Conn’s originations seem to exceed the amount of money lent to its customers.
In FY2014, Conn’s originations were $1,075M.
It provided $757.2M in in-house financing, including down payments and excluding insurance.
The ratio between originations versus in-house financing was ~142%.
One possible explanation for this is that restructurings, refinancings, and/or re-agings of old debt are being counted as new originations. If so, such behaviour could cause loan performance data to be misleading.
Another possible explanation is that the origination amount includes interest payments along with principal payments. However, not all of Conn’s historical loans are installment loans. Conn’s used to offer charge accounts until Feb 29 2012. Applying an unconventional definition of what a “balance” is should require an explanation as to how charge accounts (and their promotional interest rates) are treated.
*Origination amount data is from page 2 of Conn’s Combined Portfolio Summary by Quarter. In-house financing data is calculated from Conn’s 10-Ks. There may be errors in my calculations.
**For a more precise picture, you can take into account the effect of downpayments, insurance, and sales tax. I assume that those items do not materially affect the big picture.
***Conn’s re-aging policies, charge-off policies, and troubled debt restructuring (TDR) accounting have changed over the years.
*Disclosure: Short CONN via put options.