Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Sep. 30, 2013 | Dec. 03, 2013 | Mar. 31, 2013 | |
Document Information [Line Items] | ' | ' | ' |
Document Type | '10-K | ' | ' |
Amendment Flag | 'false | ' | ' |
Document Period End Date | 30-Sep-13 | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Trading Symbol | 'ASFI | ' | ' |
Entity Registrant Name | 'ASTA FUNDING INC | ' | ' |
Entity Central Index Key | '0001001258 | ' | ' |
Current Fiscal Year End Date | '--09-30 | ' | ' |
Entity Well-known Seasoned Issuer | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Filer Category | 'Accelerated Filer | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 12,974,239 | ' |
Entity Public Float | ' | ' | $89,066,000 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Sep. 30, 2013 | Sep. 30, 2012 |
ASSETS | ' | ' |
Cash and cash equivalents | $35,179,000 | $4,953,000 |
Investments: | ' | ' |
Available-for-sale | 58,035,000 | 58,712,000 |
Certificates of deposit | ' | 42,682,000 |
Restricted cash | 968,000 | 1,088,000 |
Consumer receivables acquired for liquidation (at net realizable value) | 57,900,000 | 86,887,000 |
Other investments, net | 35,758,000 | 18,596,000 |
Due from third party collection agencies and attorneys | 1,169,000 | 2,042,000 |
Prepaid and income taxes receivable | 1,496,000 | 2,057,000 |
Furniture and equipment (net of accumulated depreciation of $4,136,000 in 2013 and $3,696,000 in 2012) | 1,106,000 | 821,000 |
Deferred income taxes | 10,443,000 | 10,410,000 |
Other assets | 5,793,000 | 4,916,000 |
Total assets | 207,847,000 | 233,164,000 |
Liabilities | ' | ' |
Non-recourse debt | 35,760,000 | 61,463,000 |
Other liabilities | 2,486,000 | 2,920,000 |
Dividends payable | ' | 260,000 |
Total liabilities | 38,246,000 | 64,643,000 |
Commitments and contingencies | ' | ' |
STOCKHOLDERS' EQUITY | ' | ' |
Preferred stock, $.01 par value; authorized 5,000,000; issued and outstanding - none | ' | ' |
Common stock, $.01 par value, authorized 30,000,000 shares; issued - 14,917,977 at September 30, 2013 and 14,778,956 at September 30, 2012; and outstanding - 12,974,239 at September 30, 2013 and 13,006,918 at September 30, 2012 | 149,000 | 148,000 |
Additional paid-in capital | 79,104,000 | 77,024,000 |
Retained earnings | 109,011,000 | 107,303,000 |
Accumulated other comprehensive (loss) income, net of income taxes | -674,000 | 241,000 |
Treasury stock (at cost), 1,943,738 shares at September 30, 2013 and 1,772,038 shares at September 30, 2012 | -17,805,000 | -16,226,000 |
Non-controlling interest | -184,000 | 31,000 |
Total stockholders' equity | 169,601,000 | 168,521,000 |
Total liabilities and stockholders' equity | $207,847,000 | $233,164,000 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2013 | Sep. 30, 2012 |
Furniture and equipment, accumulated depreciation | $4,136,000 | $3,696,000 |
Preferred stock, par value | $0.01 | $0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | ' | ' |
Preferred stock, shares outstanding | ' | ' |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 30,000,000 | 30,000,000 |
Common stock, shares issued | 14,917,977 | 14,778,956 |
Common stock, shares outstanding | 12,974,239 | 13,006,918 |
Treasury stock, shares | 1,943,738 | 1,772,038 |
Consolidated_Statements_of_Inc
Consolidated Statements of Income (USD $) | 12 Months Ended | ||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2011 | |||
Revenues: | ' | ' | ' | ||
Finance income, net | $34,363,000 | [1] | $40,599,000 | [2] | $42,610,000 |
Other income (includes ($252,000), $339,000, and $0 during the years ended September 30, 2013, 2012 and 2011, respectively, of accumulated other comprehensive income reclassifications for unrealized net (losses) / gains on available for sale securities). | 8,049,000 | 3,903,000 | 557,000 | ||
Total Revenue | 42,412,000 | 44,502,000 | 43,167,000 | ||
Expenses: | ' | ' | ' | ||
General and administrative expenses | 24,212,000 | 23,640,000 | 21,807,000 | ||
Interest expense (related party - 2013, $0; 2012, $0; 2011, $86,000) | 1,300,000 | 2,539,000 | 3,016,000 | ||
Impairments of consumer receivables acquired for liquidation | 12,592,000 | 1,383,000 | 721,000 | ||
Total expenses | 38,104,000 | 27,562,000 | 25,544,000 | ||
Income before income tax | 4,308,000 | 16,940,000 | 17,623,000 | ||
Income tax expense (includes (taxes) / tax benefit of ($100,000), $137,000 and $0 during the years ended September 30, 2013, 2012, and 2011, respectively) | 1,164,000 | 6,872,000 | 7,102,000 | ||
Net income | 3,144,000 | 10,068,000 | 10,521,000 | ||
Less: net income attributable to non-controlling interest | 406,000 | 31,000 | ' | ||
Net income attributable to Asta Funding, Inc. | $2,738,000 | $10,037,000 | $10,521,000 | ||
Net income per share attributable to Asta Funding, Inc.: | ' | ' | ' | ||
Basic | $0.21 | $0.71 | $0.72 | ||
Diluted | $0.21 | $0.70 | $0.71 | ||
Weighted average number of common shares outstanding: | ' | ' | ' | ||
Basic | 12,952,150 | 14,077,650 | 14,626,973 | ||
Diluted | 13,216,051 | 14,321,381 | 14,827,608 | ||
[1] | Includes $33.2 million derived from fully amortized pools. Finance income recognized from account sales amounted to $2.0 million. | ||||
[2] | Includes $36.4 million derived from fully amortized pools. Finance income recognized from account sales amounted to $0.1 million. |
Consolidated_Statements_of_Inc1
Consolidated Statements of Income (Parenthetical) (USD $) | 12 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2011 | |
Reclassifications for unrealized net (losses) / gains on available for sale securities | ($252,000) | $339,000 | $0 |
Interest expense to Related Party | 0 | 0 | 86,000 |
Income tax expense,(taxes) / tax benefit | ($100,000) | $137,000 | $0 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 12 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2011 | |
Comprehensive income is as follows: | ' | ' | ' |
Net income | $3,144,000 | $10,068,000 | $10,521,000 |
Net unrealized securities (loss) / gain, net of tax benefit / (taxes) of $705,000, ($495,000) and $196,000, during the years ended September 30, 2013, 2012 and 2011, respectively. | -1,067,000 | 733,000 | -290,000 |
Reclassification adjustments for securities sold, net of (taxes) / tax benefit of ($100,000) and $137,000, during years ended September 30, 2013 and 2012, respectively. | 152,000 | -202,000 | ' |
Foreign currency translation, net | ' | ' | -9,000 |
Other comprehensive (loss) income | -915,000 | 531,000 | -299,000 |
Total comprehensive income | $2,229,000 | $10,599,000 | $10,222,000 |
Consolidated_Statements_of_Com1
Consolidated Statements of Comprehensive Income (Parenthetical) (USD $) | 12 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2011 | |
Net unrealized securities (loss) gain,(taxes)/tax benefit | $705,000 | ($495,000) | $196,000 |
Reclassification adjustments for securities,(taxes)/tax benefit | ($100,000) | $137,000 | ' |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Equity (USD $) | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Non- Controlling Interest | |
Beginning balance at Sep. 30, 2010 | $161,898,000 | $146,000 | $72,717,000 | $89,026,000 | $9,000 | ' | ' | |
Beginning balance (in shares) at Sep. 30, 2010 | ' | 14,600,423 | ' | ' | ' | ' | ' | |
Exercise of options (in shares) | 6,268 | 6,268 | ' | ' | ' | ' | ' | |
Exercise of options | 21,000 | ' | 21,000 | ' | ' | ' | ' | |
Stock based compensation expense | 2,055,000 | ' | 2,055,000 | ' | ' | ' | ' | |
Restricted stock | ' | 32,765 | ' | ' | ' | ' | ' | |
Dividends | -1,170,000 | ' | ' | -1,170,000 | ' | ' | ' | |
Purchase of treasury stock | -70,000 | ' | ' | ' | ' | -70,000 | [1] | ' |
Net income | 10,521,000 | ' | ' | 10,521,000 | ' | ' | ' | |
Foreign currency translation | -9,000 | ' | ' | ' | -9,000 | ' | ' | |
Unrealized gain (loss) on marketable securities | -290,000 | ' | ' | ' | -290,000 | ' | ' | |
Ending balance at Sep. 30, 2011 | 172,956,000 | 146,000 | 74,793,000 | 98,377,000 | -290,000 | -70,000 | [1] | ' |
Ending balance (in shares) at Sep. 30, 2011 | ' | 14,639,456 | ' | ' | ' | ' | ' | |
Exercise of options (in shares) | 139,500 | 139,500 | ' | ' | ' | ' | ' | |
Exercise of options | 610,000 | 2,000 | 608,000 | ' | ' | ' | ' | |
Stock based compensation expense | 1,623,000 | ' | 1,623,000 | ' | ' | ' | ' | |
Dividends | -1,111,000 | ' | ' | -1,111,000 | ' | ' | ' | |
Purchase of treasury stock | -16,156,000 | ' | ' | ' | ' | -16,156,000 | [1] | ' |
Net income | 10,068,000 | ' | ' | 10,037,000 | ' | ' | 31,000 | |
Unrealized gain (loss) on marketable securities | 531,000 | ' | ' | ' | 531,000 | ' | ' | |
Ending balance at Sep. 30, 2012 | 168,521,000 | 148,000 | 77,024,000 | 107,303,000 | 241,000 | -16,226,000 | [1] | 31,000 |
Ending balance (in shares) at Sep. 30, 2012 | ' | 14,778,956 | ' | ' | ' | ' | ' | |
Exercise of options (in shares) | 36,700 | 36,700 | ' | ' | ' | ' | ' | |
Exercise of options | 125,000 | ' | 125,000 | ' | ' | ' | ' | |
Stock based compensation expense | 1,956,000 | ' | 1,956,000 | ' | ' | ' | ' | |
Restricted stock | ' | 102,321 | ' | ' | ' | ' | ' | |
Restricted stock | ' | 1,000 | -1,000 | ' | ' | ' | ' | |
Dividends | -1,030,000 | ' | ' | -1,030,000 | ' | ' | ' | |
Purchase of treasury stock | -1,579,000 | ' | ' | ' | ' | -1,579,000 | [1] | ' |
Net income | 3,144,000 | ' | ' | 2,738,000 | ' | ' | 406,000 | |
Unrealized gain (loss) on marketable securities | -915,000 | ' | ' | ' | -915,000 | ' | ' | |
Distributions to non-controlling interest | -621,000 | ' | ' | ' | ' | ' | -621,000 | |
Ending balance at Sep. 30, 2013 | $169,601,000 | $149,000 | $79,104,000 | $109,011,000 | ($674,000) | ($17,805,000) | [1] | ($184,000) |
Ending balance (in shares) at Sep. 30, 2013 | ' | 14,917,977 | ' | ' | ' | ' | ' | |
[1] | Treasury shares are as follows: September 30, 2011, 8,900; Purchase of treasury stock, 1,763,138; September 30, 2012, 1,772,038. September 30, 2012, 1,772,038; Purchase of treasury stock, 171,700; September 30, 2013, 1,943,738. |
Consolidated_Statements_of_Sto1
Consolidated Statements of Stockholders' Equity (Parenthetical) | 12 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2011 | |
Treasury stock, shares | 1,943,738 | 1,772,038 | 8,900 |
Purchase of treasury Stock | ' | 171,700 | 1,763,138 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2011 | |
Cash flows from operating activities: | ' | ' | ' |
Net income | $3,144,000 | $10,068,000 | $10,521,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' | ' |
Depreciation and amortization | 440,000 | 380,000 | 262,000 |
Deferred income taxes | 326,000 | 3,393,000 | 4,611,000 |
Impairments of consumer receivables acquired for liquidation | 12,592,000 | 1,383,000 | 721,000 |
Stock based compensation | 1,956,000 | 1,623,000 | 2,055,000 |
Loss (gain) on sale of available-for-sale securities | 252,000 | -339,000 | ' |
Changes in: | ' | ' | ' |
Prepaid and income tax receivable | 561,000 | 1,281,000 | -3,142,000 |
Due from third party collection agencies and attorneys | 873,000 | 42,000 | 1,444,000 |
Other assets | -631,000 | -190,000 | -771,000 |
Other liabilities | -434,000 | -247,000 | 1,041,000 |
Net cash provided by operating activities | 19,079,000 | 17,394,000 | 16,742,000 |
Cash flows from investing activities: | ' | ' | ' |
Purchase of consumer receivables acquired for liquidation | -3,340,000 | -2,495,000 | -7,435,000 |
Principal collected on consumer receivables acquired for liquidation | 19,302,000 | 29,353,000 | 38,360,000 |
Principal collected on consumer receivable accounts represented by account sales | 433,000 | 67,000 | 235,000 |
Effect of foreign exchange on consumer receivables acquired for liquidation | ' | ' | -45,000 |
Purchase of available-for-sale securities | -34,171,000 | -66,625,000 | -14,000,000 |
Proceeds from sales of available-for-sale securities | 33,076,000 | 22,656,000 | ' |
Purchase of certificates of deposit | ' | -45,121,000 | -3,980,000 |
Proceeds from maturities of certificates of deposit | 42,682,000 | 11,499,000 | 3,854,000 |
Other investments - advances | -30,963,000 | -22,549,000 | ' |
Other investments - receipts | 13,801,000 | 3,953,000 | ' |
Capital expenditures | -725,000 | -638,000 | -475,000 |
Net cash provided by (used in) investing activities | 40,095,000 | -69,900,000 | 16,514,000 |
Cash flows from financing activities: | ' | ' | ' |
Proceeds from exercise of stock options | 125,000 | 610,000 | 21,000 |
Purchase of treasury stock | -1,579,000 | -16,156,000 | -70,000 |
Change in restricted cash | 120,000 | -57,000 | 273,000 |
Dividends paid | -1,290,000 | -1,144,000 | -1,169,000 |
Distributions to non-controlling interest | -621,000 | ' | ' |
Repayments of non-recourse debt, net | -25,703,000 | -10,141,000 | -18,879,000 |
Repayments under subordinated debt - related party | ' | ' | -4,386,000 |
Net cash used in financing activities | -28,948,000 | -26,888,000 | -24,210,000 |
Net increase (decrease) in cash and cash equivalents | 30,226,000 | -79,394,000 | 9,046,000 |
Cash and cash equivalents at beginning of year | 4,953,000 | 84,347,000 | 75,301,000 |
Cash and cash equivalents at end of year | 35,179,000 | 4,953,000 | 84,347,000 |
Cash paid for: | ' | ' | ' |
Interest (related party: 2013 - $0; 2012 - $0; 2011 - $122,000) | 1,822,000 | 2,570,000 | 3,114,000 |
Income taxes | ' | $2,002,000 | $5,647,000 |
Consolidated_Statements_of_Cas1
Consolidated Statements of Cash Flows (Parenthetical) (USD $) | 12 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2011 | |
Interest paid to Related party | $0 | $0 | $122,000 |
The_Company_and_its_Significan
The Company and its Significant Accounting Policies | 12 Months Ended | ||||||||||||||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||||||||||||||
The Company and its Significant Accounting Policies | ' | ||||||||||||||||||||||||||||||||||||
NOTE A — THE COMPANY AND ITS SIGNIFICANT ACCOUNTING POLICIES | |||||||||||||||||||||||||||||||||||||
[1] The Company: | |||||||||||||||||||||||||||||||||||||
Asta Funding, Inc., together with its wholly owned significant operating subsidiaries Palisades Collection LLC, Palisades Acquisition XVI, LLC (“Palisades XVI”), VATIV Recovery Solutions LLC (“VATIV”), ASFI Pegasus Holdings, LLC (“APH”), Fund Pegasus, LLC (“Fund Pegasus”), and other subsidiaries, not all wholly owned, and not considered material (collectively, the “Company”), is engaged in the business of purchasing, managing for its own account and servicing distressed consumer receivables, including charged-off receivables, semi-performing receivables, performing receivables and investment in litigation related receivables. The primary charged-off receivables are accounts that have been written-off by the originators and may have been previously serviced by collection agencies. Semi-performing receivables are accounts whereby the debtor is currently making partial or irregular monthly payments, but the accounts may have been written-off by the originators. Performing receivables are accounts whereby the debtor is making regular monthly payments that may or may not have been delinquent in the past. Distressed consumer receivables are the unpaid debts of individuals to banks, finance companies and other credit providers. A large portion of the Company’s distressed consumer receivables are, MasterCard®, Visa®, and other credit card accounts which were charged-off by the issuers for non-payment. The Company acquires these portfolios at substantial discounts from their face values. The discounts are based on the characteristics (issuer, account size, debtor location and age of debt) of the underlying accounts of each portfolio. Litigation related receivables are semi-performing investments whereby the Company is assigned the revenue stream from the proceeds received. | |||||||||||||||||||||||||||||||||||||
In addition, the Company, owns 80% of Pegasus Funding, LLC (“Pegasus”), which invests in funding personal injury claims. | |||||||||||||||||||||||||||||||||||||
The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and industry practices. | |||||||||||||||||||||||||||||||||||||
[1A] Liquidity: | |||||||||||||||||||||||||||||||||||||
The Company’s cash requirements have been and will continue to be significant. In the past, we have depended upon external financing to acquire consumer receivables, fund operating expenses, interest and income taxes. If approved, dividends paid is also a significant use of cash. We have depended solely on operating cash flow to fund the acquisition of portfolios, pay operating expenses, dividends, and taxes. As of September 30, 2013, the outstanding amount on the Bank of Montreal (“BMO”) facility (“Receivables Financing Agreement”) that financed the $6.9 billion in face value receivables for a purchase price of $300 million, (the “Portfolio Purchase”) is $35.8 million. We continue to pay down the balance and the interest from the collections of the receivables under the Portfolio Purchase. See Note F — Non-Recourse Debt for further information on the Settlement Agreement signed in August 2013. | |||||||||||||||||||||||||||||||||||||
Net collections decreased $15.9 million or 22.7% from $70.0 million in fiscal year 2012 to $54.1 million in fiscal year 2013. Although the Company’s collections decreased from the prior year, the Company believes its net cash collections over the next twelve months, coupled with its current liquid cash balances, will be sufficient to cover its operating expenses, service debt and pay interest. | |||||||||||||||||||||||||||||||||||||
[2] Principles of consolidation: | |||||||||||||||||||||||||||||||||||||
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. | |||||||||||||||||||||||||||||||||||||
[3] Cash and cash equivalents and restricted cash: | |||||||||||||||||||||||||||||||||||||
The Company considers all highly liquid investments with a maturity of three months or less at the date of purchase to be cash equivalents. | |||||||||||||||||||||||||||||||||||||
Cash balances are maintained at various depository institutions and are insured by the Federal Deposit Insurance Corporation (“FDIC”). The Company had cash balances with 7 banks that exceeded the balance insured by the FDIC by approximately $31.1 million at September 30, 2013. The Company had cash balances with 2 banks which amounted to $26.4 million at September 30, 2013. | |||||||||||||||||||||||||||||||||||||
The restricted cash at September 30, 2013 represents cash on hand, substantially all of which is designated to be paid to our lender subsequent to September 30, 2013. The lender has mandated in which depository institutions the cash is to be maintained. | |||||||||||||||||||||||||||||||||||||
[4] Investments | |||||||||||||||||||||||||||||||||||||
Available-for-Sale | |||||||||||||||||||||||||||||||||||||
Investments that the Company intends to hold for an indefinite period of time, but not necessarily to maturity, are classified as available-for-sale and are carried at fair value. Unrealized gains and losses on available-for-sale securities are determined using the specific-identification method. | |||||||||||||||||||||||||||||||||||||
Declines in the fair value of individual available-for-sale securities below their respective costs that are other than temporary will result in write-downs of the individual securities to their fair value. Factors affecting the determination of whether an other-than-temporary impairment has occurred include: a downgrading of the security by a rating agency, a significant deterioration in the financial condition of the issuer, or that management would not have the ability to hold a security for a period of time sufficient to allow for any anticipated recovery in fair value. | |||||||||||||||||||||||||||||||||||||
Certificates of Deposit | |||||||||||||||||||||||||||||||||||||
There were no certificates of deposit at September 30, 2013. Certificates of deposit at September 30, 2012 had maturities greater than three months at the date of purchase. | |||||||||||||||||||||||||||||||||||||
[5] Income recognition, Impairments and Accretable yield adjustments: | |||||||||||||||||||||||||||||||||||||
Income Recognition | |||||||||||||||||||||||||||||||||||||
The Company accounts for its investment in consumer receivables acquired for liquidation using the interest method under the guidance of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 310, Receivables — Loans and Debt Securities Acquired with Deteriorated Credit Quality, (“ASC 310”). In ASC 310 static pools of accounts are established. These pools are aggregated based on certain common risk criteria. Each static pool is recorded at cost and is accounted for as a single unit for the recognition of income, principal payments and loss provision. | |||||||||||||||||||||||||||||||||||||
Once a static pool is established for a quarter, individual receivable accounts are not added to the pool (unless replaced by the seller) or removed from the pool (unless sold or returned to the seller). ASC 310 requires that the excess of the contractual cash flows over expected cash flows not be recognized as an adjustment of revenue or expense or on the balance sheet. ASC 310 initially freezes the internal rate of return (“IRR”), estimated when the accounts receivable are purchased, as the basis for subsequent impairment testing. Significant increases in actual, or expected future cash flows are recognized prospectively through an upward adjustment of the IRR over a portfolio’s remaining life. Any increase to the IRR then becomes the new benchmark for impairment testing. Under ASC 310, rather than lowering the estimated IRR if the collection estimates are not received or projected to be received, the carrying value of a pool would be written down to maintain the then current IRR. | |||||||||||||||||||||||||||||||||||||
Finance income is recognized on cost recovery portfolios after the carrying value has been fully recovered through collections or amounts written down. | |||||||||||||||||||||||||||||||||||||
The Company accounts for its investments in personal injury claims at an agreed upon interest rate, in anticipation of a future settlement. The interest purchased by Pegasus in each claim will consist of the right to receive from such claimant part of the proceeds or recoveries which such claimant receives by reason of a settlement, judgment or reward with respect to such claimant’s claim. Open case revenue is estimated, recognized and accrued at a rate based on the expected realization and underwriting guidelines and facts and circumstances for each individual case. These personal injury claims are non-recourse. | |||||||||||||||||||||||||||||||||||||
