Cash America 2011 Annual Report Download - page 99

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68
2009
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
Consumer loan balances and fees receivable:
Gross - Company owned $ 93,158 $ 111,973 $ 118,160 $ 136,139
Gross - Guaranteed by the Company(a) 28,342 33,686 42,768 49,862
Combined consumer loans and fees receivable, gross(b) $ 121,500 $ 145,659 $ 160,928 $ 186,001
Allowance and liability for losses on consumer loans 18,800 24,222 27,504 30,294
Combined consumer loans and fees receivable, net(b) $ 102,700 $ 121,437 $ 133,424 $ 155,707
Allowance and liability for losses and accrued third-
party lender losses as a % of combined consumer loans
and fees receivable, gross(b) 15.5% 16.6% 17.1% 16.3%
(
a
)
Represents loans originated by third-party lenders through the CSO programs, which are not included in the Company's
financial statements.
(b)
Non-GAAP measure.
The following table summarizes the consumer loan loss provision for 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
(
a
)
a
a
a
The loss provision on consumer loans guaranteed by the Company represents loans originated by third-party lenders through
the CSO programs 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.
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 2010, consumer loan loss
provision as a percent of combined consumer loans written 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 channel has been fully reserved as of December 31, 2010.