Cash America 2012 Annual Report Download - page 103

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Consumer Loan Activities
Consumer Loan Fees
Consumer loan fees increased $107.6 million, or 21.9%, to $598.6 million in 2011 compared to $491.0 million
in 2010. The increase in consumer loan fees was primarily due to growth in the e-commerce segment from lending in the
foreign markets in which the Company operates and, to a lesser extent, the expansion of the Company’s installment loan
and line of credit products in the United States, offset by a decrease in revenue from domestic markets in which
consumer loans are no longer offered due to changes in laws and the absence of fees from the Company’s MLOC
services business. The Company stopped providing MLOC services in the United States on behalf of a third-party lender
in October 2010 when the lender discontinued offering MLOC advances.
Consumer Loan Loss Provision
The consumer loan loss provision increased by $43.3 million to $225.7 million in 2011 from $182.4 million in
2010, primarily due to higher consumer loan balances in 2011 compared to 2010. The loss provision as a percentage of
consumer loan fees increased to 37.7% in 2011 from 37.2% in 2010, primarily due to increased charge-offs in the
Company’s retail services segment as a result of growth in loans to new customers that have less established payments
histories. The loss provision as a percentage of consumer loan fees in the e-commerce segment was slightly lower in
2011 as compared to 2010, primarily due to a slightly lower loss provision in domestic markets, which was attributed to
the maturing of the short-term loan portfolio in 2011, leading to lower losses, partially offset by a higher loss provision
as a percentage of consumer loan fees in foreign markets due to growth in loans written and a higher percentage of new
customers.
The following table sets forth consumer loan fees by segment, adjusted for the deduction of the loan loss
provision for the years ended December 31, 2011 and 2010 (dollars in thousands):
Year Ended December 31,
2011 2010
Retail
Services E-Commerce Total Retail Services E-Commerce Total
Interest and fees on short-term loans $ 110,071 $ 400,810 $ 510,881 $ 112,679 $ 332,541 $ 445,220
Interest and fees on line of credit accounts - 30,590 30,590 - 33,655 33,655
Interest and fees on installment loans 9,121 48,054 57,175 1,294 10,783 12,077
Consumer loan fees $ 119,192 $ 479,454 $ 598,646 $ 113,973 $ 376,979 $ 490,952
Consumer loan loss provision 24,001 201,687 225,688 17,437 164,957 182,394
Consumer loan fees, net of loss provision $ 95,191 $ 277,767 $ 372,958 $ 96,536 $ 212,022 $ 308,558
Year-over-year change - $ $ (1,345) $ 65,745 $ 64,400 $ 181 $ 67,337 $ 67,518
Year-over-year change - % (1.4)% 31.0 % 20.9 % 0.2 % 46.5 % 28.0 %
Consumer loan loss provision as a % of
consumer loan fees 20.1 % 42.1 % 37.7 % 15.3 % 43.8 % 37.2 %
Combined Consumer Loans
Consumer Loan Balances
The outstanding combined portfolio balance of consumer loans, net of allowances and liability for estimated
losses, increased $90.0 million, or 47.6%, to $279.1 million at December 31, 2011 from $189.1 million at December 31,
2010, primarily due to increased demand for consumer loan products in domestic and foreign markets in both the retail
services and e-commerce segments, the expansion of the Company’s installment loan product in the domestic and