities (Details 3) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Changes in the cumulative amount of credit losses (recognized in earnings) on other-than-temporarily impaired available-for-sale securities | ' | ' |
Balance at beginning of period | $1,523 | $1,650 |
Impairment previously recognized | ' | 26 |
Realized due to dispositions with no prior intention to sell | -205 | ' |
Balance at end of period | 1,318 | 1,676 |
Available-for-sale securities sold or redeemed | ' | ' |
Fair value | 50,820 | 34,206 |
Realized gains | 1,984 | 119 |
Realized losses | -151 | -170 |
Net realized gains (losses) | $1,833 | ($51) |
Investment_Securities_Details_2
Investment Securities (Details 4) (USD $) | Mar. 31, 2014 |
In Thousands, unless otherwise specified | |
Fair Value | ' |
Due in 1 year or less | $7,075 |
Due after 1 year through 5 years | 159,690 |
Due after 5 years through 10 years | 123,122 |
Due after 10 years | 152,363 |
Mortgage-backed securities | 95,363 |
Fair Value | 537,613 |
Amortized Cost | ' |
Due in 1 year or less | 7,053 |
Due after 1 year through 5 years | 155,975 |
Due after 5 years through 10 years | 121,744 |
Due after 10 years | 145,219 |
Mortgage-backed securities | 93,199 |
Total | $523,190 |
Investment_Securities_Details_3
Investment Securities (Details 5) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 |
Trading securities | ' | ' | ' |
Trading securities | $60,935 | ' | $51,654 |
Net unrealized and realized gains on trading securities | ' | ' | ' |
Net unrealized gains on trading securities held at period end | ' | 959 | ' |
Net realized gains on trading securities sold or redeemed | 15 | 48 | ' |
Total | 15 | 1,007 | ' |
Corporate debt | ' | ' | ' |
Trading securities | ' | ' | ' |
Trading securities | 1,758 | ' | 1,837 |
RMBS | ' | ' | ' |
Trading securities | ' | ' | ' |
Trading securities | 10,251 | ' | 10,671 |
CMBS | ' | ' | ' |
Trading securities | ' | ' | ' |
Trading securities | 39,788 | ' | 29,897 |
CDO/ABS | ' | ' | ' |
Trading securities | ' | ' | ' |
Trading securities | $9,138 | ' | $9,249 |
Transactions_with_Affiliates_o2
Transactions with Affiliates of Fortress or AIG (Details) (USD $) | Mar. 06, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 |
2009-1 Trust | Nationstar | Nationstar | Nationstar | Logan Circle Partners, L.P. | Logan Circle Partners, L.P. | Subsidiaries of AIG | Subsidiaries of AIG | |
MLPFS | entity | Owners | Owners | Merit | Merit | |||
Transactions with Affiliates of Fortress or AIG | ' | ' | ' | ' | ' | ' | ' | ' |
Number of non-wholly-owned subsidiaries with real estate loans subserved by the related party | ' | 2 | ' | ' | ' | ' | ' | ' |
Subservicing fees | ' | ' | $2,008,000 | $2,372,000 | ' | ' | ' | ' |
Refinancing concessions | ' | ' | ' | 253,000 | ' | ' | ' | ' |
Costs and fees incurred for the investment management services | ' | ' | ' | ' | 200,000 | 300,000 | ' | ' |
Reserves for reinsurance agreements | ' | ' | ' | ' | ' | ' | 45,100,000 | 45,600,000 |
Price agreed on for sale of interest in retained certificates | $738,000,000 | ' | ' | ' | ' | ' | ' | ' |
Percentage of interest concurrently agreed to be sold by counterparty to related party | 75.00% | ' | ' | ' | ' | ' | ' | ' |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Jan. 10, 2014 | Dec. 31, 2013 | Jul. 10, 2013 | Jan. 11, 2013 | Jul. 26, 2013 | Jul. 26, 2013 | Aug. 05, 2013 | Mar. 31, 2013 | Mar. 31, 2013 | Feb. 28, 2013 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 |
SFI | SFI | SFI | SFI | SFI | SFI | SFI | SFI | SFI | SFI | SFI | SFI | SFI | SGSC | SGSC | SGSC | SGSC | SGSC | SGSC | SGSC | SCH | SCH | |||
Intercompany demand note | Maximum | AIGFP | AIGFP | SFSSC | SFSSC | SFSSC | SFMC | SFMC | SFMC | SFMC | SFMC | SFMC | SFMC | CSI | CSI | |||||||||
Intercompany demand note | Services Agreement | Services Agreement | Services Agreement | License Agreement | License Agreement | Building Lease | Building Lease | |||||||||||||||||
item | ||||||||||||||||||||||||
Related Party Transactions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Note receivable from SFI | $167,989,000 | $167,989,000 | $168,000,000 | ' | ' | $168,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest receivable on note | ' | ' | 500,000 | ' | ' | 500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest revenue on note receivable | ' | ' | 1,300,000 | 4,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Receivables from parent and affiliates | 45,500,000 | 39,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 17,300,000 | 16,400,000 |
Maximum amount related party may borrow | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate of intercompany demand note (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | 7.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount paid by related party towards settlement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount of cash collateral repaid to related party | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 27,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fees paid | ' | ' | ' | 1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Capital contributions received to satisfy interest payments | ' | ' | ' | ' | 10,500,000 | ' | 10,500,000 | 10,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount of cash collateral posted by related party | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 40,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Payable due to SFI | ' | ' | 34,800,000 | ' | ' | 22,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount of cash collateral returned | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 40,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fees payable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 14,100,000 | ' | 9,400,000 | ' | ' | ' | ' | 8,700,000 | 6,800,000 |
Service fee expenses | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 45,400,000 | 32,800,000 | ' | ' | ' | ' | ' | ' | ' |