When a case is closed and the cash is received for the advance provided to a claimant, revenue is recognized based upon the contractually agreed upon interest rate, and, if applicable, adjusted for any changes due to a settled amount and fees charged to the claimant. | |||||||||||||||||||||||||||||||||||||
The funding of matrimonial actions is on a non-recourse basis. Revenues are recognized under the cost recovery method. | |||||||||||||||||||||||||||||||||||||
Impairments and accretable yield adjustments | |||||||||||||||||||||||||||||||||||||
The Company accounts for its impairments in accordance with ASC 310, which provides guidance on how to account for differences between contractual and expected cash flows from an investor’s initial investment in loans or debt securities acquired in a transfer if those differences are attributable, at least in part, to credit quality. Increases in expected cash flows are recognized prospectively through an adjustment of the internal rate of return while decreases in expected cash flows are recognized as impairments. Impairments of approximately $12.6 million were recorded in the fiscal year ended September 30, 2013. An impairment of approximately $1.4 million was recorded in the fiscal year ended September 30, 2012 and $0.7 million was recorded in fiscal year 2011. Finance income is not recognized on cost recovery method portfolios until the cost of the portfolio is fully recovered. Collection projections are performed on both interest method and cost recovery method portfolios. With regard to the cost recovery portfolios, if collection projections indicate the carrying value will not be recovered, a write down in value is required. There were no accretable yield adjustments recorded in the fiscal years ended September 30, 2013, 2012 and 2011. | |||||||||||||||||||||||||||||||||||||
The recognition of income under ASC 310 is dependent on the Company having the ability to develop reasonable expectations of both the timing and amount of cash flows to be collected. In the event the Company cannot develop a reasonable expectation as to both the timing and amount of cash flows expected to be collected, ASC 310 permits the change to the cost recovery method. The Company will recognize income only after it has recovered its carrying value. As of September 30, 2013, the carrying value of the Portfolio Purchase was approximately $43.4 million. There can be no assurance as to when or if the carrying value will be recovered. | |||||||||||||||||||||||||||||||||||||
The Company’s analysis of the timing and amount of cash flows to be generated by its portfolio purchases and investments are based on the following attributes: | |||||||||||||||||||||||||||||||||||||
• | the type of receivable, the location of the debtor and the number of collection agencies previously attempting to collect the receivables in the portfolio. The Company has found that there are better states to try to collect receivables and the Company factors in both better and worse states when establishing their initial cash flow expectations; | ||||||||||||||||||||||||||||||||||||
• | the average balance of the receivables influences our analysis in that lower average balance portfolios tend to be more collectible in the short-term and higher average balance portfolios are more appropriate for the Company’s lawsuit strategy and thus yield better results over the longer term. As the Company has significant experience with both types of balances, it can factor these variables into its initial expected cash flows; | ||||||||||||||||||||||||||||||||||||
• | the age of the receivables, the number of days since charge-off, any payments since charge-off, and the credit guidelines of the credit originator also represent factors taken into consideration in our estimation process. For example, older receivables might be more difficult and/or require more time and effort to collect; | ||||||||||||||||||||||||||||||||||||
• | past history and performance of similar assets acquired. As the Company purchases portfolios of like assets, it accumulates a significant historical data base on the tendencies of debtor repayments and factor this into its initial expected cash flows; | ||||||||||||||||||||||||||||||||||||
• | the Company’s ability to analyze accounts and resell accounts that meet its criteria; | ||||||||||||||||||||||||||||||||||||
• | jobs or property of the customers found within portfolios. With our business model, this is of particular importance. Customers with jobs or property are more likely to repay their obligation through the lawsuit strategy and, conversely, customers without jobs or property are less likely to repay their obligation. The Company believes that customers with jobs or property are more likely to repay because courts have mandated the debtor must pay the debt. Ultimately, the debtor with property will pay to clear title or release a lien. The Company also believes that these customers generally might take longer to repay and that is factored into its initial expected cash flows; and | ||||||||||||||||||||||||||||||||||||
• | credit standards of the issuer. | ||||||||||||||||||||||||||||||||||||
The Company acquires accounts that have experienced deterioration of credit quality between origination and the date of its acquisition of the accounts. The amount invested in a portfolio of accounts reflects our determination that it is probable we will be unable to collect all amounts due according to the portfolio of accounts’ contractual terms. The Company considers the expected payments and estimates the amount and timing of undiscounted expected principal, interest and other cash flows for each acquired portfolio coupled with expected cash flows from accounts available for sale. The excess of this amount over the cost of the portfolio, representing the excess of the accounts’ cash flows expected to be collected over the amount paid, is accreted into income recognized on finance receivables accounted for on the interest method over the expected remaining life of the portfolio. | |||||||||||||||||||||||||||||||||||||
The Company believes it has significant experience in acquiring certain distressed consumer receivable portfolios at a significant discount to the amount actually owed by underlying customers. The Company invests in these portfolios only after both qualitative and quantitative analyses of the underlying receivables are performed and a calculated purchase price is paid so that it believes its estimated cash flow offers an adequate return on acquisition costs after servicing expenses. Additionally, when considering larger portfolio purchases of accounts, or portfolios from issuers with whom the Company has limited experience, it has the added benefit of soliciting its third party collection agencies and attorneys for their input on liquidation rates and, at times, incorporates such input into the estimates it uses for its expected cash flows. | |||||||||||||||||||||||||||||||||||||
As a result of the challenging economic environment and the impact it has had on collections, for portfolio purchases acquired in fiscal year 2013, the Company’s expectation of recovering 100% of its invested capital is a 24-39 month period, with the expectation of recovering 130-140% over 7 years. The 2013 time frame of expectations have remained unchanged from fiscal year 2012. The Company routinely monitors these expectations against the actual cash flows and, in the event the cash flows are below expectations and the Company believes there are no reasons relating to mere timing differences or explainable delays (such as can occur particularly when the court system is involved) for the reduced collections, an impairment is recorded on portfolios accounted for on the interest method. Conversely, in the event the cash flows are in excess of its expectations and the reason is due to timing, the Company would defer the “excess” collection as deferred revenue. | |||||||||||||||||||||||||||||||||||||
[6] Commissions and fees: | |||||||||||||||||||||||||||||||||||||
Commissions and fees are the contractual commissions earned by third party collection agencies and attorneys, and direct costs associated with the collection effort- generally court costs. The Company expects to continue to purchase portfolios and utilize third party collection agencies and attorney networks. | |||||||||||||||||||||||||||||||||||||
[7] Furniture, equipment and leasehold improvements: | |||||||||||||||||||||||||||||||||||||
Furniture and equipment is stated at cost. Depreciation is provided using the straight-line method over the estimated useful lives of the assets (5 to 7 years). Amortization on leasehold improvements is provided by the straight line-method of the remaining life of the respective lease. An accelerated depreciation method is used for tax purposes. | |||||||||||||||||||||||||||||||||||||
[8] Income taxes: | |||||||||||||||||||||||||||||||||||||
Deferred federal and state taxes arise from (i) recognition of finance income collected for tax purposes, but not yet recognized for financial reporting; (ii) provision for impairments/credit losses, all resulting in timing differences between financial accounting and tax reporting, and (iii) amortization of leasehold improvements resulting in timing differences between financial accounting and tax reporting. | |||||||||||||||||||||||||||||||||||||
[9] Net income per share: | |||||||||||||||||||||||||||||||||||||
Basic per share data is determined by dividing net income by the weighted average shares outstanding during the period. Diluted per share data is computed by dividing net income by the weighted average shares outstanding, assuming all dilutive potential common shares were issued. The assumed proceeds from the exercise of dilutive options are calculated using the treasury stock method based on the average market price for the period. | |||||||||||||||||||||||||||||||||||||
The following table presents the computation of basic and diluted per share data for the fiscal years ended September 30, 2013, 2012 and 2011: | |||||||||||||||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||||||||||||||
Net | Weighted | Per | Net | Weighted | Per | Net | Weighted | Per | |||||||||||||||||||||||||||||
Income | Average | Share | Income | Average | Share | Income | Average | Share | |||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||
Basic | $ | 2,738,000 | 12,952,150 | $ | 0.21 | $ | 10,037,000 | 14,077,650 | $ | 0.71 | $ | 10,521,000 | 14,626,973 | $ | 0.72 | ||||||||||||||||||||||
Dilutive effect of stock options | 263,901 | 243,731 | (0.01 | ) | 200,635 | (0.01 | ) | ||||||||||||||||||||||||||||||
Diluted | $ | 2,738,000 | 13,216,051 | $ | 0.21 | $ | 10,037,000 | 14,321,381 | $ | 0.7 | $ | 10,521,000 | 14,827,608 | $ | 0.71 | ||||||||||||||||||||||
At September 30, 2013, 606,332 options at a weighted average exercise price of $8.01 were not included in the diluted earnings per share calculation as they were anti-dilutive. At September 30, 2012, 1,210,396 options at a weighted average exercise price of $12.23 were not included in the diluted earnings per share calculation as they were anti-dilutive. At September 30, 2011, 986,732 options at a weighted average exercise price of $13.18 were not included in the diluted earnings per share calculation as they were anti-dilutive. | |||||||||||||||||||||||||||||||||||||
[10] Use of estimates: | |||||||||||||||||||||||||||||||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. With respect to income recognition under the interest method, the Company takes into consideration the relative credit quality of the underlying receivables constituting the portfolio acquired, the strategy involved to maximize the collections thereof, the time required to implement the collection strategy as well as other factors to estimate the anticipated cash flows. Actual results could differ from those estimates including management’s estimates of future cash flows and the resultant allocation of collections between principal and interest resulting therefrom. Downward revisions to estimated cash flows will result in impairments. | |||||||||||||||||||||||||||||||||||||
[11] Stock-based compensation: | |||||||||||||||||||||||||||||||||||||
The Company accounts for stock-based employee compensation under FASB ASC 718, Compensation — Stock Compensation, (“ASC 718”). ASC 718 requires that compensation expense associated with stock options and vesting of restricted stock awards be recognized in the statement of income. | |||||||||||||||||||||||||||||||||||||
[12] Impact of Recently Issued Accounting Standards: | |||||||||||||||||||||||||||||||||||||
In July 2013, the FASB issued Accounting Standards Update (“ASU”) No. 2013-11 “Income Taxes (Topic 740) Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.” There is diversity in practice in the presentation of unrecognized tax benefits in those instances. Some entities present unrecognized tax benefits as a liability unless the unrecognized tax benefit is directly associated with a tax position taken in a tax year that results in, or that resulted in, the recognition of a net operating loss or tax credit carryforward for that year and the net operating loss or tax credit carryforward has not been utilized. Other entities present unrecognized tax benefits as a reduction of a deferred tax asset for a net operating loss or tax credit carryforward in certain circumstances. The objective of the amendments in this Update is to eliminate that diversity in practice. This standard becomes effective for fiscal years and interim periods beginning after December 15, 2013. The Company is reviewing the affects of implementation of this standard. | |||||||||||||||||||||||||||||||||||||
In February 2013, the FASB issued Accounting Standards Update (“ASU”) No. 2013-02 “Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income”. The amendments require an entity to present, either in the income statement or the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income, but only if the amount reclassified is required under U.S. Generally Accepted Accounting Principles (“GAAP”) to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety, an entity is required to cross-reference to other disclosures that might provide additional details about the amounts. This ASU was effective for annual and interim periods beginning January 1, 2013. Adoption of the ASU did not have a significant effect on the Company’s consolidated financial statements (see Note B: Investments). | |||||||||||||||||||||||||||||||||||||
[13] Reclassifications: | |||||||||||||||||||||||||||||||||||||
Certain items in prior years’ financial statements have been reclassified to conform to the current year’s presentation, principally related to certain cash flow items. | |||||||||||||||||||||||||||||||||||||
Investments
Investments | 12 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Investments | ' | ||||||||||||||||
NOTE B — INVESTMENTS | |||||||||||||||||
Available-for-Sale | |||||||||||||||||
Mutual funds investments classified as available-for-sale at September 30, 2013 and 2012 consist of the following: | |||||||||||||||||
Amortized | Unrealized | Unrealized | Fair Value | ||||||||||||||
Cost | Gains | Losses | |||||||||||||||
2013 | $ | 59,151,000 | $ | 27,000 | $ | (1,143,000 | ) | $ | 58,035,000 | ||||||||
2012 | $ | 58,308,000 | $ | 404,000 | $ | — | $ | 58,712,000 | |||||||||
The available-for-sale investments did not have any contractual maturities. The Company sold four investments during the year ended September 30, 2013, with an aggregate realized loss of $252,000. Additionally, the Company received $225,000 in capital gains distributions during fiscal year 2013. The Company sold five investments in fiscal year 2012, resulting in an aggregate realized gain of approximately $339,000. The realized gains and losses are all included as part of other income. | |||||||||||||||||
At September 30, 2013, there were six investments, five of which were in an unrealized loss position. Each of the five investments had current unrealized losses existing for 12 months or less. At September 30, 2012, there were six investments, all in an unrealized gain position. All of these securities were considered to be acceptable credit risks. Based on the evaluation of the available evidence at that time, including changes in market rates and credit rating information, management believed that any decline in fair value for these instruments would be temporary. In addition, management had the ability but did not believe it would be required to sell those investment securities for a period of time sufficient to allow for an anticipated recovery or maturity. Should the impairment of any of those securities become other than temporary, the cost basis of the investment will be reduced and the resulting loss recognized in net income in the period in which the other-than-temporary impairment were identified. | |||||||||||||||||
Unrealized holding gains and losses on available-for-sale securities are included in other comprehensive income within stockholders’ equity. Realized gains (losses) on available-for-sale securities are included in other income and, when applicable, are reported as a reclassification adjustment in other comprehensive income. | |||||||||||||||||
Certificates of Deposit | |||||||||||||||||
Other investments consist of the following: | |||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
Certificates of deposits in banks | $ | — | $ | 42,682,000 | |||||||||||||
Certificates are generally nonnegotiable and nontransferable, and may incur substantial penalties for withdrawal prior to maturity, which will be within one year. |
Consumer_Receivables_Acquired_
Consumer Receivables Acquired for Liquidation | 12 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Consumer Receivables Acquired for Liquidation | ' | ||||||||||||
NOTE C — CONSUMER RECEIVABLES ACQUIRED FOR LIQUIDATION | |||||||||||||
Accounts acquired for liquidation are stated at their net estimated realizable value and consist primarily of defaulted consumer loans to individuals primarily throughout the United States. | |||||||||||||
The Company accounts for its investments in consumer receivable portfolios, using either: | |||||||||||||
• | the interest method; or | ||||||||||||
• | the cost recovery method. | ||||||||||||
The Company accounts for its investment in finance receivables using the interest method under the guidance of ASC 310. Under the guidance of ASC 310, static pools of accounts are established and these pools are aggregated based on certain common risk criteria. Each static pool is recorded at cost and is accounted for as a single unit for the recognition of income, principal payments and loss provision. | |||||||||||||
Once a static pool is established for a quarter, individual receivable accounts are not added to the pool (unless replaced by the seller) or removed from the pool (unless sold or returned to the seller). ASC 310 requires that the excess of the contractual cash flows over expected cash flows not be recognized as an adjustment of revenue or expense or on the balance sheet. ASC 310 initially freezes the internal rate of return, referred to as IRR, estimated when the accounts receivable are purchased, as the basis for subsequent impairment testing. Significant increases in actual or expected future cash flows may be recognized prospectively through an upward adjustment of the IRR over a portfolio’s remaining life. Any increase to the IRR then becomes the new benchmark for impairment testing. Rather than lowering the estimated IRR if the collection estimates are not received or projected to be received, the carrying value of a pool would be impaired, or written down to maintain the then current IRR. Under the interest method, income is recognized on the effective yield method based on the actual cash collected during a period and future estimated cash flows and timing of such collections and the portfolio’s cost. Revenue arising from collections in excess of anticipated amounts attributable to timing differences is deferred until such time as a review results in a change in the expected cash flows. The estimated future cash flows are reevaluated quarterly. | |||||||||||||
The Company uses the cost recovery method when collections on a particular pool of accounts cannot be reasonably predicted. Under the cost recovery method, no income is recognized until the cost of the portfolio has been fully recovered. A pool can become fully amortized (zero carrying balance on the balance sheet) while still generating cash collections. In this case, all cash collections are recognized as revenue when received. | |||||||||||||
The Company’s extensive liquidating experience is in the field of distressed credit card receivables, telecommunication receivables, consumer loan receivables, retail installment contracts, consumer receivables, and auto deficiency receivables. The Company uses the interest method for accounting for asset acquisitions within these classes of receivables when it believes it can reasonably estimate the timing of the cash flows. In those situations where the Company diversifies its acquisitions into other asset classes where the Company does not possess the same expertise or history, or the Company cannot reasonably estimate the timing of the cash flows, the Company utilizes the cost recovery method of accounting for those portfolios of receivables. At September 30, 2013, approximately $8.1 million of the consumer receivables acquired for liquidation are accounted for using the interest method, while approximately $49.8 million are accounted for using the cost recovery method, of which $43.4 million is concentrated in one portfolio, the Portfolio Purchase. | |||||||||||||
The Company aggregates portfolios of receivables acquired sharing specific common characteristics which were acquired within a given quarter. The Company currently considers for aggregation portfolios of accounts, purchased within the same fiscal quarter, that generally meet the following characteristics: | |||||||||||||
• | Same issuer/originator; | ||||||||||||
• | Same underlying credit quality; | ||||||||||||
• | similar geographic distribution of the accounts; | ||||||||||||
• | similar age of the receivable; and | ||||||||||||
• | Same type of asset class (credit cards, telecommunication, etc.). | ||||||||||||
The Company uses a variety of qualitative and quantitative factors to estimate collections and the timing thereof. This analysis includes the following variables: | |||||||||||||
• | the number of collection agencies previously attempting to collect the receivables in the portfolio; | ||||||||||||
• | the average balance of the receivables, as higher balances might be more difficult to collect while low balances might not be cost effective to collect; | ||||||||||||
