Cash America 2010 Annual Report Download - page 74

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45
The following table summarizes consumer loan balances outstanding as of December 31, 2010 and 2009
(dollars in thousands):
As of December 31,
2010 2009
Company
Owned(a)
Guaranteed
by the
Company(a) Combined(b)
Company
Owned(a)
Guaranteed
by the
Company(a) Combined(b)
Ending consumer loan balances:
Retail Services $ 51,953 $ 9,819 $ 61,772 $ 51,986 $ 11,688 $ 63,674
Online Lending 124,867 38,949 163,816 72,600 38,174 110,774
MLOC 1,510 - 1,510 11,553 - 11,553
Total ending loan balance, gross $ 178,330 $ 48,768 $ 227,098 $ 136,139 $ 49,862 $ 186,001
Less: Allowance and accrual for
losses(a) (38,953) (2,838) (41,791) (27,350) (2,944) (30,294)
Total ending loan balance, net $ 139,377 $ 45,930 $ 185,307 $ 108,789 $ 46,918 $ 155,707
(a) GAAP measure.
(b) Except for allowance and accrual for losses, amounts represent non-GAAP measures.
Loss experience. The Company maintains an allowance for losses on consumer loans at a level projected to be
adequate to absorb credit losses inherent in the outstanding consumer loan portfolio, as well as an accrual for expected
losses in the third-party lender-owned portfolios that are guaranteed by the Company. The allowance and the accrual
are based on historical trends in portfolio performance and the status of the balance owed by the customer. The
Company generally 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 combined allowance and accrual for losses as a percentage of combined consumer loans and fees
receivable increased in 2010 to 18.4%, from 16.3% in 2009, predominately due to the change in the mix of loans in the
e-commerce segment, as discussed in the “Consumer loan fees and consumer loan loss provision” section above. In
addition, the allowance as a percentage of combined consumer loans and fees increased as a result of higher
allowances on unpaid balances resulting from the sudden interruption of the iAdvance product in the MLOC services
channel during the fourth quarter of 2010, as the remaining outstanding balance of the consumer loans in the MLOC
services channel have been fully reserved as of December 31, 2010.
The following table shows consumer loan information by quarter for 2010 and 2009:
2010
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
Consumer loan balances and fees receivable:
Gross - Company owned $ 124,844 $ 152,018 $ 175,066 $ 178,330
Gross - Guaranteed by the Company 40,999 51,013 47,392 48,768
Combined consumer loans and fees receivable, gross(a) $ 165,843 $ 203,031 $ 222,458 $ 227,098
Allowance and accrual for losses on consumer loans 28,116 40,048 48,376 41,791
Combined consumer loans and fees receivable, net(a) $ 137,727 $ 162,983 $ 174,082 $ 185,307
Allowance and accrual for losses and accrued third-
party lender losses as a % of combined consumer loans
and fees receivable, net(a) 17.0% 19.7% 21.7% 18.4%
(a)
N
on-GAAP measure.        