Cash America 2010 Annual Report Download - page 113

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CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
84
The Company stratifies the outstanding combined consumer loan portfolio by age, delinquency, and stage of
collection when assessing the adequacy of the allowance or accrual for losses. It uses historical collection performance
adjusted for recent portfolio performance trends to develop the expected loss rates used to establish either the
allowance or accrual. Increases in either the allowance or accrual are recorded as a consumer loan loss provision
expense in the consolidated statements of income. The Company charges off all consumer loans once they have been
in default for 60 consecutive days, or sooner if deemed uncollectible. Recoveries on losses previously charged to the
allowance are credited to the allowance when collected.
The allowance deducted from the carrying value of consumer loans was $38.9 million and $27.4 million at
December 31, 2010 and 2009, respectively. The accrual for losses on consumer loan guaranty obligations was $2.8
million and $2.9 million at December 31, 2010 and 2009, respectively, and is included in “Accounts payable and
accrued liabilities” on the Company’s consolidated balance sheets.
The components of Company-owned consumer loan portfolio and receivables at December 31, 2010 and 2009
was as follows (in thousands):
As of December 31,
2010 2009
Current $ 129,419 $ 97,806
N
onperforming loans 48,911 38,333
Total consumer loans, gross 178,330 136,139
Less: Allowance for losses 38,953 27,350
Consumer loans, net $ 139,377 $ 108,789
Changes in the allowance for losses for the Company-owned portfolios and the accrued loss for third-party
lender-owned portfolios during the years ended December 31, 2010, 2009 and 2008 were as follows (in thousands):
Year Ended December 31,
2010 2009 2008
Allowance for losses for Company-owned consumer loans:
Balance at beginning of period $ 27,350 $ 21,495 $ 25,676
Consumer loan loss provision 182,500 130,007 140,416
Charge-offs (197,611) (144,295) (170,585)
Recoveries 26,714 20,143 25,988
Balance at end of period $ 38,953 $ 27,350 $ 21,495
Accrual for third-party lender-owned consumer loans:
Balance at beginning of period $ 2,944 $ 2,135 $ 1,828
Increase (decrease) in loss provision (106) 809 307
Balance at end of period $ 2,838 $ 2,944 $ 2,135