Percentage of allocated cost of service | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of actual cost incurred | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' |
Margin on the systems and software (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7.00% | ' | ' | ' | ' | ' |
License fees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,400,000 | 1,500,000 | ' | ' | ' | ' |
Number of buildings leased | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6 | ' | ' | ' |
Annual rental fees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,700,000 | ' | ' | ' |
Rent charged | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $900,000 | $1,000,000 | ' | ' |
Longterm_Debt_Details
Long-term Debt (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Jan. 31, 2007 | Dec. 30, 2013 | Dec. 30, 2013 | Dec. 30, 2013 | Dec. 30, 2013 | Dec. 30, 2013 | Dec. 30, 2013 |
Retail Notes | Medium Term Notes | Securitizations | Senior debt | Junior Subordinated Debt | Junior Subordinated Debt | Guaranty Agreements | Guaranty Agreements | Guaranty Agreements | Guaranty Agreements | Guaranty Agreements | Guaranty Agreements | |||
SFFC | Springleaf Finance Corporation | Senior debt | Junior Subordinated Debt | 8.250% Senior Notes due 2023 | 7.750% Senior Notes due 2021 | 6.00% Senior Notes due 2020 | Senior Notes 1999 Indenture | |||||||
Springleaf Holding Inc. | Springleaf Holding Inc. | Springleaf Holding Inc. | Springleaf Holding Inc. | Springleaf Holding Inc. | Springleaf Holding Inc. | |||||||||
Principal maturities of long-term debt by type of debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Contractual interest rate, minimum (as a percent) | ' | ' | 5.40% | 5.40% | 1.27% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Contractual interest rate, maximum (as a percent) | ' | ' | 7.50% | 8.25% | 6.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rates (as a percent) | ' | ' | ' | ' | ' | ' | 6.00% | ' | ' | ' | 8.25% | 7.75% | 6.00% | ' |
Second quarter 2014 | $10,887,000 | ' | $10,887,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Third quarter 2014 | 8,564,000 | ' | 8,564,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fourth quarter 2014 | 335,486,000 | ' | 335,486,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
First quarter 2015 | 16,575,000 | ' | 16,575,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Remainder of 2015 | 780,679,000 | ' | 30,679,000 | 750,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2016 | 375,000,000 | ' | ' | 375,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2017 | 2,360,837,000 | ' | ' | 2,360,837,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2019-2067 | 1,600,000,000 | ' | ' | 1,250,000,000 | ' | ' | 350,000,000 | ' | ' | ' | ' | ' | ' | ' |
Securitizations | 5,079,298,000 | ' | ' | ' | 5,079,298,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total principal maturities | 10,567,326,000 | ' | 402,191,000 | 4,735,837,000 | 5,079,298,000 | ' | 350,000,000 | ' | ' | ' | ' | ' | ' | ' |
Total carrying amount | 9,810,291,000 | 10,640,728,000 | 389,601,000 | 4,187,231,000 | 5,061,864,000 | ' | 171,595,000 | ' | ' | ' | ' | ' | ' | ' |
Face amount of each issuance of debt | ' | ' | ' | ' | ' | ' | ' | ' | 5,200,000,000 | 350,000,000 | ' | ' | ' | 3,900,000,000 |
Term of debt | ' | ' | ' | ' | ' | ' | ' | '60 years | ' | '60 years | ' | ' | ' | ' |
Outstanding principal balance of the notes, plus accrued and unpaid interest repaid | ' | ' | ' | ' | ' | $750,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Variable_Interest_Entities_Det
Variable Interest Entities (Details) (USD $) | 3 Months Ended | 3 Months Ended | 0 Months Ended | |||||||||||||||||||
Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 26, 2014 | Mar. 27, 2014 | Sep. 25, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | |
Personal loans | Personal loans | Personal loans | Personal loans | Real Estate Loans | Real Estate Loans | Real Estate Loans | Real Estate Loans | Consolidated VIEs | Consolidated VIEs | Consolidated VIEs | Consolidated VIEs | Consolidated VIEs | Consolidated VIEs | Consolidated VIEs | Consolidated VIEs | Consolidated VIEs | Consolidated VIEs | |||||
Consumer Loan Securitizations | Consumer Loan Securitizations | Consumer Loan Securitizations | Consumer Loan Securitizations | Consumer Loan Securitizations | Mortgage Loan Securitizations | Mortgage Loan Securitizations | ||||||||||||||||
Personal loans | Personal loans | Personal loans | Personal loans | Personal loans | Real Estate Loans | Real Estate Loans | ||||||||||||||||
2014-A Trust | 2013-BAC Trust Notes | 2013-BAC Trust Notes | ||||||||||||||||||||
Assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Finance receivables | $10,124,955,000 | ' | $11,143,859,000 | ' | $3,168,643,000 | $3,159,932,000 | ' | ' | $6,874,115,000 | $7,885,016,000 | ' | ' | ' | ' | ' | $1,758,946,000 | $1,572,070,000 | ' | ' | ' | $4,718,033,000 | $5,595,150,000 |
Allowance for finance receivable losses | 364,303,000 | 210,560,000 | 332,195,000 | 182,701,000 | 101,787,000 | 94,323,000 | 57,920,000 | 66,580,000 | 259,826,000 | 236,032,000 | 150,990,000 | 113,861,000 | 153,873,000 | ' | 153,084,000 | ' | ' | ' | ' | ' | ' | ' |
Restricted cash | 341,480,000 | ' | 358,759,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 327,846,000 | ' | 345,906,000 | ' | ' | ' | ' | ' | ' | ' |
Liabilities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-term debt | 9,810,291,000 | ' | 10,640,728,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,061,864,000 | ' | 5,160,227,000 | ' | ' | ' | ' | ' | ' | ' |
Consolidated interest expense | 181,746,000 | 230,306,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 43,100,000 | 28,500,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Amount of notes sold under private securitization | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 559,300,000 | ' | ' | ' | ' |
Weighted average yield (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2.62% | ' | ' | ' | ' |
Proceeds from notes sold under securitization transactions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 559,200,000 | ' | 500,000,000 | ' | ' |