• | the age of the receivables, as older receivables might be more difficult to collect or might be less cost effective. On the other hand, the passage of time, in certain circumstances, might result in higher collections due to changing life events of some individual customers; | ||||||||||||
• | past history of performance of similar assets; | ||||||||||||
• | time since charge-off; | ||||||||||||
• | payments made since charge-off; | ||||||||||||
• | the credit originator and its credit guidelines; | ||||||||||||
• | the Company’s ability to analyze accounts and resell accounts that meet our criteria for resale; | ||||||||||||
• | the locations of the customers, as there are better states to attempt to collect in and ultimately the Company has better predictability of the liquidations and the expected cash flows. Conversely, there are also states where the liquidation rates are not as favorable and that is factored into our cash flow analysis; | ||||||||||||
• | jobs or property of the customers found within portfolios. In the Company’s business model, this is of particular importance. Customers with jobs or property are more likely to repay their obligation and conversely, customers without jobs or property are less likely to repay their obligation; and | ||||||||||||
• | the ability to obtain timely customer statements from the original issuer. | ||||||||||||
The Company obtains and utilizes, as appropriate, input, including but not limited to monthly collection projections and liquidation rates, from third party collection agencies and attorneys, as further evidentiary matter, to assist in evaluating and developing collection strategies and in evaluating and modeling the expected cash flows for a given portfolio. | |||||||||||||
The following tables summarize the changes in the balance sheet of the investment in receivable portfolios during the following periods: | |||||||||||||
For the Year Ended September 30, 2013 | |||||||||||||
Interest | Cost | Total | |||||||||||
Method | Recovery | ||||||||||||
Portfolios | Portfolios | ||||||||||||
Balance, beginning of period | $ | 12,326,000 | $ | 74,561,000 | $ | 86,887,000 | |||||||
Acquisitions of receivable portfolios | 3,340,000 | — | 3,340,000 | ||||||||||
Net cash collections from collection of consumer receivables acquired for liquidation | (34,128,000 | ) | (17,522,000 | ) | (51,650,000 | ) | |||||||
Cash collections represented by account sales of consumer receivables acquired for liquidation | (989,000 | ) | (1,459,000 | ) | (2,448,000 | ) | |||||||
Impairments | (2,444,000 | ) | (10,148,000 | ) | (12,592,000 | ) | |||||||
Finance income recognized(1) | 29,966,000 | 4,397,000 | 34,363,000 | ||||||||||
Balance, end of period | $ | 8,071,000 | $ | 49,829,000 | $ | 57,900,000 | |||||||
Finance income as a percentage of collections | 85.3 | % | 23.2 | % | 63.5 | % | |||||||
-1 | Includes $33.2 million derived from fully amortized pools. Finance income recognized from account sales amounted to $2.0 million. | ||||||||||||
For the Year Ended September 30, 2012 | |||||||||||||
Interest | Cost | Total | |||||||||||
Method | Recovery | ||||||||||||
Portfolios | Portfolios | ||||||||||||
Balance, beginning of period | $ | 31,193,000 | $ | 84,002,000 | $ | 115,195,000 | |||||||
Acquisitions of receivable portfolios | 1,278,000 | 1,217,000 | 2,495,000 | ||||||||||
Net cash collections from collection of consumer receivables acquired for liquidation | (49,723,000 | ) | (20,179,000 | ) | (69,902,000 | ) | |||||||
Cash collections represented by account sales of consumer receivables acquired for liquidation | (117,000 | ) | — | (117,000 | ) | ||||||||
Transfer to cost recovery | (6,484,000 | ) | 6,484,000 | — | |||||||||
Impairments | (1,383,000 | ) | — | (1,383,000 | ) | ||||||||
Finance income recognized(1) | 37,562,000 | 3,037,000 | 40,599,000 | ||||||||||
Balance, end of period | $ | 12,326,000 | $ | 74,561,000 | $ | 86,887,000 | |||||||
Revenue as a percentage of collections | 75.4 | % | 15.1 | % | 58 | % | |||||||
-1 | Includes $36.4 million derived from fully amortized pools. Finance income recognized from account sales amounted to $0.1 million. | ||||||||||||
As of September 30, 2013, the Company had $57,900,000 in consumer receivables acquired for liquidation, of which $8,071,000 are accounted for on the interest method. Based upon current projections, net cash collections, applied to principal for interest method portfolios are estimated as follows for the twelve months in the periods ending: | |||||||||||||
September 30, 2014 | $ | 4,291,000 | |||||||||||
September 30, 2015 | 1,051,000 | ||||||||||||
September 30, 2016 | 813,000 | ||||||||||||
September 30, 2017 | 636,000 | ||||||||||||
September 30, 2018 | 536,000 | ||||||||||||
September 30, 2019 | 463,000 | ||||||||||||
September 30, 2020 | 281,000 | ||||||||||||
Total | $ | 8,071,000 | |||||||||||
Accretable yield represents the amount of income the Company can expect to generate over the remaining amortizable life of its existing portfolios based on estimated future net cash flows as of September 30, 2013. The Company adjusts the accretable yield upward when it believes, based on available evidence, that portfolio collections will exceed amounts previously estimated. There were no accretable yield adjustments in fiscal years 2013 and 2012. Projected accretable yield for the fiscal years ended September 30, 2013 and 2012 are as follows: | |||||||||||||
Year Ended | |||||||||||||
September 30, | |||||||||||||
2013 | |||||||||||||
Balance at beginning of period, October 1, 2012 | $ | 2,086,000 | |||||||||||
Income recognized on finance receivables, net | (29,966,000 | ) | |||||||||||
Additions representing expected revenue from purchases | 983,000 | ||||||||||||
Reclassifications from non-accretable difference(1) | 28,013,000 | ||||||||||||
Balance at end of period, September 30, 2013 | $ | 1,116,000 | |||||||||||
-1 | Includes portfolios that became zero based portfolios during the period, removal of zero basis portfolios from the accretable yield calculation and, other immaterial impairments and accretions based on the certain collection curves being extended. | ||||||||||||
Year Ended | |||||||||||||
September 30, | |||||||||||||
2012 | |||||||||||||
Balance at beginning of period, October 1, 2011 | $ | 7,473,000 | |||||||||||
Income recognized on finance receivables, net | (37,561,000 | ) | |||||||||||
Additions representing expected revenue from purchases | 361,000 | ||||||||||||
Transfers to Cost Recovery | (1,840,000 | ) | |||||||||||
Reclassifications from non-accretable difference(1) | 33,653,000 | ||||||||||||
Balance at end of period, September 30, 2012 | $ | 2,086,000 | |||||||||||
During the year ended September 30, 2013, the Company purchased $53.5 million in face value receivables at a cost of $3.3 million. During the year ended September 30, 2012, the Company purchased $6.0 million in face value receivables at cost of $2.5 million. | |||||||||||||
The following table summarizes collections received by the Company’s third-party collection agencies and attorneys, less commissions and direct costs for the years ended September 30, 2013, 2012 and 2011, respectively. | |||||||||||||
For the Years Ended, September 30, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Gross collections(1) | $ | 85,512,000 | $ | 108,487,000 | $ | 129,688,000 | |||||||
Less: commissions and fees(2) | 31,414,000 | 38,468,000 | 48,483,000 | ||||||||||
Net collections | $ | 54,098,000 | $ | 70,019,000 | $ | 81,205,000 | |||||||
-1 | Gross collections include collections from third-party collection agencies and attorneys, collections from in-house efforts and collections represented by account sales. | ||||||||||||
-2 | Commissions and fees are the contractual commissions earned by third party collection agencies and attorneys, and direct costs associated with the collection effort, generally court costs. Includes a 3% fee charged by a servicer on gross collections in connection with the Portfolio Purchase. Such arrangement was consummated in December 2007. The fee is charged for asset location, skip tracing and ultimately suing debtors in connection with this portfolio purchase. | ||||||||||||
Finance income recognized on net collections represented by account sales was $2.0 million, $0.1 million and $0.2 million for the fiscal years ended September 30, 2013, 2012 and 2011, respectively. |
Furniture_and_Equipment
Furniture and Equipment | 12 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Furniture and Equipment | ' | ||||||||
NOTE D — FURNITURE AND EQUIPMENT | |||||||||
Furniture and equipment as of September 30, 2013 and 2012 consist of the following: | |||||||||
2013 | 2012 | ||||||||
Furniture | $ | 310,000 | $ | 310,000 | |||||
Equipment | 3,622,000 | 3,470,000 | |||||||
Software | 1,211,000 | 638,000 | |||||||
Leasehold improvements | 99,000 | 99,000 | |||||||
5,242,000 | 4,517,000 | ||||||||
Less accumulated depreciation | 4,136,000 | 3,696,000 | |||||||
$ | 1,106,000 | $ | 821,000 | ||||||
Depreciation expense for the years ended September 30, 2013, 2012 and 2011 aggregated $440,000, $380,000 and $250,000, respectively. |
Other_Investments
Other Investments | 12 Months Ended |
Sep. 30, 2013 | |
Other Investments | ' |
NOTE E — OTHER INVESTMENTS | |
Personal Injury Claims | |
Pegasus purchases interests in claims from claimants who are a party to personal injury litigation. Pegasus advances, to each claimant, funds, on a non-recourse basis at an agreed upon interest rate, in anticipation of a future settlement. The interest in each claim purchased by Pegasus consists of the right to receive, from such claimant, part of the proceeds or recoveries which such claimant receives by reason of a settlement, judgment or award with respect to such claimant’s claims. The Company, through Pegasus, earned $6.4 million in interest and fees during fiscal year 2013 compared to $1.6 million in interest and fees during fiscal year 2012. These amounts are recorded as part of other income. The Company had a net invested balance in personal injury claims of $35.8 million and $18.6 million on September 30, 2013 and 2012, respectively. The collections yielded net income attributable to non-controlling interest of $406,000 for the year-ended September 30, 2013 compared to $31,000 for the year ended September 30, 2012. Pegasus records reserves for bad debts, which, at September 30, 2013, amounted to $2.2 million. | |
Matrimonial Claims | |
On May 18, 2012, the Company formed BP Case Management, LLC (“BPCM”), a joint venture with California-based Balance Point Divorce Funding, LLC (“BP Divorce Funding”). BPCM provides non-recourse funding to a spouse in a matrimonial action. The Company provides a $1.0 million revolving line of credit to partially fund BPCM’s operations, with such loan bearing interest at the prevailing prime rate, with an initial term of twenty-four months. The revolving line of credit is collateralized by BP Divorce Funding’s profits share in BPCM and other assets. As of September 30, 2013, the Company’s investment in cases through BPCM was approximately $1.6 million. The Company recognized $34,000 in revenue during fiscal year 2013 compared to $165,000 during fiscal year 2012. |
Non_Recourse_Debt
Non Recourse Debt | 12 Months Ended |
Sep. 30, 2013 | |
Non Recourse Debt | ' |
NOTE F — NON-RECOURSE DEBT | |
Receivables Financing Agreement | |
In March 2007, Palisades XVI borrowed approximately $227 million under the Receivables Financing Agreement, as amended in July 2007, December 2007, May 2008 and February 2009, from BMO, in order to finance the Portfolio Purchase. The Portfolio Purchase had a purchase price of $300 million (plus 20% of net payments after Palisades XVI recovers 150% of its purchase price plus cost of funds, which recovery has not yet occurred). Prior to the modifications, discussed below, the debt was full recourse only to Palisades XVI and bore an interest rate of approximately 170 basis points over LIBOR. The original term of the agreement was three years. This term was extended by each of the Second, Third, Fourth and Fifth Amendments to the Receivables Financing Agreement as discussed below. The Receivables Financing Agreement contained cross default provisions related to the IDB Credit Facility. This cross default could only occur in the event of a non-payment in excess of $2.5 million of the IDB Credit Facility. Proceeds received as a result of the net collections from the Portfolio Purchase are applied to interest and principal of the underlying loan. The Portfolio Purchase is serviced by Palisades Collection LLC, a wholly owned subsidiary of the Company, which has engaged unaffiliated subservicers for a majority of the Portfolio Purchase. | |
Since the inception of the Receivables Financing Agreement amendments have been signed to revise various terms of the Receivables Financing Agreement. Currently, the Settlement Agreement and Omnibus Amendment (“Settlement Agreement”) is in effect on August 7, 2013, Palisades XVI, a 100% owned bankruptcy remote subsidiary, entered into a Settlement Agreement with BMO as an amendment to the Receivables Financing Agreement. In consideration for a $15 million prepayment funded by the Company, BMO has agreed to significantly reduce minimum monthly payment requirements and the interest rate. If and when BMO receives the next $15 million of collections from the Portfolio Purchase, less certain credits for payments made prior to the consummation of the Settlement Agreement, the Company is entitled to recover from future net collections the $15 million prepayment that it funded. Thereafter, BMO will have the right to receive 30% of future net collections. No gain or loss was recognized with regard to the Settlement Agreement. | |
The aggregate minimum repayment obligations required under the Settlement Amendment, including interest and principal, for the fiscal years ended September 30, 2014, 2015 and 2016 is $4.6 million, $3.6 million and, $1.5 million, respectively. All cash collections received on the Portfolio Purchase are used to repay the non-recourse debt and the interest. | |
On September 30, 2013 and 2012, the outstanding balance on this loan was approximately $35.8 million and $61.5 million, respectively. The applicable interest rate at September 30, 2013 and 2012 was 0.43% and 3.73%, respectively. The average interest rate of the Receivables Financing Agreement was 3.05% and 3.76% for the years ended September 30, 2013 and 2012, respectively. | |
The Company’s average debt obligation for the years ended September 30, 2013 and 2012 was approximately $54.1 million and $66.8 million, respectively. | |
Other significant amendments to the Receivables Financing Agreement are as follows: | |
Second Amendment — Receivables Financing Agreement, dated December 27, 2007 revised the amortization schedule of the loan from 25 months to approximately 31 months. BMO charged Palisades XVI a fee of $475,000 which was paid on January 10, 2008. The fee was capitalized and is being amortized over the remaining life of the Receivables Financing Agreement. | |
Third Amendment — Receivables Financing Agreement, dated May 19, 2008 extended the payments of the loan through December 2010. The lender also increased the interest rate from 170 basis points over LIBOR to approximately 320 basis points over LIBOR, subject to automatic reduction in the future if additional capital contributions are made by the parent of Palisades XVI. | |
Fourth Amendment — Receivables Financing Agreement, dated February 20, 2009, among other things, (i) lowered the collection rate minimum to $1 million per month (plus interest and fees) as an average for each period of three consecutive months, (ii) provided for an automatic extension of the maturity date from April 30, 2011 to April 30, 2012 should the outstanding balance be reduced to $25 million or less by April 30, 2011 and (iii) permanently waived the previous termination events. The interest rate remains unchanged at approximately 320 basis points over LIBOR, subject to automatic reduction in the future should certain collection milestones be attained. | |
As additional credit support for repayment by Palisades XVI of its obligations under the Receivables Financing Agreement and as an inducement for BMO to enter into the Fourth Amendment, the Company provided BMO a limited recourse, subordinated guaranty, secured by the assets of the Company, in an amount not to exceed $8.0 million plus reasonable costs of enforcement and collection. Under the terms of the guaranty, BMO could not exercise any recourse against the Company until the earlier of (i) five years from the date of the Fourth Amendment and (ii) the termination of the Company’s existing senior lending facility or any successor senior facility. | |
Fifth Amendment — Receivables Financing Agreement, dated October 14, 2010, (i) extended the expiration date of the Receivables Financing Agreement to April 30, 2014, (ii) reduced the minimum monthly total payment to $750,000, (iii) accelerated the Company’s guarantee credit enhancement of $8,700,000, which was paid upon execution of the Fifth Amendment, (iv) eliminated the Company’s limited guarantee of repayment of the loans outstanding by Palisades XVI, and (v) revised the definition of “Borrowing Base Deficit”, as defined in the Receivables Financing Agreement, to mean the excess, if any, of 105% of the loans outstanding over the borrowing base. | |
In connection with the Fifth Amendment, on October 26, 2010, the Company entered into the Omnibus Termination Agreement (the “Termination Agreement”). The limited recourse subordinated guaranty set forth in the Fourth Amendment was eliminated upon signing the Termination Agreement. | |
Senior Secured Discretionary Credit Facility | |
On December 30, 2011, the Company and certain of its subsidiaries obtained a $20,000,000 Senior Discretionary Credit Facility (the “Credit Facility”) from Bank Leumi pursuant to a Loan Agreement (the “Loan Agreement”) between certain of the Company’s subsidiaries and Bank Leumi. Under the Loan Agreement, certain subsidiaries issued a Revolving Note (the “Note”) to Bank Leumi in the principal amount of up to $20 million. Any outstanding balance under the Credit Facility would accrue interest at an annual rate equal to the Prime Rate plus 50 basis points. The Company and certain subsidiaries had agreed to serve as guarantors of the obligations to the borrower subsidiaries and entered into Guarantee Agreements. Pursuant to a series of Security Agreements and Pledge Agreements, the Credit Facility was collateralized by the first priority perfected liens on substantially all of the Company’s assets and the assets of its subsidiaries, except those of Palisades XVI. The Credit Facility was subject to an administrative fee of $75,000 upon the first drawdown of the Credit Facility. The Loan Agreement contained standard and customary representations and warranties, covenants, events of default and other provisions, including financial covenants that required the Company to: (i) maintain a minimum net worth of $150 million; and (ii) incur no net loss in any fiscal year. The term of the Credit Facility expired February 23, 2013. The Company never utilized this facility. |
Other_Liabilities
Other Liabilities | 12 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Other Liabilities | ' | ||||||||
NOTE G — OTHER LIABILITIES | |||||||||
Other liabilities as of September 30, 2013 and 2012 are as follows: | |||||||||
2013 | 2012 | ||||||||
Accounts payable and accrued expenses | $ | 2,274,000 | $ | 2,091,000 | |||||
Accrued interest payable | 4,000 | 192,000 | |||||||
Other | 208,000 | 637,000 | |||||||
Total other liabilities | $ | 2,486,000 | $ | 2,920,000 | |||||
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Income Taxes | ' | ||||||||||||
NOTE H — INCOME TAXES | |||||||||||||
The components of the provision for income taxes for the years ended September 30, 2013, 2012 and 2011 are as follows: | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Current: | |||||||||||||
Federal | $ | 561,000 | $ | 3,437,000 | $ | 2,418,000 | |||||||
State | 383,000 | — | — | ||||||||||
Federal true up | 42,000 | 73,000 | |||||||||||
944,000 | 3,479,000 | 2,491,000 | |||||||||||
Deferred: | |||||||||||||
Federal | 212,000 | 1,813,000 | 2,963,000 | ||||||||||
State | 8,000 | 1,580,000 | 1,648,000 | ||||||||||
220,000 | 3,393,000 | 4,611,000 | |||||||||||
Provision for income taxes | $ | 1,164,000 | $ | 6,872,000 | $ | 7,102,000 | |||||||
The difference between the statutory federal income tax rate on the Company’s pre-tax income and the Company’s effective income tax rate is summarized for the years ended September 30, 2013, 2012 and 2011 as follows: | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Statutory federal income tax rate | 34 | % | 34 | % | 34 | % | |||||||
State income tax, net of federal benefit | 6.1 | 6.1 | 6.3 | ||||||||||
Deferred tax valuation allowance | — | — | 1.8 | ||||||||||
Permanent difference in municipal interest | (7.5 | ) | — | — | |||||||||
Permanent difference other | (0.7 | ) | — | — | |||||||||
Federal prior year provision to tax return difference | (2.1 | ) | 0.2 | — | |||||||||
Other | (2.8 | ) | 0.3 | (1.8 | ) | ||||||||
Effective income tax rate | 27 | % | 40.6 | % | 40.3 | % | |||||||
The Company recognized a net deferred tax asset of $10,443,000 and $10,410,000 as of September 30, 2013 and 2012, respectively. The components are as follows: | |||||||||||||
September 30, | September 30, | ||||||||||||
2013 | 2012 | ||||||||||||
Deferred and accrued revenue | $ | (414,000 | ) | $ | (116,000 | ) | |||||||
Impairments/bad debt reserves | 5,241,000 | 5,449,000 | |||||||||||
State tax net operating loss carryforward | 9,524,000 | 9,671,000 | |||||||||||
Stock based compensation | 2,133,000 | 1,737,000 | |||||||||||
Depreciation, amortization and other | (312,000 | ) | (571,000 | ) | |||||||||
Deferred income taxes | 16,172,000 | 16,170,000 | |||||||||||
Deferred tax valuation allowance | (5,729,000 | ) | (5,760,000 | ) | |||||||||
Deferred income taxes | $ | 10,443,000 | $ | 10,410,000 | |||||||||
The Company files consolidated Federal and state income tax returns. Substantially all of the Company’s subsidiaries are single member limited liability companies and, therefore, do not file separate tax returns. Majority and minority owned subsidiaries file separate partnership tax returns. The expiration date for state net operating loss carryforwards (from September 30, 2009) is September 30, 2029. There are no federal net operating loss carryforwards. | |||||||||||||
