5. Securitization of Receivables

During the three and six months ended June 30, 2013 and 2012, the Company sold financing receivables in securitization transactions, recognizing gains of $884,500 and $884,500 for the three and six months ended June 30, 2013, respectively, as compared to $535,814 and $1,630,871 for the three and six months ended June 30, 2012, respectively. In connection with securitization transactions, the Company retained servicing responsibilities and residual interests. In certain instances, the Company receives annual servicing fees ranging from 0.05% to 0.20% of the outstanding balance. The investors and the securitization trusts have no recourse to the Company’s other assets for failure of debtors to pay when due. The Company’s residual interests are subordinate to investors’ interests, and their values are subject to credit, prepayment and interest rate risks on the transferred financial assets.

As of June 30, 2013 and December 31, 2012, the fair values of retained interests, discount rates used in valuing those interests and the sensitivity to an increase in the discount rates of 5% and 10% were as follows:

In computing gains and losses on securitizations recorded during the three and six months ended June 30, 2013 and 2012, the discount rates were consistent with the discount rates presented in the above table. Based on the nature of the receivables and experience-to-date, the Company does not currently expect to incur any credit losses on the receivables sold.

The following is an analysis of certain cash flows between the Company and the securitization trusts for the six months ended June 30, 2013 and 2012:

As of June 30, 2013 and December 31, 2012, the Company’s managed receivables totaled $1,757,392,453 and $1,623,034,217, of which $1,423,052,308 and $1,431,635,500 were securitized, respectively. There were no credit losses during the three and six months ended June 30, 2013 and 2012, and no material delinquencies as of June 30, 2013 and December 31, 2012.