Interest reserve requirement on notes sold under securitization | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,400,000 | ' | ' | ' | ' |
Notes initially retained by the entity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 32,900,000 | ' | ' | ' | ' |
Outstanding principal balance of the notes, plus accrued and unpaid interest repaid | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $231,300,000 | ' | ' | ' |
Derivative_Financial_Instrumen2
Derivative Financial Instruments (Details) (USD $) | Aug. 05, 2013 | Mar. 31, 2013 | Aug. 05, 2013 | Jan. 31, 2013 |
instrument | Other revenues - other | AIGFP | Cash flow hedges | |
Cross currency interest rate derivative | Interest Expense | |||
Other revenues - other | ||||
Derivative Financial Instruments | ' | ' | ' | ' |
Amount of deferred net gain reclassified from accumulated other comprehensive income or loss | ' | ' | ' | $200,000 |
Loss recorded on termination | ' | ' | 1,900,000 | ' |
Number of derivative instruments | 0 | ' | ' | ' |
Net gain on non-designated hedging instruments | ' | 4,200,000 | ' | ' |
Derivative adjustments | ' | ' | ' | ' |
Mark to market losses | ' | -16,875,000 | ' | ' |
Net interest income | ' | 3,598,000 | ' | ' |
Credit valuation adjustment gains | ' | 40,000 | ' | ' |
Total | ' | ($13,237,000) | ' | ' |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Income (Details) (USD $) | 3 Months Ended | 3 Months Ended | |||||||||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2014 | Mar. 31, 2013 |
Unrealized Gains (Losses) Investment Securities | Unrealized Gains (Losses) Investment Securities | Unrealized Gains (Losses) Cash Flow Hedges | Retirement Plan Liabilities Adjustments | Retirement Plan Liabilities Adjustments | Retirement Plan Liabilities Adjustments | Retirement Plan Liabilities Adjustments | Foreign Currency Translation Adjustments | Foreign Currency Translation Adjustments | |||
Changes in accumulated other comprehensive income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance at beginning of period | $28,095 | $25,896 | $4,362 | $13,545 | $104 | $20,153 | $20,153 | $8,120 | $8,120 | $3,580 | $4,127 |
Other comprehensive income (loss) before reclassifications | 6,248 | 1,394 | 6,375 | -720 | ' | ' | ' | ' | ' | -127 | 2,114 |
Reclassification adjustments from accumulated other comprehensive income | -1,201 | -54 | -1,201 | 50 | -104 | ' | ' | ' | ' | ' | ' |
Balance at end of period | $33,142 | $27,236 | $9,536 | $12,875 | ' | $20,153 | $20,153 | $8,120 | $8,120 | $3,453 | $6,241 |
Accumulated_Other_Comprehensiv3
Accumulated Other Comprehensive Income (Details 2) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Reclassification adjustments from accumulated other comprehensive income | ' | ' |
Investment revenues, before taxes | $9,431 | $8,838 |
Interest expenses, before taxes | -181,746 | -230,306 |
Income tax effect | -24,080 | 3,350 |
Net income (loss) | 38,202 | -7,284 |
Reclassification adjustments | ' | ' |
Reclassification adjustments from accumulated other comprehensive income | ' | ' |
Net income (loss) | 1,201 | 54 |
Unrealized gains (losses) on investment securities | Reclassification adjustments | ' | ' |
Reclassification adjustments from accumulated other comprehensive income | ' | ' |
Investment revenues, before taxes | 1,848 | -77 |
Income tax effect | -647 | 27 |
Net income (loss) | 1,201 | -50 |
Unrealized gains on cash flow hedges | Reclassification adjustments | ' | ' |
Reclassification adjustments from accumulated other comprehensive income | ' | ' |
Interest expenses, before taxes | ' | 160 |
Income tax effect | ' | -56 |
Net income (loss) | ' | $104 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 |
Income taxes | ' | ' | ' |
Net deferred tax liabilities | $62.10 | ' | $141.90 |
Effective income tax rate (as a percent) | 38.70% | 31.50% | ' |
Percentage increase in effective tax rate for state income taxes | 2.70% | ' | ' |
State | ' | ' | ' |
Income taxes | ' | ' | ' |
Valuation allowance | 24.9 | ' | 23.8 |
United Kingdom and Puerto Rico operations | ' | ' | ' |
Income taxes | ' | ' | ' |
Valuation allowance | $21.70 | ' | $21.40 |
Contingencies_Details
Contingencies (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Contingencies | ' | ' |
Estimated PPI claims reserve | $27.80 | $33.50 |
Benefit_Plans_Details
Benefit Plans (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Pension | ' | ' |
Components of net periodic benefit cost: | ' | ' |
Interest cost | $3,818 | $3,590 |
Expected return on assets | -4,109 | -3,874 |
Amortization of net loss (gain) | 1 | 12 |
Net periodic benefit cost | -290 | -272 |
Postretirement | ' | ' |
Components of net periodic benefit cost: | ' | ' |
Service cost | 22 | 81 |
Interest cost | 26 | 64 |
Amortization of net loss (gain) | -67 | ' |
Net periodic benefit cost | ($19) | $145 |
ShareBased_Compensation_Detail
Share-Based Compensation (Details) (USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2014 |
Share-Based Compensation | ' |
Share-based compensation expense, net of forfeitures | $1.30 |
Segment_Information_Details
Segment Information (Details) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 |
segment | |||
Segment Information | ' | ' | ' |
Number of business segments | 3 | ' | ' |
Information about segments as well as reconciliations to consolidated financial statement amounts | ' | ' | ' |
Interest income | $402,569 | $408,517 | ' |
Interest expense | 181,746 | 230,306 | ' |
Net interest income | 220,823 | 178,211 | ' |
Provision for finance receivable losses | 107,012 | 94,231 | ' |
Net interest income after provision for finance receivable losses | 113,811 | 83,980 | ' |
Other revenues: | ' | ' | ' |
Insurance | 38,419 | 32,900 | ' |
Investment | 9,431 | 8,838 | ' |
Net gain (loss) on repurchases and repayments of debt | -6,615 | ' | ' |
Net gain (loss) on sales of real estate loans and related trust assets | 55,186 | ' | ' |
Other | 3,034 | 5,262 | ' |