The Company accounts for income taxes using the asset and liability method which requires the recognition of deferred tax assets and, if applicable, deferred tax liabilities, for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and, if applicable, liabilities. Additionally, the Company would adjust deferred taxes to reflect estimated tax rate changes, if applicable. The Company conducts periodic evaluations to determine whether it is more likely than not that some or all of its deferred tax assets will not be realized. Among the factors considered in this evaluation are estimates of future earnings, the future reversal of temporary differences and the impact of tax planning strategies that we can implement if warranted. The Company is required to provide a valuation allowance for any portion of our deferred tax assets that, more likely than not, will not be realized at September 30, 2013. Based on this evaluation, the Company has a deferred tax asset valuation allowance of approximately $5.7 million as of September 30, 2013. The deferred tax valuation allowance decreased by $31,000 from 2012. Although the carryforward period for state income tax purposes is up to twenty years, given the economic conditions, such economic environment could limit growth over a reasonable time period to realize the deferred tax asset. The Company determined the time period allowance for carryforward is outside a reasonable period to forecast full realization of the deferred tax asset, therefore recognized the deferred tax asset valuation allowance. The Company continually monitors forecast information to ensure the valuation allowance is at the appropriate value. As required by FASB ASC 740, Income Taxes, the Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. Interest and penalties arising from uncertain tax positions will be presented as a component of income taxes. No amounts of interest or penalties were recognized in the Company’s consolidated financial statements for 2013 and 2012. | |||||||||||||
The corporate federal income tax returns of the Company for 2009, 2010, 2011 and 2012 are subject to examination by the Internal Revenue Service (“IRS”) generally for three years after they are filed. The state income tax returns and other state filings of the Company are subject to examination by the state taxing authorities, for various periods, generally up to four years after they are filed. | |||||||||||||
In April 2010, the Company received notification from the IRS that the Company’s 2008, 2009 and 2010 federal income tax returns would be audited. This audit is currently in progress. Although the Company believes that its tax estimates and positions are reasonable, the Company can provide no assurance that any final determination in an audit will be materially different than the treatment reflected in its historical income tax provisions and accruals. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||
Sep. 30, 2013 | |||||
Commitments and Contingencies | ' | ||||
NOTE I — COMMITMENTS AND CONTINGENCIES | |||||
Employment Agreements | |||||
In January 2007, the Company entered into an employment agreement (the “Employment Agreement”) with Gary Stern, its Chairman, President and Chief Executive Officer, which expired on December 31, 2009. Mr. Stern is continuing in his current roles at the discretion of the Board of Directors until a new agreement is signed. | |||||
Leases | |||||
The Company leases its facilities in (i) Englewood Cliffs, New Jersey, (ii) Houston, Texas and (iii) New York, New York. The leases are operating leases, and the Company incurred related rent expense in the amounts of $554,000, $413,000 and $305,000 during the years ended September 30, 2013, 2012 and 2011, respectively. The future minimum lease payments are as follows: | |||||
Year | |||||
Ending | |||||
September 30, | |||||
2014 | $ | 540,000 | |||
2015 | 505,000 | ||||
2016 | 295,000 | ||||
2017 | 248,000 | ||||
$ | 1,588,000 | ||||
Contingencies | |||||
In the ordinary course of its business, the Company is involved in numerous legal proceedings. The Company regularly initiates collection lawsuits, using its network of third party law firms, against consumers. Also, consumers occasionally initiate litigation against the Company, in which they allege that the Company has violated a federal or state law in the process of collecting their account. The Company does not believe that these matters are material to its business and financial condition. The Company is not involved in any material litigation in which it was a defendant. | |||||
During fiscal year 2013, the Company received subpoenas from two jurisdictions seeking information and/or documentation regarding its business practices. One jurisdiction closed its investigation during fiscal year 2013 without taking any action against the Company. The Company is fully cooperating with the issuing agency in the other jurisdiction. The Company has not made any provision with respect to these matters in the financial statements because the Company does not believe that they are material to its business and financial condition. |
Concentrations
Concentrations | 12 Months Ended |
Sep. 30, 2013 | |
Concentrations | ' |
NOTE J — CONCENTRATIONS | |
At September 30, 2013, approximately 28% of the Company’s portfolio face value was serviced by seven collection organizations. The Company has servicing agreements in place with these seven collection organizations as well as all of the Company’s other third party collection agencies and attorneys that cover standard contingency fees and servicing of the accounts. |
Stock_Options_Plans
Stock Options Plans | 12 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||
Stock Options Plans | ' | ||||||||||||||||||||||||
NOTE K — STOCK OPTION PLANS | |||||||||||||||||||||||||
2012 Stock Option and Performance Award Plan | |||||||||||||||||||||||||
On February 7, 2012, the Board of Directors adopted the Company’s 2012 Stock Option and Performance Award Plan (the “2012 Plan”), which was approved by the stockholders of the Company on March 21, 2012. The 2012 Plan replaces the Equity Compensation Plan (as defined below). | |||||||||||||||||||||||||
The 2012 Plan provides the Company with flexibility with respect to equity awards by also providing for grants of stock awards (i.e., restricted or unrestricted), stock purchase rights and stock appreciation rights, in addition to the granting of stock options. | |||||||||||||||||||||||||
The Company authorized 2,000,000 shares of Common Stock for issuance under the 2012 Plan. In December 2012, the Company granted options to purchase shares of the Company and an award of restricted stock totaling 262,321 shares. Additionally, the Company granted 50,000 shares of the Company to non-executive employees in June 2013, leaving 1,687,679 shares available as of September 30, 2013. As of September 30, 2013, approximately 48 of the Company’s employees were eligible to participate in the 2012 Plan. | |||||||||||||||||||||||||
Equity Compensation Plan | |||||||||||||||||||||||||
On December 1, 2005, the board of directors adopted the Company’s Equity Compensation Plan (the “Equity Compensation Plan”), which was approved by the stockholders of the Company on March 1, 2006. The Equity Compensation Plan was adopted to supplement the Company’s 2002 Stock Option Plan (as defined below). | |||||||||||||||||||||||||
In addition to permitting the grant of stock options as are permitted under the 2002 Stock Option Plan, the Equity Compensation Plan allows the Company flexibility with respect to equity awards by also providing for grants of stock awards (i.e., restricted or unrestricted), stock purchase rights and stock appreciation rights. | |||||||||||||||||||||||||
The Company authorized 1,000,000 shares of Common Stock for issuance under the Equity Compensation Plan. As of March 21, 2012, no more awards could be issued under this plan. | |||||||||||||||||||||||||
2002 Stock Option Plan | |||||||||||||||||||||||||
On March 5, 2002, the board of directors adopted the Company’s 2002 Stock Option Plan (the “2002 Plan”), which was approved by the Company’s stockholders on May 1, 2002. The 2002 Plan was adopted in order to attract and retain qualified directors, officers and employees of, and consultants to, the Company. | |||||||||||||||||||||||||
The 2002 Plan authorizes the granting of incentive stock options (as defined in Section 422 of the Internal Revenue Code of 1986, as amended (“the “Code”)) and non-qualified stock options to eligible employees of the Company, including officers and directors of the Company (whether or not employees) and consultants of the Company. | |||||||||||||||||||||||||
The Company authorized 1,000,000 shares of Common Stock for issuance under the 2002 Plan. As of March 5, 2012, no more awards could be issued under this plan. | |||||||||||||||||||||||||
1995 Stock Option Plan | |||||||||||||||||||||||||
In 1995, the Board of Directors adopted the Company’s 1995 Stock Option Plan (the “1995 Plan”), which expired on September 14, 2005. The plan was adopted in order to attract and retain qualified directors, officers and employees of, and consultants to, the Company. | |||||||||||||||||||||||||
The 1995 Plan authorizes the granting of incentive stock options (as defined in the Code) and non-qualified stock options to eligible employees of the Company, including officers and directors of the Company (whether or not employees) and consultants of the Company. | |||||||||||||||||||||||||
The Company authorized 1,840,000 shares of Common Stock for issuance under the 1995 Plan. As of September 14, 2005, no more awards could be issued under this plan. All outstanding options under this plan expired in November 2013. | |||||||||||||||||||||||||
Stock Based Compensation | |||||||||||||||||||||||||
The Company accounts for stock-based employee compensation under ASC 718, Compensation — Stock Compensation (“ASC 718”). ASC 718 requires that compensation expense associated with stock options and other stock based awards be recognized in the income statement rather than a disclosure in the notes to the Company’s consolidated financial statements. | |||||||||||||||||||||||||
In June 2013, through a previous action of the Compensation Committee of the board of directors of the Company (the “Compensation Committee”) authorizing the Chief Executive Officer of the Company the discretion to grant stock option awards to non-officer employees, the Chief Executive Officer awarded 50,000 stock options to non-officer employees. The exercise price of these options, issued on June 13, 2013, was at the market price on that date. The options vest in three equal installments, accounted for as one graded vesting award, starting on the first anniversary of the grant. The assumptions used in the option pricing model were as follows: | |||||||||||||||||||||||||
Risk-free interest rate | 0.1 | % | |||||||||||||||||||||||
Expected term (years) | 6.2 | ||||||||||||||||||||||||
Expected volatility | 99.7 | % | |||||||||||||||||||||||
Dividend yield | 0.92 | % | |||||||||||||||||||||||
In December 2012, the Compensation Committee granted 160,000 stock options, of which 65,000 options were awarded to three officers of the Company and 20,000 options were awarded to an employee of the Company. The remaining 75,000 shares were issued to six non-employee directors of the Company. The exercise price of these options, issued on December 18, 2012, was at the market price on that date. The options vest in three equal installments, accounted for as one graded vesting award, starting on the first anniversary of the grant. The assumptions used in the option pricing model were as follows: | |||||||||||||||||||||||||
Risk-free interest rate | 0.16 | % | |||||||||||||||||||||||
Expected term (years) | 6 | ||||||||||||||||||||||||
Expected volatility | 101 | % | |||||||||||||||||||||||
Dividend yield | 1.67 | % | |||||||||||||||||||||||
In addition, the Company granted 102,321 restricted shares to the Chief Executive Officer of the Company. The shares vest in three equal installments, starting on the first anniversary of the grant. | |||||||||||||||||||||||||
In December 2011, the Compensation Committee granted 360,000 stock options, of which 150,000 options were awarded to the Chief Executive Officer, and 30,000 stock options were rewarded to both the Chief Financial Officer and the Senior Vice President. 60,000 shares were issued to five non-employee directors of the Company. The exercise price of these options, issued December 13, 2011, was at the market price on that date. The weighted average assumptions used in the option pricing model were as follows: | |||||||||||||||||||||||||
Risk-free interest rate | 0.08 | % | |||||||||||||||||||||||
Expected term (years) | 10 | ||||||||||||||||||||||||
Expected volatility | 103.9 | % | |||||||||||||||||||||||
Dividend yield | 1.03 | % | |||||||||||||||||||||||
On December 22, 2011, the remaining 90,000 stock options were granted to selected non-officer employees of the Company. The exercise price of all stock options was at the market price on the date of the grant. The weighted average assumptions used in the option pricing model were as follows: | |||||||||||||||||||||||||
Risk-free interest rate | 0.08 | % | |||||||||||||||||||||||
Expected term (years) | 10 | ||||||||||||||||||||||||
Expected volatility | 95.7 | % | |||||||||||||||||||||||
Dividend yield | 1.03 | % | |||||||||||||||||||||||
In June 2011, the Compensation Committee granted 50,000 stock options to a consultant. The exercise price of these options was above the market price on the date of the grant. The weighted average assumptions used in the option pricing model were as follows: | |||||||||||||||||||||||||
Risk-free interest rate | 0.09 | % | |||||||||||||||||||||||
Expected term (years) | 10 | ||||||||||||||||||||||||
Expected volatility | 105.4 | % | |||||||||||||||||||||||
Dividend yield | 0.95 | % | |||||||||||||||||||||||
In March 2011, the Compensation Committee granted 10,000 stock options to an employee. The exercise price of these options was at the market price on the date of the grant. The weighted average assumptions used in the option pricing model were as follows: | |||||||||||||||||||||||||
Risk-free interest rate | 0.1 | % | |||||||||||||||||||||||
Expected term (years) | 10 | ||||||||||||||||||||||||
Expected volatility | 106.2 | % | |||||||||||||||||||||||
Dividend yield | 0.94 | % | |||||||||||||||||||||||
In December 2010, the Compensation Committee granted 324,800 stock options, of which 30,000 options were issued to each non-employee independent director for a total of 150,000 stock options. 60,000 stock options were awarded to the Chief Executive Officer and 30,000 stock options were awarded to the Chief Financial Officer and the Senior Vice President. The remaining 54,800 stock options were granted to full time employees of the Company, who had been employed at the Company for at least six months prior to the date of grant. The grants to employees excluded officers of the Company. The exercise price of these options was at the market price on the date of the grant. The exercise price of all stock options was at the market price on the date of the grant. The weighted average assumptions used in the option pricing model were as follows: | |||||||||||||||||||||||||
Risk-free interest rate | 0.17 | % | |||||||||||||||||||||||
Expected term (years) | 10 | ||||||||||||||||||||||||
Expected volatility | 106.9 | % | |||||||||||||||||||||||
Dividend yield | 0.98 | % | |||||||||||||||||||||||
The following table summarizes stock option transactions under the plans: | |||||||||||||||||||||||||
Year Ended September 30, | |||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||
Shares | Weighted | Shares | Weighted | Shares | Weighted | ||||||||||||||||||||
Average | Average | Average | |||||||||||||||||||||||
Exercise | Exercise | Exercise | |||||||||||||||||||||||
Price | Price | Price | |||||||||||||||||||||||
Outstanding options at the beginning of year | 1,499,471 | $ | 11.27 | 1,294,271 | $ | 11.41 | 922,039 | $ | 12.7 | ||||||||||||||||
Options granted | 210,000 | 9.36 | 360,000 | 7.87 | 384,800 | 7.53 | |||||||||||||||||||
Options cancelled | (50,000 | ) | 7.77 | (15,300 | ) | 6 | (6,300 | ) | 6.07 | ||||||||||||||||
Options exercised | (36,700 | ) | 3.41 | (139,500 | ) | 4.36 | (6,268 | ) | 3.35 | ||||||||||||||||
Outstanding options at the end of year | 1,622,771 | $ | 11.31 | 1,499,471 | $ | 11.27 | 1,294,271 | $ | 11.41 | ||||||||||||||||
Exercisable options at the end of year | 1,108,271 | $ | 12.62 | 1,000,904 | $ | 12.93 | 992,607 | $ | 12.41 | ||||||||||||||||
The Company recognized $1,683,000 of compensation expense related to stock options, for fiscal year 2013, including approximately $161,000 for non-vested options cancelled during the third quarter. The Company recognized $1,538,000 and $1,906,000 of compensation expense related to stock options in the fiscal years ended September 30, 2012 and 2011, respectively. As of September 30, 2013, there was $2,003,000 of unrecognized compensation cost related to unvested stock options. The weighted average remaining period over which such costs are expected to be recognized is 1.8 years. | |||||||||||||||||||||||||
The intrinsic value of the outstanding and exercisable options as of September 30, 2013 was approximately $974,000 and $654,000, respectively. The intrinsic value of the options exercised during fiscal years 2013 and 2012 was approximately $213,000 and $691,000, respectively. The fair value of the options exercised during the fiscal years ended September 30, 2013 and 2012 was approximately $339,000 and $1,299,000, respectively. The weighted average remaining contractual life of exercisable options is 3.9 years. The fair value of the stock options that vested during the 2013 fiscal year was approximately $1,289,000. The fair value of the awards granted during the fiscal year ended September 30, 2013 was $1,702,000. During 2013, proceeds from the exercise of stock options amounted to $125,000. There is no tax effect associated with these exercises. | |||||||||||||||||||||||||
The following table summarizes information about the plans’ outstanding options as of September 30, 2013: | |||||||||||||||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||||||||||||||
Range of | Number | Weighted | Weighted | Number | Weighted | ||||||||||||||||||||
Exercise Price | Outstanding | Average | Average | Exercisable | Average | ||||||||||||||||||||
Remaining | Exercise | Exercise | |||||||||||||||||||||||
Contractual | Price | Price | |||||||||||||||||||||||
Life (In Years) | |||||||||||||||||||||||||
$ 2.8751 - $ 5.7500 | 18,700 | 5.6 | $ | 2.95 | 18,700 | $ | 2.95 | ||||||||||||||||||
$ 5.7501 - $ 8.6250 | 790,800 | 7.4 | 7.81 | 486,300 | 7.77 | ||||||||||||||||||||
$ 8.6251 - $14.3750 | 260,000 | 9 | 9.77 | 50,000 | 11.5 | ||||||||||||||||||||
$14.3751 - $17.2500 | 198,611 | 0.1 | 14.88 | 198,611 | 14.88 | ||||||||||||||||||||
$17.2501 - $20.1250 | 339,660 | 1.1 | 18.23 | 339,660 | 18.23 | ||||||||||||||||||||
$25.8751 - $28.7500 | 15,000 | 3.2 | 28.75 | 15,000 | 28.75 | ||||||||||||||||||||
1,622,771 | 5.4 | $ | 11.31 | 1,108,271 | $ | 12.62 | |||||||||||||||||||
The following table summarizes information about restricted stock transactions: | |||||||||||||||||||||||||
Year Ended | Weighted | Year Ended | Weighted | ||||||||||||||||||||||
September 30, 2013 | Average | September 30, 2012 | Average | ||||||||||||||||||||||
Shares | Grant Date | Shares | Grant Date | ||||||||||||||||||||||
Fair Value | Fair Value | ||||||||||||||||||||||||
Unvested at the beginning of period | 10,922 | $ | 7.63 | 21,843 | $ | 7.63 | |||||||||||||||||||
Awards granted | 102,321 | 9.57 | — | 0 | |||||||||||||||||||||
Vested | (10,922 | ) | 7.63 | (10,921 | ) | 7.63 | |||||||||||||||||||
Forfeited | — | 0 | — | 0 | |||||||||||||||||||||
Unvested at the end of period | 102,321 | $ | 9.57 | 10,922 | $ | 7.63 | |||||||||||||||||||
The Company recognized $273,000, $83,000 and $149,000 of compensation expense during the fiscal years ended September 30, 2013, 2012 and 2011, respectively, for restricted stock. As of September 30, 2013, there was a total of $723,000 of unrecognized compensation cost related to unvested restricted stock. The weighted average remaining period over which such costs are recognized is 2.2 years. The fair value of the awards granted during the fiscal year ended September 30, 2013 was $979,000. The fair value of the awards vested during the fiscal year ended September 30, 2013 was $83,000. | |||||||||||||||||||||||||
The Company recognized an aggregate total of $1,956,000, $1,623,000 and $2,055,000 in compensation expense for the fiscal years ended September 30, 2013, 2012 and 2011, respectively, for the stock options and restricted stock grants. As of September 30, 2013, there was a total of $2,726,000 of unrecognized compensation cost related to unvested stock options and restricted stock grants. The method used to calculate stock based compensation is the straight line pro-rated method. |
Stockholders_Equity
Stockholders Equity | 12 Months Ended |
Sep. 30, 2013 | |
Stockholders Equity | ' |
NOTE L — STOCKHOLDERS’ EQUITY | |
In December 2012, the Board of Directors of the Company approved the payment of a special accelerated annual dividend of $0.08 per share to stockholders of record on December 24, 2012. The aggregate dividend of $1,030,000 was paid on December 28, 2012. No additional dividends were declared during fiscal year 2013. | |
During the year ended September 30, 2012, the Company declared quarterly cash dividends aggregating $1,111,000, which includes $0.02 per share, per quarter, of which $260,000 was accrued as of September 30, 2012 and paid November 1, 2012. | |
The Company expects to pay a regular cash dividend in future quarters, but the amount has not yet been determined. This will be at the discretion of the board of directors and will depend upon the Company’s financial condition, operating results, capital requirements and any other factors the board of directors deems relevant. In addition, agreements with the Company’s lenders may, from time to time, restrict the ability to pay dividends. As of September 30, 2012, there were no such restrictions. | |
