Cash America 2015 Annual Report Download - page 50

Consumer Loan Activities
Combined Consumer Loans
In addition to reporting consumer loans owned by the Company and consumer loans guaranteed by the
Company, which are either items accounted for in accordance with GAAP or disclosures required by GAAP, the
Company has provided combined consumer loans, which is a non-GAAP measure that combines the consumer
loans owned by the Company and those guaranteed by the Company. In addition, the Company has reported
combined consumer loans written and renewed, which is statistical data that is not included in the Company’s
financial statements. References throughout Management’s Discussion and Analysis of Financial Condition and
Results of Operations to renewed consumer loans include both renewals and extensions made by customers to their
existing loans in accordance with applicable laws.
Management believes these measures provide investors with important information needed to evaluate the
magnitude of potential loan losses and the opportunity for revenue performance of the consumer loan portfolio on
an aggregate basis. Management also believes that the comparison of the aggregate amounts from period to period
is more meaningful than comparing only the amounts reflected on the Company’s balance sheet since both revenue
and the loss provision for consumer loans are impacted by the aggregate amount of consumer loans owned by the
Company and those guaranteed by the Company as reflected in its financial statements.
Consumer Loan Fees, Net of Loss Provision
The following table sets forth interest and fees on consumer loans, the consumer loan loss provision and
consumerloanfees,netofthelossprovision,fortheyearsendedDecember31,2015and2014(dollarsin
thousands):
Year Ended December 31,
2015 2014
Short-term
loans
Installment
loans Total
Short-term
loans
Installment
loans Total
Consumer loan fees $56,878 $25,623 $82,501 $ 83,909 $ 13,765 $ 97,674
Less: consumer loan loss provision 11,361 11,744 23,105 23,269 7,740 31,009
Consumer loan fees, net loss provision $45,517 $13,879 $59,396 $60,640 $6,025 $66,665
Year-over-year change—$ $(15,123)$
7,854 $(7,269)$ (11,993) $ (1,194) $ (13,187)
Year-over-year change—% (24.9)% 130.4%(10.9)% (16.5)% (16.5)% (16.5)%
Consumer loan loss provision as a %
of consumer loan fees 20.0 %45.8%28.0 %27.7 %56.2 %31.7 %
Consumer loan fees, net of loss provision, decreased $7.3 million, or 10.9%, in 2015 compared to 2014,
primarilyduetoa$15.2million,or15.5%,decreaseinconsumerloanfees.The decrease in consumer loan fees was
primarily due to the closure and sale of certain store locations and the Company’s strategic decision to deemphasize
and eliminate its short-term consumer lending activities in many of its locations, resulting in a reduction of 37 and
311 locations offering consumer loans during 2015 and 2014, respectively. For more information, see “The
Company’s Business—Locations.” In addition, consumer loan fees decreased due to reduced consumer loan fees
from installment loans secured by a customer’s vehicle, which the Company ceased offering in 2015. The decrease
in consumer loan fees was partially offset by an increase in fees from an unsecured installment loan product
offering that was expanded into some of the Company’s lending locations during 2015.
In line with the current strategy to focus on its pawn lending operations, the Company expects to eliminate
consumer lending activities in approximately 47 locations in 2016. Most of this activity is expected to take place in
the first half of 2016.
46