Total other revenues | 99,455 | 47,000 | ' |
Operating expenses: | ' | ' | ' |
Salaries and benefits | 82,186 | 77,898 | ' |
Other operating expenses | 50,433 | 48,962 | ' |
Insurance losses and loss adjustment expenses | 18,365 | 14,754 | ' |
Total other expenses | 150,984 | 141,614 | ' |
Income (loss) before provision for (benefit from) income taxes | 62,282 | -10,634 | ' |
Assets | 12,006,857 | 14,595,462 | 12,732,037 |
Consumer | ' | ' | ' |
Information about segments as well as reconciliations to consolidated financial statement amounts | ' | ' | ' |
Number of states in which branch operations are conducted | 26 | ' | ' |
Operating segments | Consumer | ' | ' | ' |
Information about segments as well as reconciliations to consolidated financial statement amounts | ' | ' | ' |
Interest income | 208,946 | 160,483 | ' |
Interest expense | 40,622 | 36,951 | ' |
Net interest income | 168,324 | 123,532 | ' |
Provision for finance receivable losses | 44,932 | 19,961 | ' |
Net interest income after provision for finance receivable losses | 123,392 | 103,571 | ' |
Other revenues: | ' | ' | ' |
Intersegment - insurance commissions | 12,289 | 10,843 | ' |
Net gain (loss) on repurchases and repayments of debt | -1,426 | ' | ' |
Other | 580 | 423 | ' |
Total other revenues | 11,443 | 11,266 | ' |
Operating expenses: | ' | ' | ' |
Salaries and benefits | 65,479 | 60,053 | ' |
Other operating expenses | 31,577 | 29,145 | ' |
Total other expenses | 97,056 | 89,198 | ' |
Income (loss) before provision for (benefit from) income taxes | 37,779 | 25,639 | ' |
Assets | 3,205,636 | 2,579,000 | ' |
Operating segments | Insurance | ' | ' | ' |
Other revenues: | ' | ' | ' |
Insurance | 38,384 | 32,892 | ' |
Investment | 10,267 | 10,385 | ' |
Intersegment - insurance commissions | -12,347 | -10,836 | ' |
Other | 1,641 | 1,793 | ' |
Total other revenues | 37,945 | 34,234 | ' |
Operating expenses: | ' | ' | ' |
Salaries and benefits | 4,554 | 2,925 | ' |
Other operating expenses | 3,225 | 2,340 | ' |
Insurance losses and loss adjustment expenses | 18,611 | 14,968 | ' |
Total other expenses | 26,390 | 20,233 | ' |
Income (loss) before provision for (benefit from) income taxes | 11,555 | 14,001 | ' |
Assets | 967,627 | 1,013,908 | ' |
Operating segments | Real Estate | ' | ' | ' |
Information about segments as well as reconciliations to consolidated financial statement amounts | ' | ' | ' |
Interest income | 153,245 | 184,956 | ' |
Interest expense | 110,348 | 152,688 | ' |
Net interest income | 42,897 | 32,268 | ' |
Provision for finance receivable losses | 61,374 | 72,248 | ' |
Net interest income after provision for finance receivable losses | -18,477 | -39,980 | ' |
Other revenues: | ' | ' | ' |
Intersegment - insurance commissions | 70 | 28 | ' |
Net gain (loss) on repurchases and repayments of debt | -10,025 | ' | ' |
Net gain (loss) on fair value adjustments on debt | 8,298 | 14,964 | ' |
Net gain (loss) on sales of real estate loans and related trust assets | -62,176 | ' | ' |
Other | -1,179 | -1,100 | ' |
Total other revenues | -65,012 | 13,892 | ' |
Operating expenses: | ' | ' | ' |
Salaries and benefits | 8,526 | 6,497 | ' |
Other operating expenses | 12,955 | 14,729 | ' |
Total other expenses | 21,481 | 21,226 | ' |
Income (loss) before provision for (benefit from) income taxes | -104,970 | -47,314 | ' |
Assets | 7,258,737 | 9,364,481 | ' |
Other | ' | ' | ' |
Information about segments as well as reconciliations to consolidated financial statement amounts | ' | ' | ' |
Number of states with legacy operations where branch-based personal lending ceased | 14 | ' | ' |
Interest income | 5,104 | 15,344 | ' |
Interest expense | 2,148 | 4,860 | ' |
Net interest income | 2,956 | 10,484 | ' |
Provision for finance receivable losses | 964 | 993 | ' |
Net interest income after provision for finance receivable losses | 1,992 | 9,491 | ' |
Other revenues: | ' | ' | ' |
Insurance | 38 | 20 | ' |
Intersegment - insurance commissions | -12 | -35 | ' |
Net gain (loss) on repurchases and repayments of debt | -48 | ' | ' |
Other | 1,992 | 4,427 | ' |
Total other revenues | 1,970 | 4,412 | ' |
Operating expenses: | ' | ' | ' |
Salaries and benefits | 3,671 | 8,476 | ' |
Other operating expenses | 1,681 | 1,592 | ' |
Total other expenses | 5,352 | 10,068 | ' |
Income (loss) before provision for (benefit from) income taxes | -1,390 | 3,835 | ' |
Assets | 1,008,735 | 2,380,616 | ' |
Push-down Accounting Adjustments | ' | ' | ' |
Information about segments as well as reconciliations to consolidated financial statement amounts | ' | ' | ' |
Interest income | 35,274 | 47,734 | ' |
Interest expense | 28,628 | 35,807 | ' |
Net interest income | 6,646 | 11,927 | ' |
Provision for finance receivable losses | -258 | 1,029 | ' |
Net interest income after provision for finance receivable losses | 6,904 | 10,898 | ' |
Other revenues: | ' | ' | ' |
Insurance | -3 | -12 | ' |
Investment | -836 | -1,547 | ' |
Net gain (loss) on repurchases and repayments of debt | 4,884 | ' | ' |
Net gain (loss) on fair value adjustments on debt | -8,298 | -14,964 | ' |
Net gain (loss) on sales of real estate loans and related trust assets | 117,362 | ' | ' |
Other | ' | -281 | ' |
Total other revenues | 113,109 | -16,804 | ' |
Operating expenses: | ' | ' | ' |
Salaries and benefits | -44 | -53 | ' |
Other operating expenses | 995 | 1,156 | ' |
Insurance losses and loss adjustment expenses | -246 | -214 | ' |
Total other expenses | 705 | 889 | ' |
Income (loss) before provision for (benefit from) income taxes | 119,308 | -6,795 | ' |
Assets | ($433,878) | ($742,543) | ' |
Prior_Period_Revisions_Details
Prior Period Revisions (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Interest income | $402,569 | $408,517 |
Interest expense | 181,746 | 230,306 |
Net interest income | 220,823 | 178,211 |
Provision for finance receivable losses | 107,012 | 94,231 |
Net interest income after provision for finance receivable losses | 113,811 | 83,980 |
Other revenues: | ' | ' |
Insurance | 38,419 | 32,900 |
Investment | 9,431 | 8,838 |