On March 9, 2012, the Company adopted a Rule 10b5-1 Plan in conjunction with its share repurchase program. The Board of Directors approved the purchase of up to $20 million of the Company’s common stock, which was effective through March 11, 2013. The Company purchased approximately 885,000 shares at an aggregate cost of approximately $7.9 million under the March 2012 Rule 10b5-1 Plan. Additionally, in June 2012, the Company repurchased 1.0 million shares of its common stock for $9.4 million in a privately negotiated transaction outside of the Rule 10b5-1 Plan. This share repurchase authorization superseded the authorization to repurchase shares in June 2011, pursuant to which the Company repurchased approximately 59,000 shares at an aggregate cost of approximately $457,000. |
Retirement_Plan
Retirement Plan | 12 Months Ended |
Sep. 30, 2013 | |
Retirement Plan | ' |
NOTE M — RETIREMENT PLAN | |
The Company maintains a 401(k) Retirement Plan covering all of its eligible employees. Matching contributions made by the employees to the plan are made at the discretion of the board of directors each plan year. Contributions for the years ended September 30, 2013, 2012 and 2011 were $88,000, $108,000 and $106,000, respectively. |
Fair_Value_of_Financial_Measur
Fair Value of Financial Measurements and Disclosures | 12 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Fair Value of Financial Measurements and Disclosures | ' | ||||||||||||||||
NOTE N — FAIR VALUE OF FINANCIAL MEASUREMENTS AND DISCLOSURES | |||||||||||||||||
Disclosures about Fair Value of Financial Instruments | |||||||||||||||||
FASB ASC 825, Financial Instruments, (“ASC 825”), requires disclosure of fair value information about financial instruments, whether or not recognized on the balance sheet, for which it is practicable to estimate that value. Because there are a limited number of market participants for certain of the Company’s assets and liabilities, fair value estimates are based upon judgments regarding credit risk, investor expectation of economic conditions, normal cost of administration and other risk characteristics, including interest rate and prepayment risk. These estimates are subjective in nature and involve uncertainties and matters of judgment, which significantly affect the estimates. | |||||||||||||||||
The estimated fair value of the Company’s financial instruments is summarized as follows: | |||||||||||||||||
September 30, 2013 | 30-Sep-12 | ||||||||||||||||
Carrying | Fair | Carrying | Fair | ||||||||||||||
Amount | Value | Amount | Value | ||||||||||||||
Financial assets | |||||||||||||||||
Available-for-sale investments (Level 1) | $ | 58,035,000 | $ | 58,035,000 | $ | 58,712,000 | $ | 58,712,000 | |||||||||
Certificates of deposit (Level 1) | — | — | 42,682,000 | 42,682,000 | |||||||||||||
Consumer receivables acquired for liquidation (Level 3) | 57,900,000 | 70,875,000 | 86,887,000 | 100,706,000 | |||||||||||||
Financial liabilities | |||||||||||||||||
Non-Recourse Debt (Level 3) | 35,760,000 | 27,000,000 | 61,463,000 | 61,463,000 | |||||||||||||
Disclosure of the estimated fair values of financial instruments often requires the use of estimates. The Company uses the following methods and assumptions to estimate the fair value of financial instruments: | |||||||||||||||||
Certificates of deposit — The carrying amount approximates fair value due to the short-term nature of the deposits. | |||||||||||||||||
Available-for-sale investments — The available-for-sale securities consist of mutual funds that are valued based on quoted prices in active markets. | |||||||||||||||||
Consumer receivables acquired for liquidation — The Company computed the fair value of the consumer receivables acquired for liquidation using its proprietary forecasting model. The Company’s forecasting model utilizes a discounted cash flow analysis. The Company’s cash flows are an estimate of collections for consumer receivables based on variables fully described in Note C: Consumer Receivables Acquired for Liquidation. These cash flows are discounted to determine the fair value. | |||||||||||||||||
Non-Recourse Debt — carries a variable rate. The fair value at September 30, 2013 is based on the discounted weighted average forecasted future collections of the Portfolio Purchase. The carrying value at September 30, 2012 approximated fair value because of the short term nature of the remaining loan term of the then-existing Receivable Finance Agreement. | |||||||||||||||||
Fair Value Hierarchy | |||||||||||||||||
The Company recorded its available-for-sale investments at estimated fair value on a recurring basis. The accompanying consolidated financial statements include estimated fair value information regarding its available-for-sale investments as of September 30, 2013, as required by FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”). ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s level within the fair value hierarchy is based on the lowest level of input significant to the fair value measurement. | |||||||||||||||||
Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to assess at the measurement date. | |||||||||||||||||
Level 2 — Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities in active markets; quoted prices in markets that are not active for identical or similar assets or liabilities; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability. | |||||||||||||||||
Level 3 — Unobservable inputs that are supported by little or no market activity and significant to the fair value of the assets or liabilities that are developed using the reporting entities’ estimates and assumptions, which reflect those that market participants would use. | |||||||||||||||||
The Company’s available-for-sale investments are classified as Level 1 financial instruments based on the classifications described above. The Company did not have any transfers into (out of) Level 1 investments during the fiscal year ended September 30, 2013. The Company had no Level 2 or Level 3 available-for-sale investments during the fiscal year ended September 30, 2013. | |||||||||||||||||
Related_Party_Transactions
Related Party Transactions | 12 Months Ended |
Sep. 30, 2013 | |
Related Party Transactions | ' |
NOTE O — RELATED PARTY TRANSACTIONS | |
On December 12, 2011, the Company and A.L. Piccolo & Co., Inc. (“Piccolo”), which is owned by Louis Piccolo, a director of the Company, entered into a Consulting Agreement, pursuant to which Piccolo will provide consulting services which include, but are not limited to, analysis of proposed debt and equity transactions, due diligence and financial analysis and management consulting services (“Services”). The Consulting Agreement shall be for a period of two years and Piccolo will receive compensation of $150,000 per annum payable monthly, a bonus of $25,000 per new transaction closed by the Company with Piccolo’s assistance (excluding any potential pending transactions) and 30,000 options per year, with such options vesting in three equal annual installments on the first, second and third anniversaries of the first grant date. The total expense recognized related to this agreement during the year ended September 30, 2013 amounted to $279,000. |
Summarized_Quarterly_Data_Unau
Summarized Quarterly Data (Unaudited) | 12 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||
Summarized Quarterly Data (Unaudited) | ' | ||||||||||||||||||||
NOTE P — SUMMARIZED QUARTERLY DATA (UNAUDITED) | |||||||||||||||||||||
Quarter | First | Second | Third | Fourth | Full | ||||||||||||||||
Quarter | Quarter | Quarter | Quarter | Year | |||||||||||||||||
2013 | |||||||||||||||||||||
Total revenue | $ | 10,552,000 | $ | 10,085,000 | $ | 12,668,000 | $ | 9,107,000 | $ | 42,412,000 | |||||||||||
Income (loss) before income taxes | 4,390,000 | 1,560,000 | (4,543,000 | ) | 2,901,000 | 4,308,000 | |||||||||||||||
Net income attributable to Asta | 2,588,000 | 882,000 | (2,737,000 | ) | 2,005,000 | 2,738,000 | |||||||||||||||
Funding, Inc. | |||||||||||||||||||||
Basic net income (loss) per share attributable to Asta Funding, Inc. | $ | 0.2 | $ | 0.07 | $ | (0.21 | ) | $ | 0.16 | $ | 0.21 | ||||||||||
Diluted net income (loss) per share attributable to Asta Funding, Inc. | $ | 0.2 | $ | 0.07 | $ | (0.21 | ) | $ | 0.15 | $ | 0.21 | ||||||||||
2012 | |||||||||||||||||||||
Total revenue | $ | 10,439,000 | $ | 11,470,000 | $ | 11,571,000 | $ | 11,022,000 | $ | 44,502,000 | |||||||||||
Income before income taxes | 4,999,000 | 4,181,000 | 5,136,000 | 2,624,000 | 16,940,000 | ||||||||||||||||
Net income attributable to Asta | 2,977,000 | 2,460,000 | 3,048,000 | 1,552,000 | 10,037,000 | ||||||||||||||||
Funding, Inc. | |||||||||||||||||||||
Basic net income per share attributable to Asta Funding, Inc. | $ | 0.2 | $ | 0.17 | $ | 0.22 | $ | 0.12 | $ | 0.71 | |||||||||||
Diluted net income per share attributable to Asta Funding, Inc. | $ | 0.2 | $ | 0.17 | $ | 0.21 | $ | 0.12 | $ | ||||||||||||
0.7 | |||||||||||||||||||||
* | Due to rounding the sum of quarterly totals for earnings per share may not add to the yearly total. |
The_Company_and_its_Significan1
The Company and its Significant Accounting Policies (Policies) | 12 Months Ended | ||||||||||||||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||||||||||||||
The Company | ' | ||||||||||||||||||||||||||||||||||||
[1] The Company: | |||||||||||||||||||||||||||||||||||||
Asta Funding, Inc., together with its wholly owned significant operating subsidiaries Palisades Collection LLC, Palisades Acquisition XVI, LLC (“Palisades XVI”), VATIV Recovery Solutions LLC (“VATIV”), ASFI Pegasus Holdings, LLC (“APH”), Fund Pegasus, LLC (“Fund Pegasus”), and other subsidiaries, not all wholly owned, and not considered material (collectively, the “Company”), is engaged in the business of purchasing, managing for its own account and servicing distressed consumer receivables, including charged-off receivables, semi-performing receivables, performing receivables and investment in litigation related receivables. The primary charged-off receivables are accounts that have been written-off by the originators and may have been previously serviced by collection agencies. Semi-performing receivables are accounts whereby the debtor is currently making partial or irregular monthly payments, but the accounts may have been written-off by the originators. Performing receivables are accounts whereby the debtor is making regular monthly payments that may or may not have been delinquent in the past. Distressed consumer receivables are the unpaid debts of individuals to banks, finance companies and other credit providers. A large portion of the Company’s distressed consumer receivables are, MasterCard®, Visa®, and other credit card accounts which were charged-off by the issuers for non-payment. The Company acquires these portfolios at substantial discounts from their face values. The discounts are based on the characteristics (issuer, account size, debtor location and age of debt) of the underlying accounts of each portfolio. Litigation related receivables are semi-performing investments whereby the Company is assigned the revenue stream from the proceeds received. | |||||||||||||||||||||||||||||||||||||
In addition, the Company, owns 80% of Pegasus Funding, LLC (“Pegasus”), which invests in funding personal injury claims. | |||||||||||||||||||||||||||||||||||||
The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and industry practices. | |||||||||||||||||||||||||||||||||||||
Liquidity | ' | ||||||||||||||||||||||||||||||||||||
[1A] Liquidity: | |||||||||||||||||||||||||||||||||||||
The Company’s cash requirements have been and will continue to be significant. In the past, we have depended upon external financing to acquire consumer receivables, fund operating expenses, interest and income taxes. If approved, dividends paid is also a significant use of cash. We have depended solely on operating cash flow to fund the acquisition of portfolios, pay operating expenses, dividends, and taxes. As of September 30, 2013, the outstanding amount on the Bank of Montreal (“BMO”) facility (“Receivables Financing Agreement”) that financed the $6.9 billion in face value receivables for a purchase price of $300 million, (the “Portfolio Purchase”) is $35.8 million. We continue to pay down the balance and the interest from the collections of the receivables under the Portfolio Purchase. See Note F — Non-Recourse Debt for further information on the Settlement Agreement signed in August 2013. | |||||||||||||||||||||||||||||||||||||
Net collections decreased $15.9 million or 22.7% from $70.0 million in fiscal year 2012 to $54.1 million in fiscal year 2013. Although the Company’s collections decreased from the prior year, the Company believes its net cash collections over the next twelve months, coupled with its current liquid cash balances, will be sufficient to cover its operating expenses, service debt and pay interest. | |||||||||||||||||||||||||||||||||||||
Principles of Consolidation | ' | ||||||||||||||||||||||||||||||||||||
[2] Principles of consolidation: | |||||||||||||||||||||||||||||||||||||
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. | |||||||||||||||||||||||||||||||||||||
Cash and Cash Equivalents and Restricted Cash | ' | ||||||||||||||||||||||||||||||||||||
[3] Cash and cash equivalents and restricted cash: | |||||||||||||||||||||||||||||||||||||
The Company considers all highly liquid investments with a maturity of three months or less at the date of purchase to be cash equivalents. | |||||||||||||||||||||||||||||||||||||
Cash balances are maintained at various depository institutions and are insured by the Federal Deposit Insurance Corporation (“FDIC”). The Company had cash balances with 7 banks that exceeded the balance insured by the FDIC by approximately $31.1 million at September 30, 2013. The Company had cash balances with 2 banks which amounted to $26.4 million at September 30, 2013. | |||||||||||||||||||||||||||||||||||||
The restricted cash at September 30, 2013 represents cash on hand, substantially all of which is designated to be paid to our lender subsequent to September 30, 2013. The lender has mandated in which depository institutions the cash is to be maintained. | |||||||||||||||||||||||||||||||||||||
Investments | ' | ||||||||||||||||||||||||||||||||||||
[4] Investments | |||||||||||||||||||||||||||||||||||||
Available-for-Sale | |||||||||||||||||||||||||||||||||||||
Investments that the Company intends to hold for an indefinite period of time, but not necessarily to maturity, are classified as available-for-sale and are carried at fair value. Unrealized gains and losses on available-for-sale securities are determined using the specific-identification method. | |||||||||||||||||||||||||||||||||||||
Declines in the fair value of individual available-for-sale securities below their respective costs that are other than temporary will result in write-downs of the individual securities to their fair value. Factors affecting the determination of whether an other-than-temporary impairment has occurred include: a downgrading of the security by a rating agency, a significant deterioration in the financial condition of the issuer, or that management would not have the ability to hold a security for a period of time sufficient to allow for any anticipated recovery in fair value. | |||||||||||||||||||||||||||||||||||||
Certificates of Deposit | |||||||||||||||||||||||||||||||||||||
There were no certificates of deposit at September 30, 2013. Certificates of deposit at September 30, 2012 had maturities greater than three months at the date of purchase. | |||||||||||||||||||||||||||||||||||||
Income Recognition, Impairments and Accretable Yield Adjustments | ' | ||||||||||||||||||||||||||||||||||||
[5] Income recognition, Impairments and Accretable yield adjustments: | |||||||||||||||||||||||||||||||||||||
Income Recognition | |||||||||||||||||||||||||||||||||||||
The Company accounts for its investment in consumer receivables acquired for liquidation using the interest method under the guidance of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 310, Receivables — Loans and Debt Securities Acquired with Deteriorated Credit Quality, (“ASC 310”). In ASC 310 static pools of accounts are established. These pools are aggregated based on certain common risk criteria. Each static pool is recorded at cost and is accounted for as a single unit for the recognition of income, principal payments and loss provision. | |||||||||||||||||||||||||||||||||||||
Once a static pool is established for a quarter, individual receivable accounts are not added to the pool (unless replaced by the seller) or removed from the pool (unless sold or returned to the seller). ASC 310 requires that the excess of the contractual cash flows over expected cash flows not be recognized as an adjustment of revenue or expense or on the balance sheet. ASC 310 initially freezes the internal rate of return (“IRR”), estimated when the accounts receivable are purchased, as the basis for subsequent impairment testing. Significant increases in actual, or expected future cash flows are recognized prospectively through an upward adjustment of the IRR over a portfolio’s remaining life. Any increase to the IRR then becomes the new benchmark for impairment testing. Under ASC 310, rather than lowering the estimated IRR if the collection estimates are not received or projected to be received, the carrying value of a pool would be written down to maintain the then current IRR. | |||||||||||||||||||||||||||||||||||||
Finance income is recognized on cost recovery portfolios after the carrying value has been fully recovered through collections or amounts written down. | |||||||||||||||||||||||||||||||||||||
The Company accounts for its investments in personal injury claims at an agreed upon interest rate, in anticipation of a future settlement. The interest purchased by Pegasus in each claim will consist of the right to receive from such claimant part of the proceeds or recoveries which such claimant receives by reason of a settlement, judgment or reward with respect to such claimant’s claim. Open case revenue is estimated, recognized and accrued at a rate based on the expected realization and underwriting guidelines and facts and circumstances for each individual case. These personal injury claims are non-recourse. | |||||||||||||||||||||||||||||||||||||
When a case is closed and the cash is received for the advance provided to a claimant, revenue is recognized based upon the contractually agreed upon interest rate, and, if applicable, adjusted for any changes due to a settled amount and fees charged to the claimant. | |||||||||||||||||||||||||||||||||||||
The funding of matrimonial actions is on a non-recourse basis. Revenues are recognized under the cost recovery method. | |||||||||||||||||||||||||||||||||||||
Impairments and accretable yield adjustments | |||||||||||||||||||||||||||||||||||||
The Company accounts for its impairments in accordance with ASC 310, which provides guidance on how to account for differences between contractual and expected cash flows from an investor’s initial investment in loans or debt securities acquired in a transfer if those differences are attributable, at least in part, to credit quality. Increases in expected cash flows are recognized prospectively through an adjustment of the internal rate of return while decreases in expected cash flows are recognized as impairments. Impairments of approximately $12.6 million were recorded in the fiscal year ended September 30, 2013. An impairment of approximately $1.4 million was recorded in the fiscal year ended September 30, 2012 and $0.7 million was recorded in fiscal year 2011. Finance income is not recognized on cost recovery method portfolios until the cost of the portfolio is fully recovered. Collection projections are performed on both interest method and cost recovery method portfolios. With regard to the cost recovery portfolios, if collection projections indicate the carrying value will not be recovered, a write down in value is required. There were no accretable yield adjustments recorded in the fiscal years ended September 30, 2013, 2012 and 2011. | |||||||||||||||||||||||||||||||||||||
The recognition of income under ASC 310 is dependent on the Company having the ability to develop reasonable expectations of both the timing and amount of cash flows to be collected. In the event the Company cannot develop a reasonable expectation as to both the timing and amount of cash flows expected to be collected, ASC 310 permits the change to the cost recovery method. The Company will recognize income only after it has recovered its carrying value. As of September 30, 2013, the carrying value of the Portfolio Purchase was approximately $43.4 million. There can be no assurance as to when or if the carrying value will be recovered. | |||||||||||||||||||||||||||||||||||||
The Company’s analysis of the timing and amount of cash flows to be generated by its portfolio purchases and investments are based on the following attributes: | |||||||||||||||||||||||||||||||||||||
• | the type of receivable, the location of the debtor and the number of collection agencies previously attempting to collect the receivables in the portfolio. The Company has found that there are better states to try to collect receivables and the Company factors in both better and worse states when establishing their initial cash flow expectations; | ||||||||||||||||||||||||||||||||||||
• | the average balance of the receivables influences our analysis in that lower average balance portfolios tend to be more collectible in the short-term and higher average balance portfolios are more appropriate for the Company’s lawsuit strategy and thus yield better results over the longer term. As the Company has significant experience with both types of balances, it can factor these variables into its initial expected cash flows; | ||||||||||||||||||||||||||||||||||||
• | the age of the receivables, the number of days since charge-off, any payments since charge-off, and the credit guidelines of the credit originator also represent factors taken into consideration in our estimation process. For example, older receivables might be more difficult and/or require more time and effort to collect; | ||||||||||||||||||||||||||||||||||||
• | past history and performance of similar assets acquired. As the Company purchases portfolios of like assets, it accumulates a significant historical data base on the tendencies of debtor repayments and factor this into its initial expected cash flows; | ||||||||||||||||||||||||||||||||||||
• | the Company’s ability to analyze accounts and resell accounts that meet its criteria; | ||||||||||||||||||||||||||||||||||||
