Cash America 2010 Annual Report Download - page 76

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47
2009 for the reasons mentioned in the paragraph above. The following table summarizes the consumer loan loss
provision for the years ended December 31, 2010 and 2009 (dollars in thousands):
Year Ended December 31,
2010 2009
Consumer loan loss provision:
Loss provision on Company owned consumer loans $ 182,500 $ 130,007
Loss provision on consumer loans guaranteed by the Company (106) (a) 809
Combined consumer loan loss provision $ 182,394 $ 130,816
Charge-offs, net of recoveries $ 170,897 $ 124,152
Combined consumer loan loss provision as a % of combined
consumer loans written(b) 6.3% 5.6%
Charge-offs (net of recoveries) as a % of combined consumer
loans written(b) 5.9% 5.3%
(a)c
The loss provision on consumer loans guaranteed by the Company for the year ended December 31, 2010 is a credit balance due to improved
collection rates in 2010 over 2009 and slightly lower volume of loans outstanding.
(b)
N
on-GAAP measure.
Due to the short-term nature of the consumer loan product and the high velocity of loans written, seasonal
trends are evidenced in quarter-to-quarter performance. In the typical business cycle, the consumer loan loss provision
as a percent of combined consumer loans written is lowest in the first quarter and increases throughout the year, with
the final two quarters generally combining for the peak levels of loss provision expense. During the current year,
consumer loan loss provision as a percent of combined consumer loans written has decreased from the second quarter
to the third quarter, predominantly due to an improvement in charge-offs as a percentage of consumer loans written.
The fourth quarter consumer loan loss provision as a percent of combined consumer loans written was exceptionally
high due to the additional loan losses associated with the sudden interruption of the MLOC loan portfolio. The
remaining outstanding balance of the consumer loans in the MLOC services channel has been fully reserved as of
December 31, 2010.
The following table shows the Company’s loss experience by quarter for 2010 and 2009:
2010
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
Fiscal
Year
Consumer loans written:
Company owned $ 419,699 $ 470,077 $ 533,436 $ 479,960 $ 1,903,172
Guaranteed by the Company 225,551 248,386 287,677 244,290 1,005,904
Combined consumer loans written(a) $ 645,250 $ 718,463 $ 821,113 $ 724,250 $ 2,909,076
Combined consumer loan loss provision as a % of
combined consumer loans written (a) 5.3% 6.3% 6.2% 7.2% 6.3%
Charge-offs (net of recoveries) as a % of combined
consumer loans written (a) 5.6% 4.6% 5.2% 8.1% 5.9%
Combined consumer loan loss provision as a % of
consumer loan fees (a) 31.3% 38.8% 37.9% 39.8% 37.2%
(a)
N
on-GAAP measure.