Other | 3,034 | 5,262 |
Total other revenues | 99,455 | 47,000 |
Operating expenses: | ' | ' |
Salaries and benefits | 82,186 | 77,898 |
Other operating expenses | 50,433 | 48,962 |
Insurance losses and loss adjustment expenses | 18,365 | 14,754 |
Total other expenses | 150,984 | 141,614 |
Income (loss) before provision for (benefit from) income taxes | 62,282 | -10,634 |
Benefit from income taxes | 24,080 | -3,350 |
Net income (loss) | 38,202 | -7,284 |
As Reported | ' | ' |
Interest income | ' | 409,797 |
Interest expense | ' | 227,101 |
Net interest income | ' | 182,696 |
Provision for finance receivable losses | ' | 96,085 |
Net interest income after provision for finance receivable losses | ' | 86,611 |
Other revenues: | ' | ' |
Insurance | ' | 32,900 |
Investment | ' | 7,880 |
Other | ' | 5,262 |
Total other revenues | ' | 46,042 |
Operating expenses: | ' | ' |
Salaries and benefits | ' | 77,898 |
Other operating expenses | ' | 48,962 |
Insurance losses and loss adjustment expenses | ' | 14,754 |
Total other expenses | ' | 141,614 |
Income (loss) before provision for (benefit from) income taxes | ' | -8,961 |
Benefit from income taxes | ' | -1,546 |
Net income (loss) | ' | -7,415 |
Out-of-Period | ' | ' |
Provision for finance receivable losses | ' | -1,323 |
Net interest income after provision for finance receivable losses | ' | 1,323 |
Operating expenses: | ' | ' |
Income (loss) before provision for (benefit from) income taxes | ' | 1,323 |
Benefit from income taxes | ' | -696 |
Net income (loss) | ' | 2,019 |
Adjustments | ' | ' |
Interest income | ' | -1,280 |
Interest expense | ' | 3,205 |
Net interest income | ' | -4,485 |
Provision for finance receivable losses | ' | -531 |
Net interest income after provision for finance receivable losses | ' | -3,954 |
Other revenues: | ' | ' |
Investment | ' | 958 |
Total other revenues | ' | 958 |
Operating expenses: | ' | ' |
Income (loss) before provision for (benefit from) income taxes | ' | -2,996 |
Benefit from income taxes | ' | -1,108 |
Net income (loss) | ' | ($1,888) |
Prior_Period_Revisions_Details1
Prior Period Revisions (Details 2) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Net loss | $38,202 | ($7,284) |
Net unrealized losses on: | ' | ' |
Investment securities on which other-than-temporary impairments were taken | -307 | -23 |
All other investment securities | 10,114 | -1,101 |
Foreign currency translation adjustments | -127 | 2,114 |
Net unrealized losses on: | ' | ' |
Investment securities on which other-than-temporary impairments were taken | 107 | 8 |
All other investment securities | -3,539 | 396 |
Other comprehensive income, net of tax, before reclassification adjustments | 6,248 | 1,394 |
Reclassification adjustments included in net loss: | ' | ' |
Net realized losses on investment securities | -1,848 | 77 |
Cash flow hedges | ' | -160 |
Income tax effect: | ' | ' |
Net realized losses on investment securities | 647 | -27 |
Cash flow hedges | ' | 56 |
Reclassification adjustments included in net income (loss), net of tax | -1,201 | -54 |
Other comprehensive income, net of tax | ' | 1,340 |
Comprehensive loss | ' | -5,944 |
As Reported | ' | ' |
Net loss | ' | -7,415 |
Net unrealized losses on: | ' | ' |
Investment securities on which other-than-temporary impairments were taken | ' | -23 |
All other investment securities | ' | -94 |
Foreign currency translation adjustments | ' | 2,114 |
Net unrealized losses on: | ' | ' |
Investment securities on which other-than-temporary impairments were taken | ' | 8 |
All other investment securities | ' | 33 |
Other comprehensive income, net of tax, before reclassification adjustments | ' | 2,038 |
Reclassification adjustments included in net loss: | ' | ' |
Net realized losses on investment securities | ' | 29 |
Cash flow hedges | ' | -160 |
Income tax effect: | ' | ' |
Net realized losses on investment securities | ' | -10 |
Cash flow hedges | ' | 56 |
Reclassification adjustments included in net income (loss), net of tax | ' | -85 |
Other comprehensive income, net of tax | ' | 1,953 |
Comprehensive loss | ' | ($5,462) |
Prior_Period_Revisions_Details2
Prior Period Revisions (Details 3) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Cash flows from operating activities | ' | ' |
Net loss | $38,202 | ($7,284) |
Reconciling adjustments: | ' | ' |
Provision for finance receivable losses | 107,012 | 94,231 |
Depreciation and amortization | 27,033 | 21,671 |
Deferred income tax benefit | -82,607 | -14,370 |
Writedowns and net loss on sales of real estate owned | 1,438 | 935 |
Other | -1,848 | 29 |
Cash flows due to changes in: | ' | ' |
Other assets and other liabilities | 57,699 | 41,503 |
Insurance claims and policyholder liabilities | -36 | -3,288 |
Taxes receivable and payable | 106,291 | 9,891 |
Accrued interest and finance charges | 1,047 | -8,163 |
Restricted cash | -2,958 | -1,177 |
Other, net | -43 | 307 |
Net cash provided by operating activities | 202,659 | 134,285 |
Cash flows from investing activities | ' | ' |
Finance receivables originated or purchased, net of deferred origination costs | -497,677 | -442,623 |
Principal collections on finance receivables | 628,734 | 665,677 |
Available-for-sale investment securities purchased | -90,021 | -19,429 |
Trading investment securities purchased | -9,577 | -982 |
Available-for-sale investment securities called, sold, and matured | 55,271 | 47,316 |
Trading investment securities called, sold, and matured | 776 | 1,085 |
Change in notes receivable from parent and affiliate | ' | -30,750 |
Change in restricted cash | 18 | -63,926 |
Proceeds from sale of real estate owned | 21,706 | 35,573 |
Other, net | -2,834 | -546 |
Net cash provided by investing activities | 922,646 | 191,395 |
Cash flows from financing activities | ' | ' |
Proceeds from issuance of long-term debt, net of commissions | 575,679 | 562,159 |
Repayment of long-term debt | -1,367,282 | -645,149 |
Capital contributions from parent | 10,500 | 10,500 |
Net cash used for financing activities | -781,103 | -72,490 |