• | jobs or property of the customers found within portfolios. With our business model, this is of particular importance. Customers with jobs or property are more likely to repay their obligation through the lawsuit strategy and, conversely, customers without jobs or property are less likely to repay their obligation. The Company believes that customers with jobs or property are more likely to repay because courts have mandated the debtor must pay the debt. Ultimately, the debtor with property will pay to clear title or release a lien. The Company also believes that these customers generally might take longer to repay and that is factored into its initial expected cash flows; and | ||||||||||||||||||||||||||||||||||||
• | credit standards of the issuer. | ||||||||||||||||||||||||||||||||||||
The Company acquires accounts that have experienced deterioration of credit quality between origination and the date of its acquisition of the accounts. The amount invested in a portfolio of accounts reflects our determination that it is probable we will be unable to collect all amounts due according to the portfolio of accounts’ contractual terms. The Company considers the expected payments and estimates the amount and timing of undiscounted expected principal, interest and other cash flows for each acquired portfolio coupled with expected cash flows from accounts available for sale. The excess of this amount over the cost of the portfolio, representing the excess of the accounts’ cash flows expected to be collected over the amount paid, is accreted into income recognized on finance receivables accounted for on the interest method over the expected remaining life of the portfolio. | |||||||||||||||||||||||||||||||||||||
The Company believes it has significant experience in acquiring certain distressed consumer receivable portfolios at a significant discount to the amount actually owed by underlying customers. The Company invests in these portfolios only after both qualitative and quantitative analyses of the underlying receivables are performed and a calculated purchase price is paid so that it believes its estimated cash flow offers an adequate return on acquisition costs after servicing expenses. Additionally, when considering larger portfolio purchases of accounts, or portfolios from issuers with whom the Company has limited experience, it has the added benefit of soliciting its third party collection agencies and attorneys for their input on liquidation rates and, at times, incorporates such input into the estimates it uses for its expected cash flows. | |||||||||||||||||||||||||||||||||||||
As a result of the challenging economic environment and the impact it has had on collections, for portfolio purchases acquired in fiscal year 2013, the Company’s expectation of recovering 100% of its invested capital is a 24-39 month period, with the expectation of recovering 130-140% over 7 years. The 2013 time frame of expectations have remained unchanged from fiscal year 2012. The Company routinely monitors these expectations against the actual cash flows and, in the event the cash flows are below expectations and the Company believes there are no reasons relating to mere timing differences or explainable delays (such as can occur particularly when the court system is involved) for the reduced collections, an impairment is recorded on portfolios accounted for on the interest method. Conversely, in the event the cash flows are in excess of its expectations and the reason is due to timing, the Company would defer the “excess” collection as deferred revenue. | |||||||||||||||||||||||||||||||||||||
Commissions and Fees | ' | ||||||||||||||||||||||||||||||||||||
[6] Commissions and fees: | |||||||||||||||||||||||||||||||||||||
Commissions and fees are the contractual commissions earned by third party collection agencies and attorneys, and direct costs associated with the collection effort- generally court costs. The Company expects to continue to purchase portfolios and utilize third party collection agencies and attorney networks. | |||||||||||||||||||||||||||||||||||||
Furniture, Equipment and Leasehold Improvements | ' | ||||||||||||||||||||||||||||||||||||
[7] Furniture, equipment and leasehold improvements: | |||||||||||||||||||||||||||||||||||||
Furniture and equipment is stated at cost. Depreciation is provided using the straight-line method over the estimated useful lives of the assets (5 to 7 years). Amortization on leasehold improvements is provided by the straight line-method of the remaining life of the respective lease. An accelerated depreciation method is used for tax purposes. | |||||||||||||||||||||||||||||||||||||
Income Taxes | ' | ||||||||||||||||||||||||||||||||||||
[8] Income taxes: | |||||||||||||||||||||||||||||||||||||
Deferred federal and state taxes arise from (i) recognition of finance income collected for tax purposes, but not yet recognized for financial reporting; (ii) provision for impairments/credit losses, all resulting in timing differences between financial accounting and tax reporting, and (iii) amortization of leasehold improvements resulting in timing differences between financial accounting and tax reporting. | |||||||||||||||||||||||||||||||||||||
Net income Per Share | ' | ||||||||||||||||||||||||||||||||||||
[9] Net income per share: | |||||||||||||||||||||||||||||||||||||
Basic per share data is determined by dividing net income by the weighted average shares outstanding during the period. Diluted per share data is computed by dividing net income by the weighted average shares outstanding, assuming all dilutive potential common shares were issued. The assumed proceeds from the exercise of dilutive options are calculated using the treasury stock method based on the average market price for the period. | |||||||||||||||||||||||||||||||||||||
The following table presents the computation of basic and diluted per share data for the fiscal years ended September 30, 2013, 2012 and 2011: | |||||||||||||||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||||||||||||||
Net | Weighted | Per | Net | Weighted | Per | Net | Weighted | Per | |||||||||||||||||||||||||||||
Income | Average | Share | Income | Average | Share | Income | Average | Share | |||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||
Basic | $ | 2,738,000 | 12,952,150 | $ | 0.21 | $ | 10,037,000 | 14,077,650 | $ | 0.71 | $ | 10,521,000 | 14,626,973 | $ | 0.72 | ||||||||||||||||||||||
Dilutive effect of stock options | 263,901 | 243,731 | (0.01 | ) | 200,635 | (0.01 | ) | ||||||||||||||||||||||||||||||
Diluted | $ | 2,738,000 | 13,216,051 | $ | 0.21 | $ | 10,037,000 | 14,321,381 | $ | 0.7 | $ | 10,521,000 | 14,827,608 | $ | 0.71 | ||||||||||||||||||||||
At September 30, 2013, 606,332 options at a weighted average exercise price of $8.01 were not included in the diluted earnings per share calculation as they were anti-dilutive. At September 30, 2012, 1,210,396 options at a weighted average exercise price of $12.23 were not included in the diluted earnings per share calculation as they were anti-dilutive. At September 30, 2011, 986,732 options at a weighted average exercise price of $13.18 were not included in the diluted earnings per share calculation as they were anti-dilutive. | |||||||||||||||||||||||||||||||||||||
Use of Estimates | ' | ||||||||||||||||||||||||||||||||||||
[10] Use of estimates: | |||||||||||||||||||||||||||||||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. With respect to income recognition under the interest method, the Company takes into consideration the relative credit quality of the underlying receivables constituting the portfolio acquired, the strategy involved to maximize the collections thereof, the time required to implement the collection strategy as well as other factors to estimate the anticipated cash flows. Actual results could differ from those estimates including management’s estimates of future cash flows and the resultant allocation of collections between principal and interest resulting therefrom. Downward revisions to estimated cash flows will result in impairments. | |||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | ' | ||||||||||||||||||||||||||||||||||||
[11] Stock-based compensation: | |||||||||||||||||||||||||||||||||||||
The Company accounts for stock-based employee compensation under FASB ASC 718, Compensation — Stock Compensation, (“ASC 718”). ASC 718 requires that compensation expense associated with stock options and vesting of restricted stock awards be recognized in the statement of income. | |||||||||||||||||||||||||||||||||||||
Impact of Recently Issued Accounting Standards | ' | ||||||||||||||||||||||||||||||||||||
[12] Impact of Recently Issued Accounting Standards: | |||||||||||||||||||||||||||||||||||||
In July 2013, the FASB issued Accounting Standards Update (“ASU”) No. 2013-11 “Income Taxes (Topic 740) Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.” There is diversity in practice in the presentation of unrecognized tax benefits in those instances. Some entities present unrecognized tax benefits as a liability unless the unrecognized tax benefit is directly associated with a tax position taken in a tax year that results in, or that resulted in, the recognition of a net operating loss or tax credit carryforward for that year and the net operating loss or tax credit carryforward has not been utilized. Other entities present unrecognized tax benefits as a reduction of a deferred tax asset for a net operating loss or tax credit carryforward in certain circumstances. The objective of the amendments in this Update is to eliminate that diversity in practice. This standard becomes effective for fiscal years and interim periods beginning after December 15, 2013. The Company is reviewing the affects of implementation of this standard. | |||||||||||||||||||||||||||||||||||||
In February 2013, the FASB issued Accounting Standards Update (“ASU”) No. 2013-02 “Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income”. The amendments require an entity to present, either in the income statement or the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income, but only if the amount reclassified is required under U.S. Generally Accepted Accounting Principles (“GAAP”) to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety, an entity is required to cross-reference to other disclosures that might provide additional details about the amounts. This ASU was effective for annual and interim periods beginning January 1, 2013. Adoption of the ASU did not have a significant effect on the Company’s consolidated financial statements (see Note B: Investments). | |||||||||||||||||||||||||||||||||||||
Reclassifications | ' | ||||||||||||||||||||||||||||||||||||
[13] Reclassifications: | |||||||||||||||||||||||||||||||||||||
Certain items in prior years’ financial statements have been reclassified to conform to the current year’s presentation, principally related to certain cash flow items. |
The_Company_and_its_Significan2
The Company and its Significant Accounting Policies (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||||||||||||||
Computation of Basic and Diluted Per Share | ' | ||||||||||||||||||||||||||||||||||||
The following table presents the computation of basic and diluted per share data for the fiscal years ended September 30, 2013, 2012 and 2011: | |||||||||||||||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||||||||||||||
Net | Weighted | Per | Net | Weighted | Per | Net | Weighted | Per | |||||||||||||||||||||||||||||
Income | Average | Share | Income | Average | Share | Income | Average | Share | |||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||
Basic | $ | 2,738,000 | 12,952,150 | $ | 0.21 | $ | 10,037,000 | 14,077,650 | $ | 0.71 | $ | 10,521,000 | 14,626,973 | $ | 0.72 | ||||||||||||||||||||||
Dilutive effect of stock options | 263,901 | 243,731 | (0.01 | ) | 200,635 | (0.01 | ) | ||||||||||||||||||||||||||||||
Diluted | $ | 2,738,000 | 13,216,051 | $ | 0.21 | $ | 10,037,000 | 14,321,381 | $ | 0.7 | $ | 10,521,000 | 14,827,608 | $ | 0.71 | ||||||||||||||||||||||
Investments_Tables
Investments (Tables) | 12 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Available-for-Sale | ' | ||||||||||||||||
Mutual funds investments classified as available-for-sale at September 30, 2013 and 2012 consist of the following: | |||||||||||||||||
Amortized | Unrealized | Unrealized | Fair Value | ||||||||||||||
Cost | Gains | Losses | |||||||||||||||
2013 | $ | 59,151,000 | $ | 27,000 | $ | (1,143,000 | ) | $ | 58,035,000 | ||||||||
2012 | $ | 58,308,000 | $ | 404,000 | $ | — | $ | 58,712,000 | |||||||||
Other Investments | ' | ||||||||||||||||
Other investments consist of the following: | |||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
Certificates of deposits in banks | $ | — | $ | 42,682,000 |
Consumer_Receivables_Acquired_1
Consumer Receivables Acquired for Liquidation (Tables) | 12 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Changes in Balance Sheet Account of Consumer Receivables Acquired for Liquidation | ' | ||||||||||||
The following tables summarize the changes in the balance sheet of the investment in receivable portfolios during the following periods: | |||||||||||||
For the Year Ended September 30, 2013 | |||||||||||||
Interest | Cost | Total | |||||||||||
Method | Recovery | ||||||||||||
Portfolios | Portfolios | ||||||||||||
Balance, beginning of period | $ | 12,326,000 | $ | 74,561,000 | $ | 86,887,000 | |||||||
Acquisitions of receivable portfolios | 3,340,000 | — | 3,340,000 | ||||||||||
Net cash collections from collection of consumer receivables acquired for liquidation | (34,128,000 | ) | (17,522,000 | ) | (51,650,000 | ) | |||||||
Cash collections represented by account sales of consumer receivables acquired for liquidation | (989,000 | ) | (1,459,000 | ) | (2,448,000 | ) | |||||||
Impairments | (2,444,000 | ) | (10,148,000 | ) | (12,592,000 | ) | |||||||
Finance income recognized(1) | 29,966,000 | 4,397,000 | 34,363,000 | ||||||||||
Balance, end of period | $ | 8,071,000 | $ | 49,829,000 | $ | 57,900,000 | |||||||
Finance income as a percentage of collections | 85.3 | % | 23.2 | % | 63.5 | % | |||||||
-1 | Includes $33.2 million derived from fully amortized pools. Finance income recognized from account sales amounted to $2.0 million. | ||||||||||||
For the Year Ended September 30, 2012 | |||||||||||||
Interest | Cost | Total | |||||||||||
Method | Recovery | ||||||||||||
Portfolios | Portfolios | ||||||||||||
Balance, beginning of period | $ | 31,193,000 | $ | 84,002,000 | $ | 115,195,000 | |||||||
Acquisitions of receivable portfolios | 1,278,000 | 1,217,000 | 2,495,000 | ||||||||||
Net cash collections from collection of consumer receivables acquired for liquidation | (49,723,000 | ) | (20,179,000 | ) | (69,902,000 | ) | |||||||
Cash collections represented by account sales of consumer receivables acquired for liquidation | (117,000 | ) | — | (117,000 | ) | ||||||||
Transfer to cost recovery | (6,484,000 | ) | 6,484,000 | — | |||||||||
Impairments | (1,383,000 | ) | — | (1,383,000 | ) | ||||||||
Finance income recognized(1) | 37,562,000 | 3,037,000 | 40,599,000 | ||||||||||
Balance, end of period | $ | 12,326,000 | $ | 74,561,000 | $ | 86,887,000 | |||||||
Revenue as a percentage of collections | 75.4 | % | 15.1 | % | 58 | % | |||||||
-1 | Includes $36.4 million derived from fully amortized pools. Finance income recognized from account sales amounted to $0.1 million. | ||||||||||||
Net Cash Collections, Applied to Principal for Interest Method Portfolios | ' | ||||||||||||
Based upon current projections, net cash collections, applied to principal for interest method portfolios are estimated as follows for the twelve months in the periods ending: | |||||||||||||
September 30, 2014 | $ | 4,291,000 | |||||||||||
September 30, 2015 | 1,051,000 | ||||||||||||
September 30, 2016 | 813,000 | ||||||||||||
September 30, 2017 | 636,000 | ||||||||||||
September 30, 2018 | 536,000 | ||||||||||||
September 30, 2019 | 463,000 | ||||||||||||
September 30, 2020 | 281,000 | ||||||||||||
Total | $ | 8,071,000 | |||||||||||
Changes in Accretable Yield | ' | ||||||||||||
Projected accretable yield for the fiscal years ended September 30, 2013 and 2012 are as follows: | |||||||||||||
Year Ended | |||||||||||||
September 30, | |||||||||||||
2013 | |||||||||||||
Balance at beginning of period, October 1, 2012 | $ | 2,086,000 | |||||||||||
Income recognized on finance receivables, net | (29,966,000 | ) | |||||||||||
Additions representing expected revenue from purchases | 983,000 | ||||||||||||
Reclassifications from non-accretable difference(1) | 28,013,000 | ||||||||||||
Balance at end of period, September 30, 2013 | $ | 1,116,000 | |||||||||||
-1 | Includes portfolios that became zero based portfolios during the period, removal of zero basis portfolios from the accretable yield calculation and, other immaterial impairments and accretions based on the certain collection curves being extended. | ||||||||||||
Year Ended | |||||||||||||
September 30, | |||||||||||||
2012 | |||||||||||||
Balance at beginning of period, October 1, 2011 | $ | 7,473,000 | |||||||||||
Income recognized on finance receivables, net | (37,561,000 | ) | |||||||||||
Additions representing expected revenue from purchases | 361,000 | ||||||||||||
Transfers to Cost Recovery | (1,840,000 | ) | |||||||||||
Reclassifications from non-accretable difference(1) | 33,653,000 | ||||||||||||
Balance at end of period, September 30, 2012 | $ | 2,086,000 | |||||||||||
Collections on Gross Basis Less Commissions and Direct Costs | ' | ||||||||||||
The following table summarizes collections received by the Company’s third-party collection agencies and attorneys, less commissions and direct costs for the years ended September 30, 2013, 2012 and 2011, respectively. | |||||||||||||
For the Years Ended, September 30, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Gross collections(1) | $ | 85,512,000 | $ | 108,487,000 | $ | 129,688,000 | |||||||
Less: commissions and fees(2) | 31,414,000 | 38,468,000 | 48,483,000 | ||||||||||
Net collections | $ | 54,098,000 | $ | 70,019,000 | $ | 81,205,000 | |||||||
-1 | Gross collections include collections from third-party collection agencies and attorneys, collections from in-house efforts and collections represented by account sales. | ||||||||||||
-2 | Commissions and fees are the contractual commissions earned by third party collection agencies and attorneys, and direct costs associated with the collection effort, generally court costs. Includes a 3% fee charged by a servicer on gross collections in connection with the Portfolio Purchase. Such arrangement was consummated in December 2007. The fee is charged for asset location, skip tracing and ultimately suing debtors in connection with this portfolio purchase. |
Furniture_and_Equipment_Tables
Furniture and Equipment (Tables) | 12 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Furniture and Equipment | ' | ||||||||
Furniture and equipment as of September 30, 2013 and 2012 consist of the following: | |||||||||
2013 | 2012 | ||||||||
Furniture | $ | 310,000 | $ | 310,000 | |||||
Equipment | 3,622,000 | 3,470,000 | |||||||
Software | 1,211,000 | 638,000 | |||||||
Leasehold improvements | 99,000 | 99,000 | |||||||
5,242,000 | 4,517,000 | ||||||||
Less accumulated depreciation | 4,136,000 | 3,696,000 | |||||||
$ | 1,106,000 | $ | 821,000 | ||||||
Other_Liabilities_Tables
Other Liabilities (Tables) | 12 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Other Liabilities | ' | ||||||||
Other liabilities as of September 30, 2013 and 2012 are as follows: | |||||||||
2013 | 2012 | ||||||||
Accounts payable and accrued expenses | $ | 2,274,000 | $ | 2,091,000 | |||||
Accrued interest payable | 4,000 | 192,000 | |||||||
Other | 208,000 | 637,000 | |||||||
Total other liabilities | $ | 2,486,000 | $ | 2,920,000 | |||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Components of Provision for Income Taxes | ' | ||||||||||||
The components of the provision for income taxes for the years ended September 30, 2013, 2012 and 2011 are as follows: | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Current: | |||||||||||||
Federal | $ | 561,000 | $ | 3,437,000 | $ | 2,418,000 | |||||||
State | 383,000 | — | — | ||||||||||
Federal true up | 42,000 | 73,000 | |||||||||||
944,000 | 3,479,000 | 2,491,000 | |||||||||||
Deferred: | |||||||||||||
Federal | 212,000 | 1,813,000 | 2,963,000 | ||||||||||
State | 8,000 | 1,580,000 | 1,648,000 | ||||||||||
220,000 | 3,393,000 | 4,611,000 | |||||||||||
Provision for income taxes | $ | 1,164,000 | $ | 6,872,000 | $ | 7,102,000 | |||||||
Corporate Federal Income Tax Returns Subject to Examination by IRS | ' | ||||||||||||
The difference between the statutory federal income tax rate on the Company’s pre-tax income and the Company’s effective income tax rate is summarized for the years ended September 30, 2013, 2012 and 2011 as follows: | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Statutory federal income tax rate | 34 | % | 34 | % | 34 | % | |||||||
State income tax, net of federal benefit | 6.1 | 6.1 | 6.3 | ||||||||||
Deferred tax valuation allowance | — | — | 1.8 | ||||||||||
Permanent difference in municipal interest | (7.5 | ) | — | — | |||||||||
Permanent difference other | (0.7 | ) | — | — | |||||||||
Federal prior year provision to tax return difference | (2.1 | ) | 0.2 | — | |||||||||
Other | (2.8 | ) | 0.3 | (1.8 | ) | ||||||||
Effective income tax rate | 27 | % | 40.6 | % | 40.3 | % | |||||||
Schedule of Net Deferred Tax Asset | ' | ||||||||||||
The Company recognized a net deferred tax asset of $10,443,000 and $10,410,000 as of September 30, 2013 and 2012, respectively. The components are as follows: | |||||||||||||
September 30, | September 30, | ||||||||||||
2013 | 2012 | ||||||||||||
Deferred and accrued revenue | $ | (414,000 | ) | $ | (116,000 | ) | |||||||
Impairments/bad debt reserves | 5,241,000 | 5,449,000 | |||||||||||
State tax net operating loss carryforward | 9,524,000 | 9,671,000 | |||||||||||
Stock based compensation | 2,133,000 | 1,737,000 | |||||||||||
Depreciation, amortization and other | (312,000 | ) | (571,000 | ) | |||||||||
Deferred income taxes | 16,172,000 | 16,170,000 | |||||||||||
Deferred tax valuation allowance | (5,729,000 | ) | (5,760,000 | ) | |||||||||
Deferred income taxes | $ | 10,443,000 | $ | 10,410,000 | |||||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||
Sep. 30, 2013 | |||||
Schedule of Future Minimum Lease Payments | ' | ||||
The future minimum lease payments are as follows: | |||||
Year | |||||
Ending | |||||
September 30, | |||||
2014 | $ | 540,000 | |||
2015 | 505,000 | ||||
2016 | 295,000 | ||||
2017 | 248,000 | ||||
$ | 1,588,000 | ||||
Stock_Options_Plans_Tables
Stock Options Plans (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||
Assumptions Used in Option Pricing Model | ' | ||||||||||||||||||||||||
