The table below was prepared and faxed to Ms. Angela Connell, Senior Accountant, Division of Corporation Finance, Securities and Exchange Commission, on April 6, 2006, following a telephone conference call on April 5, 2006, between the Staff of the Commission and MicroFinancial Incorporated to discuss previously received Staff comments.
MicroFinancial Incorporated
Allowance for Credit Losses
January 1, 1996 - December 31, 2005
(Amounts in $Thousands) |
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| Year Ended December 31, | Jan-Feb | ||||||||||
| 1996 | 1997 | 1998 | 1999 | 2000 | 2001 | 2002 |
| 2003 | 2004 | 2005 | 2006 |
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Gross Originations | $143,200 | $129,064 | $153,819 | $223,446 | $236,763 | $155,308 | $111,829 |
| $3,429 | $920 | $7,296 | $2,139 |
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Ending Receivables | $247,633 | $258,230 | $280,875 | $362,721 | $452,885 | $438,723 | $367,173 |
| $194,898 | $69,181 | $33,004 | $32,602 |
Annual % Change |
| 4.28% | 8.77% | 29.14% | 24.86% | -3.13% | -16.31% |
| -46.92% | -64.50% | -52.29% |
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Receivables> 90 Days | Not available |
| $28,085 | $46,014 | $80,636 | $137,607 |
| $85,883 | $29,673 | $16,101 | $15,825 | |
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Allowance, Beginning | $15,952 | $23,826 | $26,319 | $24,850 | $41,719 | $40,924 | $45,026 |
| $69,294 | $43,011 | $14,963 | $8,714 |
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Provision | 19,822 | 21,713 | 19,075 | 37,836 | 36,029 | 54,092 | 88,948 | [1] | 59,758 | 47,918 | 10,468 | 722 |
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Charge-offs | (15,675) | (24,290) | (28,750) | (35,957) | (56,081) | (67,464) | (76,443) |
| (93,153) | (81,763) | (22,806) | (1,268) |
Recoveries | 3,727 | 5,070 | 8,206 | 14,990 | 19,257 | 17,474 | 11,763 |
| 7,112 | 5,797 | 6,089 | 1,005 |
Net Charge-offs | (11,948) | (19,220) | (20,544) | (20,967) | (36,824) | (49,990) | (64,680) |
| (86,041) | (75,966) | (16,717) | (263) |
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Allowance, Ending | $23,826 | $26,319 | $24,850 | $41,719 | $40,924 | $45,026 | $69,294 |
| $43,011 | $14,963 | $8,714 | $9,173 |
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Provision less Net Chg-offs | $7,874 | $2,493 | $(1,469) | $16,869 | $(795) | $4,102 | $24,268 |
| $(26,283) | $(28,048) | $(6,249) | $459 |
Allowance less Net Chg-offs | $4,004 | $4,606 | $5,775 | $3,883 | $4,895 | $(9,066) | $(19,654) |
| $(16,747) | $(32,955) | $(1,754) | $8,451 |
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Allowance : Ending Receivables | 9.62% | 10.19% | 8.85% | 11.50% | 9.04% | 10.26% | 18.87% |
| 22.07% | 21.63% | 26.40% | 28.14% |
Allowance : Receivables > 90 Days | N/A | N/A | N/A | 148.55% | 88.94% | 55.84% | 50.36% |
| 50.08% | 50.43% | 54.12% | 57.97% |
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Recoveries : Chargeoffs | 23.8% | 20.9% | 28.5% | 41.7% | 34.3% | 25.9% | 15.4% |
| 7.6% | 7.1% | 26.7% | 79.3% |
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Cumulative Gross Originations | N/A | $272,264 | $426,083 | $649,529 | $886,292 | $1,041,600 | $1,153,429 |
| $1,156,858 | $1,157,778 | $1,165,074 | $1,167,213 |
Cumulative Net Chg-offs | N/A | (31,168) | (51,712) | (72,679) | (109,503) | (159,493) | (224,173) |
| (310,214) | (386,180) | (402,897) | (403,160) |
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Cumulative Net Chg-offs : Cumulative Gross Originations | N/A | 11.45% | 12.14% | 11.19% | 12.36% | 15.31% | 19.44% |
| 26.82% | 33.36% | 34.58% | 34.54% |
[1] This provision includes an additional $35 million related to dealer receivables and delinquent accounts associated with the Tolling Agreement with the Attorneys General