Effect of exchange rate changes | -5 | -1,700 |
Increase (decrease) in cash and cash equivalents | 344,197 | 251,490 |
Cash and cash equivalents at beginning of period | 374,835 | 1,357,212 |
Cash and cash equivalents at end of period | 719,032 | 1,608,702 |
As Reported | ' | ' |
Cash flows from operating activities | ' | ' |
Net loss | ' | -7,415 |
Reconciling adjustments: | ' | ' |
Provision for finance receivable losses | ' | 96,085 |
Depreciation and amortization | ' | 17,185 |
Deferral of finance receivable origination costs | ' | -12,006 |
Deferred income tax benefit | ' | -32,408 |
Writedowns and net loss on sales of real estate owned | ' | 935 |
Other | ' | 29 |
Cash flows due to changes in: | ' | ' |
Other assets and other liabilities | ' | 40,140 |
Insurance claims and policyholder liabilities | ' | -3,288 |
Taxes receivable and payable | ' | 29,650 |
Accrued interest and finance charges | ' | 4,722 |
Restricted cash | ' | -1,177 |
Other, net | ' | 304 |
Net cash provided by operating activities | ' | 132,756 |
Cash flows from investing activities | ' | ' |
Finance receivables originated or purchased, net of deferred origination costs | ' | -430,617 |
Principal collections on finance receivables | ' | 652,792 |
Available-for-sale investment securities purchased | ' | -20,411 |
Available-for-sale investment securities called, sold, and matured | ' | 48,401 |
Change in notes receivable from parent and affiliate | ' | -30,750 |
Change in restricted cash | ' | -63,926 |
Proceeds from sale of real estate owned | ' | 35,573 |
Other, net | ' | -546 |
Net cash provided by investing activities | ' | 190,516 |
Cash flows from financing activities | ' | ' |
Proceeds from issuance of long-term debt, net of commissions | ' | 564,567 |
Repayment of long-term debt | ' | -645,149 |
Capital contributions from parent | ' | 10,500 |
Net cash used for financing activities | ' | -70,082 |
Effect of exchange rate changes | ' | -1,700 |
Increase (decrease) in cash and cash equivalents | ' | 251,490 |
Cash and cash equivalents at beginning of period | ' | 1,357,212 |
Cash and cash equivalents at end of period | ' | $1,608,702 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Assets | ' | ' |
Investment securities | $546,929 | $503,364 |
Note receivable from parent | 167,989 | 167,989 |
Restricted cash | 341,480 | 358,759 |
Other assets: | ' | ' |
Receivables from parent and affiliates | 45,500 | 39,400 |
Fair Value Measurements Using Level 1 | ' | ' |
Assets | ' | ' |
Cash and cash equivalents | 719,032 | 374,835 |
Restricted cash | 341,480 | 358,759 |
Fair Value Measurements Using Level 2 | ' | ' |
Assets | ' | ' |
Investment securities | 587,708 | 531,997 |
Note receivable from parent | 167,989 | 167,989 |
Other assets: | ' | ' |
Receivables from parent and affiliates | 40,120 | 39,364 |
Liabilities | ' | ' |
Long-term debt | 10,942,078 | 11,776,576 |
Payable to parent and affiliate | 43,206 | 38,463 |
Fair Value Measurements Using Level 3 | ' | ' |
Assets | ' | ' |
Investment securities | 20,752 | 23,617 |
Net finance receivables, less allowance for finance receivable losses | 10,331,405 | 11,113,980 |
Other assets: | ' | ' |
Commercial mortgage loans | 94,573 | 94,681 |
Escrow advance receivable | 21,191 | 23,527 |
Total Fair Value | ' | ' |
Assets | ' | ' |
Cash and cash equivalents | 719,032 | 374,835 |
Investment securities | 608,460 | 555,614 |
Net finance receivables, less allowance for finance receivable losses | 10,331,405 | 11,113,980 |
Note receivable from parent | 167,989 | 167,989 |
Restricted cash | 341,480 | 358,759 |
Other assets: | ' | ' |
Commercial mortgage loans | 94,573 | 94,681 |
Escrow advance receivable | 21,191 | 23,527 |
Receivables from parent and affiliates | 40,120 | 39,364 |
Liabilities | ' | ' |
Long-term debt | 10,942,078 | 11,776,576 |
Payable to parent and affiliate | 43,206 | 38,463 |
Total Carrying Value | ' | ' |
Assets | ' | ' |
Cash and cash equivalents | 719,032 | 374,835 |
Investment securities | 608,460 | 555,614 |
Net finance receivables, less allowance for finance receivable losses | 9,760,652 | 10,811,664 |
Note receivable from parent | 167,989 | 167,989 |
Restricted cash | 341,480 | 358,759 |
Other assets: | ' | ' |
Commercial mortgage loans | 101,403 | 102,200 |
Escrow advance receivable | 21,191 | 23,527 |
Receivables from parent and affiliates | 40,120 | 39,364 |
Liabilities | ' | ' |
Long-term debt | 9,810,291 | 10,640,728 |
Payable to parent and affiliate | $43,206 | $38,463 |
Fair_Value_Measurements_Detail1
Fair Value Measurements (Details 2) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Assets | ' | ' |
Investment securities | $608,460,000 | $555,614,000 |
Available-for-sale securities | 546,929,000 | 503,364,000 |
Trading securities | 60,935,000 | 51,654,000 |
Other fair value disclosures | ' | ' |
Interest in a limited partnership | 600,000 | 600,000 |
Stocks not carried at fair value | 900,000 | 900,000 |
Transfer from Level 1 Assets to Level 2 | 0 | ' |
Transfer from Level 2 Assets to Level 1 | 0 | ' |
Transfer from Level 1 Liabilities to Level 2 | 0 | ' |
Transfers from Level 2 Liabilities to Level 1 | 0 | ' |
Investment securities: | ' | ' |
Assets | ' | ' |
Available-for-sale securities | 537,613,000 | 493,440,000 |
U.S. government and government sponsored entities | ' | ' |
Assets | ' | ' |
Available-for-sale securities | 61,979,000 | 58,633,000 |
Obligations of states, municipalities, and political subdivisions | ' | ' |
Assets | ' | ' |
Available-for-sale securities | 111,254,000 | 102,745,000 |
Corporate debt | ' | ' |
Assets | ' | ' |
Available-for-sale securities | 269,017,000 | 237,916,000 |
Trading securities | 1,758,000 | 1,837,000 |
RMBS | ' | ' |
Assets | ' | ' |
Available-for-sale securities | 69,284,000 | 82,623,000 |
Trading securities | 10,251,000 | 10,671,000 |
CMBS | ' | ' |
Assets | ' | ' |
Available-for-sale securities | 22,134,000 | 7,547,000 |
Trading securities | 39,788,000 | 29,897,000 |
CDO/ABS | ' | ' |
Assets | ' | ' |