The assumptions used in the option pricing model were as follows: | |||||||||||||||||||||||||
Risk-free interest rate | 0.1 | % | |||||||||||||||||||||||
Expected term (years) | 6.2 | ||||||||||||||||||||||||
Expected volatility | 99.7 | % | |||||||||||||||||||||||
Dividend yield | 0.92 | % | |||||||||||||||||||||||
Risk-free interest rate | 0.16 | % | |||||||||||||||||||||||
Expected term (years) | 6 | ||||||||||||||||||||||||
Expected volatility | 101 | % | |||||||||||||||||||||||
Dividend yield | 1.67 | % | |||||||||||||||||||||||
Risk-free interest rate | 0.08 | % | |||||||||||||||||||||||
Expected term (years) | 10 | ||||||||||||||||||||||||
Expected volatility | 103.9 | % | |||||||||||||||||||||||
Dividend yield | 1.03 | % | |||||||||||||||||||||||
Risk-free interest rate | 0.08 | % | |||||||||||||||||||||||
Expected term (years) | 10 | ||||||||||||||||||||||||
Expected volatility | 95.7 | % | |||||||||||||||||||||||
Dividend yield | 1.03 | % | |||||||||||||||||||||||
Risk-free interest rate | 0.09 | % | |||||||||||||||||||||||
Expected term (years) | 10 | ||||||||||||||||||||||||
Expected volatility | 105.4 | % | |||||||||||||||||||||||
Dividend yield | 0.95 | % | |||||||||||||||||||||||
Risk-free interest rate | 0.1 | % | |||||||||||||||||||||||
Expected term (years) | 10 | ||||||||||||||||||||||||
Expected volatility | 106.2 | % | |||||||||||||||||||||||
Dividend yield | 0.94 | % | |||||||||||||||||||||||
Risk-free interest rate | 0.17 | % | |||||||||||||||||||||||
Expected term (years) | 10 | ||||||||||||||||||||||||
Expected volatility | 106.9 | % | |||||||||||||||||||||||
Dividend yield | 0.98 | % | |||||||||||||||||||||||
Stock Option Transactions | ' | ||||||||||||||||||||||||
The following table summarizes stock option transactions under the plans: | |||||||||||||||||||||||||
Year Ended September 30, | |||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||
Shares | Weighted | Shares | Weighted | Shares | Weighted | ||||||||||||||||||||
Average | Average | Average | |||||||||||||||||||||||
Exercise | Exercise | Exercise | |||||||||||||||||||||||
Price | Price | Price | |||||||||||||||||||||||
Outstanding options at the beginning of year | 1,499,471 | $ | 11.27 | 1,294,271 | $ | 11.41 | 922,039 | $ | 12.7 | ||||||||||||||||
Options granted | 210,000 | 9.36 | 360,000 | 7.87 | 384,800 | 7.53 | |||||||||||||||||||
Options cancelled | (50,000 | ) | 7.77 | (15,300 | ) | 6 | (6,300 | ) | 6.07 | ||||||||||||||||
Options exercised | (36,700 | ) | 3.41 | (139,500 | ) | 4.36 | (6,268 | ) | 3.35 | ||||||||||||||||
Outstanding options at the end of year | 1,622,771 | $ | 11.31 | 1,499,471 | $ | 11.27 | 1,294,271 | $ | 11.41 | ||||||||||||||||
Exercisable options at the end of year | 1,108,271 | $ | 12.62 | 1,000,904 | $ | 12.93 | 992,607 | $ | 12.41 | ||||||||||||||||
Summary of Outstanding Options | ' | ||||||||||||||||||||||||
The following table summarizes information about the plans’ outstanding options as of September 30, 2013: | |||||||||||||||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||||||||||||||
Range of | Number | Weighted | Weighted | Number | Weighted | ||||||||||||||||||||
Exercise Price | Outstanding | Average | Average | Exercisable | Average | ||||||||||||||||||||
Remaining | Exercise | Exercise | |||||||||||||||||||||||
Contractual | Price | Price | |||||||||||||||||||||||
Life (In Years) | |||||||||||||||||||||||||
$ 2.8751 - $ 5.7500 | 18,700 | 5.6 | $ | 2.95 | 18,700 | $ | 2.95 | ||||||||||||||||||
$ 5.7501 - $ 8.6250 | 790,800 | 7.4 | 7.81 | 486,300 | 7.77 | ||||||||||||||||||||
$ 8.6251 - $14.3750 | 260,000 | 9 | 9.77 | 50,000 | 11.5 | ||||||||||||||||||||
$14.3751 - $17.2500 | 198,611 | 0.1 | 14.88 | 198,611 | 14.88 | ||||||||||||||||||||
$17.2501 - $20.1250 | 339,660 | 1.1 | 18.23 | 339,660 | 18.23 | ||||||||||||||||||||
$25.8751 - $28.7500 | 15,000 | 3.2 | 28.75 | 15,000 | 28.75 | ||||||||||||||||||||
1,622,771 | 5.4 | $ | 11.31 | 1,108,271 | $ | 12.62 | |||||||||||||||||||
Summary of Restricted Stock Transactions | ' | ||||||||||||||||||||||||
The following table summarizes information about restricted stock transactions: | |||||||||||||||||||||||||
Year Ended | Weighted | Year Ended | Weighted | ||||||||||||||||||||||
September 30, 2013 | Average | September 30, 2012 | Average | ||||||||||||||||||||||
Shares | Grant Date | Shares | Grant Date | ||||||||||||||||||||||
Fair Value | Fair Value | ||||||||||||||||||||||||
Unvested at the beginning of period | 10,922 | $ | 7.63 | 21,843 | $ | 7.63 | |||||||||||||||||||
Awards granted | 102,321 | 9.57 | — | 0 | |||||||||||||||||||||
Vested | (10,922 | ) | 7.63 | (10,921 | ) | 7.63 | |||||||||||||||||||
Forfeited | — | 0 | — | 0 | |||||||||||||||||||||
Unvested at the end of period | 102,321 | $ | 9.57 | 10,922 | $ | 7.63 | |||||||||||||||||||
Fair_Value_of_Financial_Measur1
Fair Value of Financial Measurements and Disclosures (Tables) | 12 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Estimated Fair Value of Company's Financial Instruments | ' | ||||||||||||||||
The estimated fair value of the Company’s financial instruments is summarized as follows: | |||||||||||||||||
September 30, 2013 | 30-Sep-12 | ||||||||||||||||
Carrying | Fair | Carrying | Fair | ||||||||||||||
Amount | Value | Amount | Value | ||||||||||||||
Financial assets | |||||||||||||||||
Available-for-sale investments (Level 1) | $ | 58,035,000 | $ | 58,035,000 | $ | 58,712,000 | $ | 58,712,000 | |||||||||
Certificates of deposit (Level 1) | — | — | 42,682,000 | 42,682,000 | |||||||||||||
Consumer receivables acquired for liquidation (Level 3) | 57,900,000 | 70,875,000 | 86,887,000 | 100,706,000 | |||||||||||||
Financial liabilities | |||||||||||||||||
Non-Recourse Debt (Level 3) | 35,760,000 | 27,000,000 | 61,463,000 | 61,463,000 |
Summarized_Quarterly_Data_Unau1
Summarized Quarterly Data (Unaudited) (Tables) | 12 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||
Summarized Quarterly Data (Unaudited) | ' | ||||||||||||||||||||
Quarter | First | Second | Third | Fourth | Full | ||||||||||||||||
Quarter | Quarter | Quarter | Quarter | Year | |||||||||||||||||
2013 | |||||||||||||||||||||
Total revenue | $ | 10,552,000 | $ | 10,085,000 | $ | 12,668,000 | $ | 9,107,000 | $ | 42,412,000 | |||||||||||
Income (loss) before income taxes | 4,390,000 | 1,560,000 | (4,543,000 | ) | 2,901,000 | 4,308,000 | |||||||||||||||
Net income attributable to Asta | 2,588,000 | 882,000 | (2,737,000 | ) | 2,005,000 | 2,738,000 | |||||||||||||||
Funding, Inc. | |||||||||||||||||||||
Basic net income (loss) per share attributable to Asta Funding, Inc. | $ | 0.2 | $ | 0.07 | $ | (0.21 | ) | $ | 0.16 | $ | 0.21 | ||||||||||
Diluted net income (loss) per share attributable to Asta Funding, Inc. | $ | 0.2 | $ | 0.07 | $ | (0.21 | ) | $ | 0.15 | $ | 0.21 | ||||||||||
2012 | |||||||||||||||||||||
Total revenue | $ | 10,439,000 | $ | 11,470,000 | $ | 11,571,000 | $ | 11,022,000 | $ | 44,502,000 | |||||||||||
Income before income taxes | 4,999,000 | 4,181,000 | 5,136,000 | 2,624,000 | 16,940,000 | ||||||||||||||||
Net income attributable to Asta | 2,977,000 | 2,460,000 | 3,048,000 | 1,552,000 | 10,037,000 | ||||||||||||||||
Funding, Inc. | |||||||||||||||||||||
Basic net income per share attributable to Asta Funding, Inc. | $ | 0.2 | $ | 0.17 | $ | 0.22 | $ | 0.12 | $ | 0.71 | |||||||||||
Diluted net income per share attributable to Asta Funding, Inc. | $ | 0.2 | $ | 0.17 | $ | 0.21 | $ | 0.12 | $ | ||||||||||||
0.7 | |||||||||||||||||||||
* | Due to rounding the sum of quarterly totals for earnings per share may not add to the yearly total. |
The_Company_and_its_Significan3
The Company and its Significant Accounting Policies - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2011 | |
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ' | ' | ' |
Revolving debt level Liquidity | $35,800,000 | $61,500,000 | ' |
Decrease in net collections | ' | 15,900,000 | ' |
Net collections | 54,098,000 | 70,019,000 | 81,205,000 |
Number of banks in which cash balances maintained | 2 | ' | ' |
Cash at bank | 26,400,000 | ' | ' |
Asset impairment | 12,600,000 | 1,400,000 | 700,000 |
Carrying value of purchased portfolio | 43,400,000 | ' | ' |
Recovering percentage from invested capital | 100.00% | ' | ' |
Expected time period for recovering of capital | '7 years | ' | ' |
Options excluded in diluted earnings per share calculation | 606,332 | 1,210,396 | 986,732 |
Options weighted average exercise price | $8.01 | $12.23 | $13.18 |
Decrease | ' | ' | ' |
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ' | ' | ' |
Percentage decrease in net collections | ' | 22.70% | ' |
Pegasus | ' | ' | ' |
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ' | ' | ' |
Ownership interest | 80.00% | ' | ' |
F D I C | ' | ' | ' |
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ' | ' | ' |
Number of banks in which cash balances maintained | 7 | ' | ' |
Cash balance that exceed the balance insured by FDIC | 31,100,000 | ' | ' |
Minimum | ' | ' | ' |
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ' | ' | ' |
Recovering percentage from invested capital | 130.00% | ' | ' |
Expected time period for recovering of capital | '24 months | ' | ' |
Estimated useful lives of assets | '5 years | ' | ' |
Maximum | ' | ' | ' |
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ' | ' | ' |
Recovering percentage from invested capital | 140.00% | ' | ' |
Expected time period for recovering of capital | '39 months | ' | ' |
Estimated useful lives of assets | '7 years | ' | ' |
Portfolio Purchase | ' | ' | ' |
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ' | ' | ' |
Receivables financing agreement | 6,900,000,000 | ' | ' |
Receivable purchase price | $300,000,000 | ' | ' |
Computation_of_Basic_and_Dilut
Computation of Basic and Diluted Per Share Data (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2011 | |
Schedule Of Computation Of Basic And Diluted Earnings Per Common Share [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Basic, Net Income | ' | ' | ' | ' | ' | ' | ' | ' | $2,738,000 | $10,037,000 | $10,521,000 |
Dilutive effect of stock options, Net Income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Diluted, Net Income | ' | ' | ' | ' | ' | ' | ' | ' | $2,738,000 | $10,037,000 | $10,521,000 |
Basic, Weighted Average Shares | ' | ' | ' | ' | ' | ' | ' | ' | 12,952,150 | 14,077,650 | 14,626,973 |
Dilutive effect of stock options, Weighted Average Shares | ' | ' | ' | ' | ' | ' | ' | ' | 263,901 | 243,731 | 200,635 |
Diluted, Weighted Average Shares | ' | ' | ' | ' | ' | ' | ' | ' | 13,216,051 | 14,321,381 | 14,827,608 |
Basic, per share amount | $0.16 | ($0.21) | $0.07 | $0.20 | $0.12 | $0.22 | $0.17 | $0.20 | $0.21 | $0.71 | $0.72 |
Dilutive effect of stock options, per share amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ($0.01) | ($0.01) |
Diluted, Per share amount | $0.15 | ($0.21) | $0.07 | $0.20 | $0.12 | $0.21 | $0.17 | $0.20 | $0.21 | $0.70 | $0.71 |
Available_for_Sale_Detail
Available for Sale (Detail) (USD $) | Sep. 30, 2013 | Sep. 30, 2012 |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized Cost | $59,151,000 | $58,308,000 |
Unrealized Gains | 27,000 | 404,000 |
Unrealized Losses | -1,143,000 | ' |
Fair Value | $58,035,000 | $58,712,000 |
Investments_Additional_Informa
Investments - Additional Information (Detail) (USD $) | 12 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Investment | Investment | |
Investments [Line Items] | ' | ' |
Number of investments sold | 4 | 5 |
Realized gain (loss) of investment | $252,000 | $339,000 |
Capital gains received | $225,000 | ' |
Number of investments | 6 | ' |
Number of unrealized loss position in investment | 5 | ' |
Number of unrealized gain position in investment | ' | 6 |
Substantial penalties for withdrawal prior to maturity | '1 year | ' |
Other_Investments_Detail
Other Investments (Detail) (USD $) | Sep. 30, 2012 |
Investments [Line Items] | ' |
Certificates of deposits in banks | $42,682,000 |
Consumer_Receivables_Acquired_2
Consumer Receivables Acquired for Liquidation - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2011 | |
Consumer Receivables Acquired For Liquidation [Line Items] | ' | ' | ' |
Consumer receivables acquired for liquidation using interest method | $8,071,000 | ' | ' |
Consumer receivables acquired for liquidation using cost recovery method | 49,800,000 | ' | ' |
Consumer receivables acquired for liquidation concentrated in one portfolio | 43,400,000 | ' | ' |
Consumer receivables acquired for liquidation (at net realizable value) | 57,900,000 | 86,887,000 | ' |
Face value of charged-off consumer receivables | 53,500,000 | 6,000,000 | ' |
Purchased cost of charged-off consumer receivables | 3,300,000 | 2,500,000 | ' |
Net collections on the interest method receivables | $2,000,000 | $100,000 | $200,000 |
Changes_in_Balance_Sheet_Accou
Changes in Balance Sheet Account of Consumer Receivables Acquired for Liquidation (Detail) (USD $) | 12 Months Ended | ||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2011 | |||
Consumer Receivables Acquired For Liquidation [Line Items] | ' | ' | ' | ||
Balance, beginning of period | $86,887,000 | $115,195,000 | ' | ||
Acquisitions of receivable portfolios | 3,340,000 | 2,495,000 | ' | ||
Net cash collections from collection of consumer receivables acquired for liquidation | -51,650,000 | -69,902,000 | ' | ||
Cash collections represented by account sales of consumer receivables acquired for liquidation | -2,448,000 | -117,000 | ' | ||
Transfer to cost recovery | ' | -1,840,000 | ' | ||
Impairments | -12,592,000 | -1,383,000 | -721,000 | ||
Finance income recognized | 34,363,000 | [1] | 40,599,000 | [2] | 42,610,000 |
Balance, end of period | 57,900,000 | 86,887,000 | 115,195,000 | ||
Finance income as a percentage of collections | 63.50% | 58.00% | ' | ||
Interest Method Portfolios | ' | ' | ' | ||
Consumer Receivables Acquired For Liquidation [Line Items] | ' | ' | ' | ||
Balance, beginning of period | 12,326,000 | 31,193,000 | ' | ||
Acquisitions of receivable portfolios | 3,340,000 | 1,278,000 | ' | ||
Net cash collections from collection of consumer receivables acquired for liquidation | -34,128,000 | -49,723,000 | ' | ||
Cash collections represented by account sales of consumer receivables acquired for liquidation | -989,000 | -117,000 | ' | ||
Transfer to cost recovery | ' | -6,484,000 | ' | ||
Impairments | -2,444,000 | -1,383,000 | ' | ||
Finance income recognized | 29,966,000 | [1] | 37,562,000 | [2] | ' |
Balance, end of period | 8,071,000 | 12,326,000 | ' | ||
Finance income as a percentage of collections | 85.30% | 75.40% | ' | ||
Cost Recovery Portfolios | ' | ' | ' | ||
Consumer Receivables Acquired For Liquidation [Line Items] | ' | ' | ' | ||
Balance, beginning of period | 74,561,000 | 84,002,000 | ' | ||
Acquisitions of receivable portfolios | ' | 1,217,000 | ' | ||
Net cash collections from collection of consumer receivables acquired for liquidation | -17,522,000 | -20,179,000 | ' | ||
Cash collections represented by account sales of consumer receivables acquired for liquidation | -1,459,000 | ' | ' | ||
Transfer to cost recovery | ' | 6,484,000 | ' | ||
Impairments | -10,148,000 | ' | ' | ||
Finance income recognized | 4,397,000 | [1] | 3,037,000 | [2] | ' |
Balance, end of period | $49,829,000 | $74,561,000 | ' | ||
Finance income as a percentage of collections | 23.20% | 15.10% | ' | ||
[1] | Includes $33.2 million derived from fully amortized pools. Finance income recognized from account sales amounted to $2.0 million. | ||||
[2] | Includes $36.4 million derived from fully amortized pools. Finance income recognized from account sales amounted to $0.1 million. |
Changes_in_Balance_Sheet_Accou1
Changes in Balance Sheet Account of Consumer Receivables Acquired for Liquidation (Parenthetical) (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2011 |
Consumer Receivables Acquired For Liquidation [Line Items] | ' | ' | ' |
Fully amortized portfolios | $33.20 | $36.40 | ' |
Net collections on the interest method receivables | $2 | $0.10 | $0.20 |
Net_Cash_Collections_Applied_t
Net Cash Collections Applied to Principal for Interest Method Portfolios (Detail) (USD $) | Sep. 30, 2013 |
Cash, Cash Equivalents and Investments [Line Items] | ' |
30-Sep-14 | $4,291,000 |
30-Sep-15 | 1,051,000 |
30-Sep-16 | 813,000 |
30-Sep-17 | 636,000 |
30-Sep-18 | 536,000 |
30-Sep-19 | 463,000 |
30-Sep-20 | 281,000 |
Total | $8,071,000 |
Changes_in_Accretable_Yield_De
Changes in Accretable Yield (Detail) (USD $) | 12 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | |||
Consumer Receivables Acquired For Liquidation [Line Items] | ' | ' | ||
Balance at beginning of period | $2,086,000 | $7,473,000 | ||
Income recognized on finance receivables, net | -29,966,000 | -37,561,000 | ||
Additions representing expected revenue from purchases | 983,000 | 361,000 | ||
Transfer to cost recovery | ' | -1,840,000 | ||
Reclassifications from non-accretable difference | 28,013,000 | [1] | 33,653,000 | [1] |
Balance at end of period | $1,116,000 | $2,086,000 | ||
[1] | Includes portfolios that became zero based portfolios during the period, removal of zero basis portfolios from the accretable yield calculation and, other immaterial impairments and accretions based on the certain collection curves being extended. |
Collections_on_Gross_Basis_Les
Collections on Gross Basis Less Commissions and Direct Costs (Detail) (USD $) | 12 Months Ended | |||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2011 | ||||
Consumer Receivables Acquired For Liquidation [Line Items] | ' | ' | ' | |||
Gross collections | $85,512,000 | [1] | $108,487,000 | [1] | $129,688,000 | [1] |
Less: commissions and fees | 31,414,000 | [2] | 38,468,000 | [2] | 48,483,000 | [2] |
Net collections | $54,098,000 | $70,019,000 | $81,205,000 | |||
[1] | Gross collections include collections from third-party collection agencies and attorneys, collections from in-house efforts and collections represented by account sales. | |||||
[2] | Commissions and fees are the contractual commissions earned by third party collection agencies and attorneys, and direct costs associated with the collection effort, generally court costs. Includes a 3% fee charged by a servicer on gross collections in connection with the Portfolio Purchase. Such arrangement was consummated in December 2007. The fee is charged for asset location, skip tracing and ultimately suing debtors in connection with this portfolio purchase. |
Collections_on_Gross_Basis_Les1
Collections on Gross Basis Less Commissions and Direct Costs (Parenthetical) (Detail) | 12 Months Ended |
Sep. 30, 2013 | |
Consumer Receivables Acquired For Liquidation [Line Items] | ' |
Fee charged on portfolio purchase | 3.00% |
Furniture_and_Equipment_Detail
Furniture and Equipment (Detail) (USD $) | Sep. 30, 2013 | Sep. 30, 2012 |
Property, Plant and Equipment [Line Items] | ' | ' |
Total | $5,242,000 | $4,517,000 |
Less accumulated depreciation | 4,136,000 | 3,696,000 |
Furniture and equipment (net of accumulated depreciation of $4,136,000 in 2013 and $3,696,000 in 2012) | 1,106,000 | 821,000 |
Furniture | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Total | 310,000 | 310,000 |
Equipment | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Total | 3,622,000 | 3,470,000 |
Software | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Total | 1,211,000 | 638,000 |
Leasehold Improvements | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Total | $99,000 | $99,000 |
Furniture_and_Equipment_Additi
Furniture and Equipment - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2011 | |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Depreciation expenses | $440,000 | $380,000 | $250,000 |
Other_Investments_Additional_I
Other Investments - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | 18-May-12 | |
Other Investments [Line Items] | ' | ' | ' |
Earnings attributable to non-controlling interest | $406,000 | $31,000 | ' |
Revolving line of credit | ' | ' | 1,000,000 |
Bearing interest at prime rate, with initial term | ' | ' | 'Twenty-four months |
Company's investment in cases through BPCM | 1,600,000 | ' | ' |
Recognized revenue through BPCM | 34,000 | 165,000 | ' |
Pegasus Legal Funding LLC | ' | ' | ' |
Other Investments [Line Items] | ' | ' | ' |
Earnings in interest and fees | 6,400,000 | 1,600,000 | ' |
Company's investment in personal injury | 35,800,000 | 18,600,000 | ' |
Earnings attributable to non-controlling interest | 406,000 | 31,000 | ' |
Reserves for bad debts | $2,200,000 | ' | ' |
NonRecourse_Debt_Additional_In
Non-Recourse Debt - Additional Information (Detail) (USD $) | 1 Months Ended | 3 Months Ended | 12 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | ||||||||||||
Dec. 30, 2011 | Feb. 20, 2009 | Aug. 07, 2013 | Feb. 20, 2009 | Mar. 31, 2007 | Dec. 31, 2011 | Sep. 30, 2013 | Sep. 30, 2012 | Apr. 30, 2011 | Jan. 10, 2008 | 19-May-08 | Dec. 27, 2007 | Feb. 20, 2009 | 19-May-08 | Dec. 27, 2007 | Sep. 30, 2013 | Sep. 30, 2012 | Mar. 31, 2007 | Sep. 30, 2013 | Mar. 31, 2007 | |
Minimum | Minimum | Minimum | Maximum | Maximum | Fifth Amendment | Fifth Amendment | Idb Credit Facility | Receivables Financing Agreement | Receivables Financing Agreement | |||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Receivables Financing Agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $227,000,000 |
Portfolio Purchase had a purchase price | ' | ' | ' | ' | 300,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net payments recovered | ' | ' | ' | ' | 'Plus 20% of net payments after Palisades XVI recovers 150% of its purchase price plus cost of funds | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accrued interest | ' | ' | ' | ' | '170 basis points over LIBOR | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Receivables financing agreement, consecutive months | ' | ' | ' | '3 months | '3 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cross default minimum limit | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,500,000 | ' | ' |
Percentage of ownership in Palisades XVI | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Prepayment fund | ' | ' | 15,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
BMO right to receive from future net collections | ' | ' | 30.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate minimum repayment obligations 2014 | ' | ' | ' | ' | ' | ' | 4,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate minimum repayment obligations 2015 | ' | ' | ' | ' | ' | ' | 3,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate minimum repayment obligations 2016 | ' | ' | ' | ' | ' | ' | 1,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revolving debt level Liquidity | ' | ' | ' | ' | ' | ' | 35,800,000 | 61,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Applicable interest rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.43% | 3.73% | ' | ' | ' |
