Cash America 2013 Annual Report Download - page 109

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component of the e-commerce segment were 49.6% of consumer loan fees for the e-commerce segment and 41.8% of
consolidated consumer loan fees, up from 47.0% and 37.6% of the e-commerce segment and consolidated consumer
loan fees in 2011, respectively.
Consumer Loan Loss Provision
The consumer loan loss provision increased by $90.6 million, to $316.3 million in 2012 from $225.7 million in
2011. The loss provision as a percentage of consumer loan fees increased to 40.5% in 2012 from 37.7% in 2011. The
loss provision as a percentage of consumer loan fees increased in both the Company’s retail services and e-commerce
segments, primarily due to a greater mix of installment loans and line of credit accounts as a percentage of the total
consumer loan portfolio. Loss rates are influenced by the mix of new customers to existing customers and the mix of
short-term, line of credit accounts and installment loan products in the Company’s domestic and foreign operations. The
installment loan portfolio and line of credit account portfolios tend to have higher loss rates because installment loans
generally have a higher average loan amount relative to the other consumer loan products, and both line of credit
accounts and installment loans have lower gross yields relative to short-term loan products. Also contributing to the
increase was the expansion of the Company’s line of credit and installment loan products in the United States, which has
resulted in an increase in new customers. The loss provision as a percentage of consumer loan fees decreased in the
Company’s foreign e-commerce operations, mainly because the portfolio is beginning to have a higher percentage of
customers with established payment histories. Despite the decrease in foreign loss provision as a percentage of consumer
loan fees in 2012 compared to 2011, because the foreign e-commerce operations experienced higher loss rates than
domestic operations, and due to the greater mix of foreign consumer loans in 2012 compared to 2011, the foreign e-
commerce operations contributed to the increase in loss provision as a percentage of consumer loan fees in 2012.
The following table sets forth interest and fees on consumer loans by product type and segment, and the related
loan loss provision for the years ended December 31, 2012 and 2011 (dollars in thousands):
Year Ended December 31,
2012 2011
Short-
term loans
Line of
credit
accounts
Installment
loans Total
Short-term
loans
Line of
credit
accounts
Installment
loans Total
Retail services $ 109,972 $ - $ 11,920 $ 121,892 $ 110,071 $ - $ 9,121 $ 119,192
E-commerce
Domestic 202,537 73,572 56,643 332,752 199,258 30,590 24,304 254,152
Foreign 257,256 - 69,620 326,876 201,552 - 23,750 225,302
Total E-commerce 459,793 73,572 126,263 659,628 400,810 30,590 48,054 479,454
Consumer loan fees $ 569,765 $ 73,572 $ 138,183 $ 781,520 $ 510,881 $ 30,590 $ 57,175 $ 598,646
Less: consumer loan loss provision 202,325 34,793 79,176 316,294 180,798 7,825 37,065 225,688
Consumer loan fees, net
loss provision $ 367,440 $ 38,779 $ 59,007 $ 465,226 $ 330,083 $ 22,765 $ 20,110 $ 372,958
Year-over-year change - $ $ 37,357 $ 16,014 $ 38,897 $ 92,268 $ 45,684 $ 3,897 $ 14,819 $ 64,400
Year-over-year change - % 11.3% 70.3% 193.4% 24.7% 16.1% 20.7% 280.1% 20.9%
Consumer loan loss provision
as a % of consumer loan fees 35.5% 47.3% 57.3% 40.5% 35.4% 25.6% 64.8% 37.7%
Combined Consumer Loans
Consumer Loan Balances
The outstanding combined portfolio balance of consumer loans, net of allowances and liability for estimated
losses, increased $71.6 million, or 25.6%, to $350.7 million at December 31, 2012 from $279.1 million at December 31,
2011, primarily due to increased demand for all consumer loan products from the e-commerce segment in both domestic
and foreign markets.
The combined consumer loan balance includes $375.1 million and $285.9 million at December 31, 2012 and
2011, respectively, of Company-owned consumer loan balances before the allowance for losses of $85.7 million and