Available-for-sale securities | 3,945,000 | 3,976,000 |
Trading securities | 9,138,000 | 9,249,000 |
Preferred stocks | ' | ' |
Assets | ' | ' |
Available-for-sale securities | 7,197,000 | 7,805,000 |
Other long-term investments | ' | ' |
Assets | ' | ' |
Available-for-sale securities | 1,269,000 | 1,269,000 |
Fair Value Measurements Using Level 2 | ' | ' |
Assets | ' | ' |
Available-for-sale securities | 587,708,000 | 531,997,000 |
Fair Value Measurements Using Level 3 | ' | ' |
Assets | ' | ' |
Available-for-sale securities | 20,752,000 | 23,617,000 |
Recurring basis | Fair Value Measurements Using Level 1 | ' | ' |
Assets | ' | ' |
Cash and cash equivalents in mutual funds | 153,565,000 | 185,829,000 |
Restricted cash in mutual funds | 315,306,000 | 321,617,000 |
Total | 468,871,000 | 507,446,000 |
Recurring basis | Fair Value Measurements Using Level 2 | ' | ' |
Assets | ' | ' |
Investment securities | 587,708,000 | 531,997,000 |
Available-for-sale securities | 535,268,000 | 487,726,000 |
Total | 587,708,000 | 531,997,000 |
Recurring basis | Fair Value Measurements Using Level 2 | Available-for-sale securities | ' | ' |
Assets | ' | ' |
Available-for-sale securities | 528,071,000 | 479,921,000 |
Recurring basis | Fair Value Measurements Using Level 2 | Trading securities | ' | ' |
Assets | ' | ' |
Trading securities | 52,440,000 | 44,271,000 |
Recurring basis | Fair Value Measurements Using Level 2 | U.S. government and government sponsored entities | Available-for-sale securities | ' | ' |
Assets | ' | ' |
Available-for-sale securities | 61,979,000 | 58,633,000 |
Recurring basis | Fair Value Measurements Using Level 2 | Obligations of states, municipalities, and political subdivisions | Available-for-sale securities | ' | ' |
Assets | ' | ' |
Available-for-sale securities | 111,254,000 | 102,745,000 |
Recurring basis | Fair Value Measurements Using Level 2 | Corporate debt | Available-for-sale securities | ' | ' |
Assets | ' | ' |
Available-for-sale securities | 260,363,000 | 225,312,000 |
Recurring basis | Fair Value Measurements Using Level 2 | Corporate debt | Trading securities | ' | ' |
Assets | ' | ' |
Trading securities | 1,758,000 | 1,837,000 |
Recurring basis | Fair Value Measurements Using Level 2 | RMBS | Available-for-sale securities | ' | ' |
Assets | ' | ' |
Available-for-sale securities | 69,203,000 | 82,510,000 |
Recurring basis | Fair Value Measurements Using Level 2 | RMBS | Trading securities | ' | ' |
Assets | ' | ' |
Trading securities | 9,032,000 | 10,671,000 |
Recurring basis | Fair Value Measurements Using Level 2 | CMBS | Available-for-sale securities | ' | ' |
Assets | ' | ' |
Available-for-sale securities | 22,127,000 | 7,545,000 |
Recurring basis | Fair Value Measurements Using Level 2 | CMBS | Trading securities | ' | ' |
Assets | ' | ' |
Trading securities | 39,788,000 | 29,897,000 |
Recurring basis | Fair Value Measurements Using Level 2 | CDO/ABS | Available-for-sale securities | ' | ' |
Assets | ' | ' |
Available-for-sale securities | 3,145,000 | 3,176,000 |
Recurring basis | Fair Value Measurements Using Level 2 | CDO/ABS | Trading securities | ' | ' |
Assets | ' | ' |
Trading securities | 1,862,000 | 1,866,000 |
Recurring basis | Fair Value Measurements Using Level 2 | Preferred stocks | Available-for-sale securities | ' | ' |
Assets | ' | ' |
Available-for-sale securities | 7,197,000 | 7,805,000 |
Recurring basis | Fair Value Measurements Using Level 3 | ' | ' |
Assets | ' | ' |
Investment securities | 19,306,000 | 22,171,000 |
Available-for-sale securities | 10,811,000 | 14,788,000 |
Total | 19,306,000 | 22,171,000 |
Recurring basis | Fair Value Measurements Using Level 3 | Available-for-sale securities | ' | ' |
Assets | ' | ' |
Available-for-sale securities | 9,542,000 | 13,519,000 |
Recurring basis | Fair Value Measurements Using Level 3 | Trading securities | ' | ' |
Assets | ' | ' |
Trading securities | 8,495,000 | 7,383,000 |
Recurring basis | Fair Value Measurements Using Level 3 | Corporate debt | Available-for-sale securities | ' | ' |
Assets | ' | ' |
Available-for-sale securities | 8,654,000 | 12,604,000 |
Recurring basis | Fair Value Measurements Using Level 3 | RMBS | Available-for-sale securities | ' | ' |
Assets | ' | ' |
Available-for-sale securities | 81,000 | 113,000 |
Recurring basis | Fair Value Measurements Using Level 3 | RMBS | Trading securities | ' | ' |
Assets | ' | ' |
Trading securities | 1,219,000 | ' |
Recurring basis | Fair Value Measurements Using Level 3 | CMBS | Available-for-sale securities | ' | ' |
Assets | ' | ' |
Available-for-sale securities | 7,000 | 2,000 |
Recurring basis | Fair Value Measurements Using Level 3 | CDO/ABS | Available-for-sale securities | ' | ' |
Assets | ' | ' |
Available-for-sale securities | 800,000 | 800,000 |
Recurring basis | Fair Value Measurements Using Level 3 | CDO/ABS | Trading securities | ' | ' |
Assets | ' | ' |
Trading securities | 7,276,000 | 7,383,000 |
Recurring basis | Fair Value Measurements Using Level 3 | Other long-term investments | Available-for-sale securities | ' | ' |
Assets | ' | ' |
Available-for-sale securities | 1,269,000 | 1,269,000 |
Recurring basis | Total Carried At Fair Value | ' | ' |
Assets | ' | ' |
Cash and cash equivalents in mutual funds | 153,565,000 | 185,829,000 |
Investment securities | 607,014,000 | 554,168,000 |
Available-for-sale securities | 546,079,000 | 502,514,000 |
Restricted cash in mutual funds | 315,306,000 | 321,617,000 |
Total | 1,075,885,000 | 1,061,614,000 |
Recurring basis | Total Carried At Fair Value | Available-for-sale securities | ' | ' |
Assets | ' | ' |
Available-for-sale securities | 537,613,000 | 493,440,000 |
Recurring basis | Total Carried At Fair Value | Trading securities | ' | ' |
Assets | ' | ' |
Trading securities | 60,935,000 | 51,654,000 |
Recurring basis | Total Carried At Fair Value | U.S. government and government sponsored entities | Available-for-sale securities | ' | ' |
Assets | ' | ' |
Available-for-sale securities | 61,979,000 | 58,633,000 |