Average interest rate | ' | ' | ' | ' | ' | ' | 3.05% | 3.76% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Average debt obligation | ' | ' | ' | ' | ' | ' | 54,100,000 | 66,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization schedule of the loan | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '25 months | ' | ' | '31 months | ' | ' | ' | ' | ' |
Credit Facility to an administrative Fees | ' | ' | ' | ' | ' | ' | 75,000 | ' | ' | 475,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accrued interest (Prime Rate) | ' | ' | ' | ' | ' | 0.50% | ' | ' | ' | ' | 1.70% | ' | ' | 3.20% | ' | ' | ' | ' | ' | ' |
Receivable collection (plus interest and fees) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,000,000 | ' | ' | ' | ' | ' | ' | ' |
Reduction in outstanding balance loan | ' | ' | ' | ' | ' | ' | ' | ' | 25,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate of basis points over LIBOR | ' | 3.20% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Limited recourse, subordinated guaranty, secured by the assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8,000,000 | ' |
Amendment term | ' | ' | ' | ' | ' | ' | '5 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expiration date | ' | ' | ' | ' | ' | ' | 30-Apr-14 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Effective date of agreement | ' | ' | ' | ' | ' | ' | 14-Oct-10 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Monthly total payment | ' | ' | ' | ' | ' | ' | 750,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Company's guaranty credit enhancement | ' | ' | ' | ' | ' | ' | 8,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loan outstanding over the borrowing base | ' | ' | ' | ' | ' | ' | 105.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Principal Credit Facility | 20,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Term of Credit Facility | 23-Feb-13 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt default | ' | ' | ' | ' | ' | ' | $150,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Other_Liabilities_Detail
Other Liabilities (Detail) (USD $) | Sep. 30, 2013 | Sep. 30, 2012 |
Accrued Expenses and Other Current Liabilities [Line Items] | ' | ' |
Accounts payable and accrued expenses | $2,274,000 | $2,091,000 |
Accrued interest payable | 4,000 | 192,000 |
Other | 208,000 | 637,000 |
Total other liabilities | $2,486,000 | $2,920,000 |
Components_of_Provision_for_In
Components of Provision for Income Taxes (Detail) (USD $) | 12 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2011 | |
Current: | ' | ' | ' |
Federal | $561,000 | $3,437,000 | $2,418,000 |
State | 383,000 | ' | ' |
Federal true up | ' | 42,000 | 73,000 |
Current Income Tax Expense Total | 944,000 | 3,479,000 | 2,491,000 |
Deferred: | ' | ' | ' |
Federal | 212,000 | 1,813,000 | 2,963,000 |
State | 8,000 | 1,580,000 | 1,648,000 |
Deferred Income Tax Expense Total | 220,000 | 3,393,000 | 4,611,000 |
Provision for income taxes | $1,164,000 | $6,872,000 | $7,102,000 |
Corporate_Federal_Income_Tax_R
Corporate Federal Income Tax Returns Subject to Examination by IRS (Detail) | 12 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2011 | |
Investments, Owned, Federal Income Tax Note [Line Items] | ' | ' | ' |
Statutory federal income tax rate | 34.00% | 34.00% | 34.00% |
State income tax, net of federal benefit | 6.10% | 6.10% | 6.30% |
Deferred tax valuation allowance | ' | ' | 1.80% |
Permanent difference in municipal interest | -7.50% | ' | ' |
Permanent difference other | -0.70% | ' | ' |
Federal prior year provision to tax return difference | -2.10% | 0.20% | ' |
Other | -2.80% | 0.30% | -1.80% |
Effective income tax rate | 27.00% | 40.60% | 40.30% |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 12 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Y | ||
Income Tax [Line Items] | ' | ' |
Net deferred tax asset | 10,443,000 | 10,410,000 |
Deferred tax valuation allowance | 5,729,000 | 5,760,000 |
Carryforward period for state Income tax | '20 years | ' |
Decrease in deferred tax valuation allowance | 31,000 | ' |
Federal Income Tax | ' | ' |
Income Tax [Line Items] | ' | ' |
Operating loss carryforwards | 0 | ' |
Income tax returns subject to examination in years | 3 | ' |
State and Local Jurisdiction | ' | ' |
Income Tax [Line Items] | ' | ' |
Operating loss carryforwards, expiration date | 30-Sep-29 | ' |
Income tax returns subject to examination in years | ' | 4 |
Schedules_of_Net_Deferred_Tax_
Schedules of Net Deferred Tax Asset (Detail) (USD $) | Sep. 30, 2013 | Sep. 30, 2012 |
Summary Of Net Deferred Tax Assets [Line Items] | ' | ' |
Deferred and accrued revenue | ($414,000) | ($116,000) |
Impairments/bad debt reserves | 5,241,000 | 5,449,000 |
State tax net operating loss carryforward | 9,524,000 | 9,671,000 |
Stock based compensation | 2,133,000 | 1,737,000 |
Depreciation, amortization and other | -312,000 | -571,000 |
Deferred income taxes | 16,172,000 | 16,170,000 |
Deferred tax valuation allowance | -5,729,000 | -5,760,000 |
Deferred income taxes | $10,443,000 | $10,410,000 |
Commitments_and_Contingencies_1
Commitments and Contingencies - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2011 | |
Commitments Disclosure [Line Items] | ' | ' | ' |
Rent expense | $554,000 | $413,000 | $305,000 |
Schedule_of_Future_Minimum_Lea
Schedule of Future Minimum Lease Payments (Detail) (USD $) | Sep. 30, 2013 |
Leases Future Minimum Payments [Line Items] | ' |
2014 | $540,000 |
2015 | 505,000 |
2016 | 295,000 |
2017 | 248,000 |
Operating Leases, Future Minimum Payments Due, Total | $1,588,000 |
Concentrations_Additional_Info
Concentrations - Additional Information (Detail) (Supplier Concentration Risk) | 12 Months Ended |
Sep. 30, 2013 | |
Supplier Concentration Risk | ' |
Concentration Risk [Line Items] | ' |
Percentage of portfolios serviced by collection organizations | 28.00% |
Stock_Option_Plans_Additional_
Stock Option Plans - Additional Information (Detail) (USD $) | 1 Months Ended | 6 Months Ended | 12 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 3 Months Ended | 1 Months Ended | 1 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 3 Months Ended | 12 Months Ended | 12 Months Ended | |||||||||||||||||||||||||
Jun. 30, 2013 | Dec. 31, 2011 | Jun. 30, 2011 | Mar. 31, 2011 | Dec. 31, 2010 | Jun. 30, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2011 | Dec. 31, 2010 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2011 | Dec. 22, 2011 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2011 | Jun. 30, 2013 | Jun. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2010 | Dec. 13, 2011 | Dec. 13, 2011 | Dec. 31, 2010 | Dec. 31, 2011 | Dec. 31, 2010 | Sep. 30, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | |
Person | Installment | Person | Restricted stock to Chief Executive Officer | Restricted stock to Chief Executive Officer | Restricted stock to Chief Executive Officer | Employee Stock Option | Employee Stock Option | Employee Stock Option | Employee Stock Option | Employee Stock Option | Stock Options And Restricted Stock | Stock Options And Restricted Stock | Stock Options And Restricted Stock | Nonvested Option | Non Officer Employees | Non Officer Employees | Officer [Member] | Employee | Chief Executive Officer | Chief Executive Officer | Chief Financial Officer General Counsel And Senior Vice President | Chief Financial Officer General Counsel And Senior Vice President | Non Employee Director | Non Employee Independent Director | Nineteen Ninety Five Plan | Nineteen Ninety Five Plan | Two Thousand And Twelve Plan | Two Thousand And Twelve Plan | Two Thousand And Twelve Plan | Two Thousand And Twelve Plan | Equity Compensation Plan | Two Thousand And Two Plan | Two Thousand And Two Plan | |||||||||
Stock Option Granted Two | Common Stock | Employee | Common Stock | Common Stock | Common Stock | |||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common Stock authorized | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,840,000 | ' | ' | ' | 2,000,000 | 1,000,000 | ' | 1,000,000 |
Number of shares utilized | ' | 360,000 | 50,000 | 10,000 | 324,800 | ' | 210,000 | 160,000 | 360,000 | 384,800 | ' | ' | ' | ' | 54,800 | ' | ' | ' | 90,000 | ' | ' | ' | ' | 50,000 | ' | ' | ' | 150,000 | ' | ' | ' | ' | 30,000 | ' | ' | 50,000 | 262,321 | ' | ' | ' | ' | ' |
Eligible employees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 48 | ' | ' | ' | ' |
Number of shares available | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,687,679 | ' | ' | ' | ' |
Stock option awarded stock issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | ' | ' | ' | ' | 0 | ' | 0 |
Stock Option Plan expiration date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 14-Sep-05 | ' | ' | ' | ' | ' | 21-Mar-12 | 5-Mar-12 | ' |
Number of installment period of stock options vested | '3 years | ' | ' | ' | ' | ' | ' | '3 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock option awarded | ' | ' | ' | ' | ' | ' | 1,622,771 | ' | 1,499,471 | 1,294,271 | 922,039 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 75,000 | 65,000 | 20,000 | 60,000 | 150,000 | 30,000 | 30,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of non-employee directors | ' | 5 | ' | ' | ' | ' | ' | 6 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock options issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 102,321 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 60,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares vesting installments | ' | ' | ' | ' | ' | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock-based employee compensation | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $273,000 | $83,000 | $149,000 | ' | $1,683,000 | $1,538,000 | $1,906,000 | ' | $1,956,000 | $1,623,000 | $2,055,000 | $161,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unrecognized compensation cost | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 723,000 | ' | ' | ' | 2,003,000 | ' | ' | ' | 2,726,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unrecognized compensation cost, weighted average remaining period for recognition | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '2 years 2 months 12 days | ' | ' | ' | '1 year 9 months 18 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Intrinsic value of the stock options outstanding | ' | ' | ' | ' | ' | ' | 974,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Intrinsic value of the stock options exercised | ' | ' | ' | ' | ' | ' | 654,000 | ' | ' | ' | ' | ' | ' | ' | ' | 213,000 | 691,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of options exercised | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 339,000 | 1,299,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average remaining contractual life of exercisable options | ' | ' | ' | ' | ' | ' | '3 years 10 months 24 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of the stock options, vested | ' | ' | ' | ' | ' | ' | 1,289,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of the stock options, granted | ' | ' | ' | ' | ' | ' | 1,702,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from exercise of stock options | ' | ' | ' | ' | ' | ' | 125,000 | ' | 610,000 | 21,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of the stock options, granted | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 979,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of the stock options, vested | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $83,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Assumptions_Used_in_Option_Pri
Assumptions Used in Option Pricing Model (Detail) | 1 Months Ended | ||||||
Jun. 30, 2013 | Dec. 31, 2012 | Dec. 22, 2011 | Dec. 31, 2011 | Jun. 30, 2011 | Mar. 31, 2011 | Dec. 31, 2010 | |
Compensation Related Costs Share Based Payments Disclosure [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Risk-free interest rate | 0.10% | 0.16% | 0.08% | 0.08% | 0.09% | 0.10% | 0.17% |
Expected term (years) | '6 years 2 months 12 days | '6 years | '10 years | '10 years | '10 years | '10 years | '10 years |
Expected volatility | 99.70% | 101.00% | 95.70% | 103.90% | 105.40% | 106.20% | 106.90% |
Dividend yield | 0.92% | 1.67% | 1.03% | 1.03% | 0.95% | 0.94% | 0.98% |
Stock_Option_Plans_Detail
Stock Option Plans (Detail) (USD $) | 1 Months Ended | 12 Months Ended | ||||||
Dec. 31, 2011 | Jun. 30, 2011 | Mar. 31, 2011 | Dec. 31, 2010 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Sep. 30, 2011 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding options at the beginning of period, Shares | ' | ' | ' | ' | 1,499,471 | ' | 1,294,271 | 922,039 |
Options granted, Shares | 360,000 | 50,000 | 10,000 | 324,800 | 210,000 | 160,000 | 360,000 | 384,800 |
Options cancelled, Shares | ' | ' | ' | ' | -50,000 | ' | -15,300 | -6,300 |
Options exercised, Shares | ' | ' | ' | ' | -36,700 | ' | -139,500 | -6,268 |
Outstanding options at the end of period, Shares | ' | ' | ' | ' | 1,622,771 | ' | 1,499,471 | 1,294,271 |
Exercisable options at the end of period, Shares | ' | ' | ' | ' | 1,108,271 | ' | 1,000,904 | 992,607 |
Outstanding options at the beginning of period, Weighted Average Exercise Price | ' | ' | ' | ' | $11.27 | ' | $11.41 | $12.70 |
Options granted, Weighted Average Exercise Price | ' | ' | ' | ' | $9.36 | ' | $7.87 | $7.53 |
Options cancelled, Weighted Average Exercise Price | ' | ' | ' | ' | $7.77 | ' | $6 | $6.07 |
Options exercised, Weighted Average Exercise Price | ' | ' | ' | ' | $3.41 | ' | $4.36 | $3.35 |
Outstanding options at the end of period, Weighted Average Exercise Price | ' | ' | ' | ' | $11.31 | ' | $11.27 | $11.41 |
Exercisable options at the end of period, Weighted Average Exercise Price | ' | ' | ' | ' | $12.62 | ' | $12.93 | $12.41 |
Summary_of_Outstanding_Options
Summary of Outstanding Options (Detail) (USD $) | 12 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2011 | Sep. 30, 2010 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' | ' | ' | ' |
Options Outstanding, Number Outstanding | 1,622,771 | 1,499,471 | 1,294,271 | 922,039 |
Options Outstanding, Weighted Average Remaining Contractual Life (in Years) | '5 years 4 months 24 days | ' | ' | ' |
Options Outstanding, Weighted Average Exercise Price | $11.31 | $11.27 | $11.41 | $12.70 |
Options Exercisable, Number Exercisable | 1,108,271 | 1,000,904 | 992,607 | ' |
Options Exercisable, Weighted Average Exercise Price | $12.62 | $12.93 | $12.41 | ' |
$2.8751 - $ 5.7500 | ' | ' | ' | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' | ' | ' | ' |
Range of Exercise Price, Lower Range | $2.88 | ' | ' | ' |
Range of Exercise Price, Upper Range | $5.75 | ' | ' | ' |
Options Outstanding, Number Outstanding | 18,700 | ' | ' | ' |
Options Outstanding, Weighted Average Remaining Contractual Life (in Years) | '5 years 7 months 6 days | ' | ' | ' |
Options Outstanding, Weighted Average Exercise Price | $2.95 | ' | ' | ' |
Options Exercisable, Number Exercisable | 18,700 | ' | ' | ' |
Options Exercisable, Weighted Average Exercise Price | $2.95 | ' | ' | ' |
$5.7501 - $8.6250 | ' | ' | ' | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' | ' | ' | ' |
Range of Exercise Price, Lower Range | $5.75 | ' | ' | ' |
Range of Exercise Price, Upper Range | $8.63 | ' | ' | ' |
Options Outstanding, Number Outstanding | 790,800 | ' | ' | ' |
Options Outstanding, Weighted Average Remaining Contractual Life (in Years) | '7 years 4 months 24 days | ' | ' | ' |
Options Outstanding, Weighted Average Exercise Price | $7.81 | ' | ' | ' |
Options Exercisable, Number Exercisable | 486,300 | ' | ' | ' |
Options Exercisable, Weighted Average Exercise Price | $7.77 | ' | ' | ' |
$8.6251 - $14.3750 | ' | ' | ' | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' | ' | ' | ' |
Range of Exercise Price, Lower Range | $8.63 | ' | ' | ' |
Range of Exercise Price, Upper Range | $14.38 | ' | ' | ' |
Options Outstanding, Number Outstanding | 260,000 | ' | ' | ' |
Options Outstanding, Weighted Average Remaining Contractual Life (in Years) | '9 years | ' | ' | ' |
Options Outstanding, Weighted Average Exercise Price | $9.77 | ' | ' | ' |
Options Exercisable, Number Exercisable | 50,000 | ' | ' | ' |
Options Exercisable, Weighted Average Exercise Price | $11.50 | ' | ' | ' |
$14.3751 - $17.2500 | ' | ' | ' | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' | ' | ' | ' |
Range of Exercise Price, Lower Range | $14.38 | ' | ' | ' |
Range of Exercise Price, Upper Range | $17.25 | ' | ' | ' |
Options Outstanding, Number Outstanding | 198,611 | ' | ' | ' |
Options Outstanding, Weighted Average Remaining Contractual Life (in Years) | '1 month 6 days | ' | ' | ' |
Options Outstanding, Weighted Average Exercise Price | $14.88 | ' | ' | ' |
Options Exercisable, Number Exercisable | 198,611 | ' | ' | ' |
Options Exercisable, Weighted Average Exercise Price | $14.88 | ' | ' | ' |
$17.2501 - $20.1250 | ' | ' | ' | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' | ' | ' | ' |
Range of Exercise Price, Lower Range | $17.25 | ' | ' | ' |
Range of Exercise Price, Upper Range | $20.13 | ' | ' | ' |
Options Outstanding, Number Outstanding | 339,660 | ' | ' | ' |
Options Outstanding, Weighted Average Remaining Contractual Life (in Years) | '1 year 1 month 6 days | ' | ' | ' |
Options Outstanding, Weighted Average Exercise Price | $18.23 | ' | ' | ' |
Options Exercisable, Number Exercisable | 339,660 | ' | ' | ' |
Options Exercisable, Weighted Average Exercise Price | $18.23 | ' | ' | ' |
$25.8751 - $28.7500 | ' | ' | ' | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' | ' | ' | ' |
Range of Exercise Price, Lower Range | $25.88 | ' | ' | ' |
Range of Exercise Price, Upper Range | $28.75 | ' | ' | ' |
Options Outstanding, Number Outstanding | 15,000 | ' | ' | ' |
Options Outstanding, Weighted Average Remaining Contractual Life (in Years) | '3 years 2 months 12 days | ' | ' | ' |
Options Outstanding, Weighted Average Exercise Price | $28.75 | ' | ' | ' |
Options Exercisable, Number Exercisable | 15,000 | ' | ' | ' |
Options Exercisable, Weighted Average Exercise Price | $28.75 | ' | ' | ' |
Summary_of_Restricted_Stock_Tr
Summary of Restricted Stock Transactions (Detail) (USD $) | 12 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Unvested at the beginning of period, Shares | 10,922 | 21,843 |
Awards granted, Shares | 102,321 | ' |
Vested, Shares | -10,922 | -10,921 |
Forfeited, Shares | ' | ' |
Unvested at the end of period, Shares | 102,321 | 10,922 |
Unvested at the beginning of period, Weighted Average Grant Date Fair Value | $7.63 | $7.63 |
Awards granted, Weighted Average Grant Date Fair Value | $9.57 | $0 |
Vested, Weighted Average Grant Date Fair Value | $7.63 | $7.63 |
Forfeited, Weighted Average Grant Date Fair Value | $0 | $0 |
Unvested at the end of period, Weighted Average Grant Date Fair Value | $9.57 | $7.63 |
Stockholders_Equity_Additional
Stockholder's Equity - Additional Information (Detail) (USD $) | 1 Months Ended | 12 Months Ended | 1 Months Ended | ||||
Dec. 31, 2012 | Jun. 30, 2011 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2011 | Sep. 30, 2012 | Jun. 30, 2012 | |
Share Repurchase Plan | Additional Stock | ||||||
Stockholders Equity Note [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Dividend per share | $0.08 | ' | ' | $0.02 | ' | ' | ' |
Cash dividends | $1,030,000 | ' | ' | $1,111,000 | ' | ' | ' |
Dividend payment, date of record | 24-Dec-12 | ' | ' | ' | ' | ' | ' |
Dividend, date of payment | 28-Dec-12 | ' | ' | 1-Nov-12 | ' | ' | ' |
Dividends payable | ' | ' | ' | 260,000 | ' | ' | ' |
Treasury stock, shares | ' | 59,000 | ' | ' | ' | 885,000 | 1,000,000 |
Aggregate cost | ' | $457,000 | $1,579,000 | $16,156,000 | $70,000 | $7,900,000 | $9,400,000 |
Retirement_Plan_Additional_Inf
Retirement Plan - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2011 | |
Retirement Plans [Line Items] | ' | ' | ' |
Contributions by employee to retirement plan | $88,000 | $108,000 | $106,000 |
Fair_Value_of_Financial_Measur2
Fair Value of Financial Measurements (Detail) (USD $) | Sep. 30, 2013 | Sep. 30, 2012 |
Financial assets | ' | ' |
Available-for-sale investments | $58,035,000 | $58,712,000 |
Certificates of deposit | ' | 42,682,000 |
Financial liabilities | ' | ' |
Non-recourse debt | 35,760,000 | 61,463,000 |
Carrying Amount | Level 1 | ' | ' |
Financial assets | ' | ' |
Available-for-sale investments | 58,035,000 | 58,712,000 |
Certificates of deposit | ' | 42,682,000 |
Carrying Amount | Level 3 | ' | ' |
Financial assets | ' | ' |
Consumer receivables acquired for liquidation | 57,900,000 | 86,887,000 |
Financial liabilities | ' | ' |
Non-recourse debt | 35,760,000 | 61,463,000 |
Fair Value | Level 1 | ' | ' |
Financial assets | ' | ' |
Available-for-sale investments | 58,035,000 | 58,712,000 |
Certificates of deposit | ' | 42,682,000 |
Fair Value | Level 3 | ' | ' |
Financial assets | ' | ' |
Consumer receivables acquired for liquidation | 70,875,000 | 100,706,000 |
Financial liabilities | ' | ' |
Non-recourse debt | $27,000,000 | $61,463,000 |
Related_Party_Transactions_Add
Related Party Transactions - Additional Information (Detail) (USD $) | 12 Months Ended | 1 Months Ended |
Sep. 30, 2013 | Dec. 12, 2011 | |
Louis Piccolo | ||
Related Party Transaction [Line Items] | ' | ' |
Consulting agreement period | ' | '2 years |
Receive compensation | ' | $150,000 |
Bonus per new transaction | ' | 25,000 |
Options transactions | 30,000 | ' |
Expense recognized related consulting expenses | $279,000 | ' |
Summarized_Quarterly_Data_Deta
Summarized Quarterly Data (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2011 | |
Selected Quarterly Financial Data [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total revenue | $9,107,000 | $12,668,000 | $10,085,000 | $10,552,000 | $11,022,000 | $11,571,000 | $11,470,000 | $10,439,000 | $42,412,000 | $44,502,000 | $43,167,000 |
Income before income taxes | 2,901,000 | -4,543,000 | 1,560,000 | 4,390,000 | 2,624,000 | 5,136,000 | 4,181,000 | 4,999,000 | 4,308,000 | 16,940,000 | 17,623,000 |
Net income attributable to Asta Funding, Inc. | $2,005,000 | ($2,737,000) | $882,000 | $2,588,000 | $1,552,000 | $3,048,000 | $2,460,000 | $2,977,000 | $2,738,000 | $10,037,000 | $10,521,000 |
Basic net income per share attributable to Asta Funding, Inc. | $0.16 | ($0.21) | $0.07 | $0.20 | $0.12 | $0.22 | $0.17 | $0.20 | $0.21 | $0.71 | $0.72 |
Diluted net income per share attributable to Asta Funding, Inc. | $0.15 | ($0.21) | $0.07 | $0.20 | $0.12 | $0.21 | $0.17 | $0.20 | $0.21 | $0.70 | $0.71 |