Recurring basis | Total Carried At Fair Value | Obligations of states, municipalities, and political subdivisions | Available-for-sale securities | ' | ' |
Assets | ' | ' |
Available-for-sale securities | 111,254,000 | 102,745,000 |
Recurring basis | Total Carried At Fair Value | Corporate debt | Available-for-sale securities | ' | ' |
Assets | ' | ' |
Available-for-sale securities | 269,017,000 | 237,916,000 |
Recurring basis | Total Carried At Fair Value | Corporate debt | Trading securities | ' | ' |
Assets | ' | ' |
Trading securities | 1,758,000 | 1,837,000 |
Recurring basis | Total Carried At Fair Value | RMBS | Available-for-sale securities | ' | ' |
Assets | ' | ' |
Available-for-sale securities | 69,284,000 | 82,623,000 |
Recurring basis | Total Carried At Fair Value | RMBS | Trading securities | ' | ' |
Assets | ' | ' |
Trading securities | 10,251,000 | 10,671,000 |
Recurring basis | Total Carried At Fair Value | CMBS | Available-for-sale securities | ' | ' |
Assets | ' | ' |
Available-for-sale securities | 22,134,000 | 7,547,000 |
Recurring basis | Total Carried At Fair Value | CMBS | Trading securities | ' | ' |
Assets | ' | ' |
Trading securities | 39,788,000 | 29,897,000 |
Recurring basis | Total Carried At Fair Value | CDO/ABS | Available-for-sale securities | ' | ' |
Assets | ' | ' |
Available-for-sale securities | 3,945,000 | 3,976,000 |
Recurring basis | Total Carried At Fair Value | CDO/ABS | Trading securities | ' | ' |
Assets | ' | ' |
Trading securities | 9,138,000 | 9,249,000 |
Recurring basis | Total Carried At Fair Value | Preferred stocks | Available-for-sale securities | ' | ' |
Assets | ' | ' |
Available-for-sale securities | 7,197,000 | 7,805,000 |
Recurring basis | Total Carried At Fair Value | Other long-term investments | Available-for-sale securities | ' | ' |
Assets | ' | ' |
Available-for-sale securities | $1,269,000 | $1,269,000 |
Fair_Value_Measurements_Detail2
Fair Value Measurements (Details 3) (USD $) | 3 Months Ended | 3 Months Ended | ||||||||||||||||||||||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 |
Investment securities | Investment securities | Available-for-sale securities | Available-for-sale securities | Trading securities | Bonds: | Bonds: | Corporate debt | Corporate debt | RMBS | RMBS | RMBS | CMBS | CMBS | CDO/ABS | CDO/ABS | CDO/ABS | CDO/ABS | CDO/ABS | Other long-term investments | Other long-term investments | Other long-term investments | |||
Available-for-sale securities | Available-for-sale securities | Available-for-sale securities | Available-for-sale securities | Available-for-sale securities | Available-for-sale securities | Trading securities | Available-for-sale securities | Available-for-sale securities | Available-for-sale securities | Available-for-sale securities | Available-for-sale securities | Trading securities | Trading securities | Available-for-sale securities | Available-for-sale securities | Available-for-sale securities | ||||||||
Changes in Level 3 assets and liabilities measured at fair value on a recurring basis | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance at beginning of period | ' | ' | $22,171 | $28,416 | $14,788 | $16,224 | $7,383 | $13,519 | $14,844 | $12,604 | $13,417 | $113 | $74 | ' | $2 | $153 | $1,200 | $800 | $800 | $7,383 | $12,192 | $1,380 | $1,269 | $1,269 |
Net gains (losses) included in: Other revenues | ' | ' | 269 | -207 | 247 | -210 | 22 | 247 | -210 | 254 | -168 | -7 | -34 | 14 | ' | -8 | ' | ' | ' | 8 | 3 | ' | ' | ' |
Net gains (losses) included in: Other comprehensive income (loss) | ' | ' | -331 | 500 | -331 | 500 | ' | -331 | 540 | -311 | 509 | -25 | 25 | ' | 5 | 6 | ' | ' | ' | ' | ' | -40 | ' | ' |
Purchases, sales, issues, settlements | ' | ' | -4,044 | -252 | -3,893 | -130 | -151 | -3,893 | -130 | -3,893 | 119 | ' | ' | -36 | ' | -149 | -100 | ' | ' | -115 | -122 | ' | ' | ' |
Transfers into Level 3 | ' | ' | 1,241 | ' | ' | ' | 1,241 | ' | ' | ' | ' | ' | ' | 1,241 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance at end of period | ' | ' | 19,306 | 28,457 | 10,811 | 16,384 | 8,495 | 9,542 | 15,044 | 8,654 | 13,877 | 81 | 65 | 1,219 | 7 | 2 | 1,100 | 800 | 800 | 7,276 | 12,073 | 1,340 | 1,269 | 1,269 |
Purchases, sales, or issues of investment securities | $0 | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair_Value_Measurements_Detail3
Fair Value Measurements (Details 4) (Level 3, Recurring, Corporate debt, Discounted cash flows) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2014 | Dec. 31, 2013 | |
Minimum | ' | ' |
Unobservable Input | ' | ' |
Yield (as a percent) | 2.83% | 2.68% |
Maximum | ' | ' |
Unobservable Input | ' | ' |
Yield (as a percent) | 2.89% | 8.48% |
Weighted Average | ' | ' |
Unobservable Input | ' | ' |
Yield (as a percent) | 2.86% | 4.67% |
Fair_Value_Measurements_Detail4
Fair Value Measurements (Details 5) (Non-recurring basis, USD $) | 3 Months Ended | |||||||||||||||||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 |
Real estate owned | Real estate owned | Commercial mortgage loans | Commercial mortgage loans | Fair Value Measurements Using Level 3 | Fair Value Measurements Using Level 3 | Fair Value Measurements Using Level 3 | Fair Value Measurements Using Level 3 | Fair Value Measurements Using Level 3 | Fair Value Measurements Using Level 3 | Total | Total | Total | Total | Total | Total | |||
Real estate owned | Real estate owned | Commercial mortgage loans | Commercial mortgage loans | Real estate owned | Real estate owned | Commercial mortgage loans | Commercial mortgage loans | |||||||||||
Assets measured at fair value on a non-recurring basis | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Assets at fair value | ' | ' | ' | ' | ' | ' | $61,915 | $83,404 | $49,982 | $71,469 | $11,933 | $11,935 | $61,915 | $83,404 | $49,982 | $71,469 | $11,933 | $11,935 |
Impairment Charges | ' | ' | 5,931 | 7,880 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Impairment Charges | $5,881 | $7,752 | ' | ' | ($50) | ($128) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |