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Finance Receivables | 12 Months Ended
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Mar. 31, 2015
Receivables [Abstract] |
Finance Receivables | 3. Finance Receivables Finance receivables consist of Contracts and Direct Loans, each of which comprise a portfolio segment. Each portfolio segment consists of smaller balance homogeneous loans which are collectively evaluated for impairment. The Company purchases individual Contracts from new and used automobile dealers in its markets. There is no relationship between the Company and the dealer with respect to a given Contract once the assignment of that Contract is complete. The dealer has no vested interest in the performance of any Contract the Company purchases. The Company charges-off receivables when an individual account has become more than 120 days contractually delinquent. In the event of repossession, the charge-off will occur in the month in which the vehicle was repossessed. Contracts included in finance receivables are detailed as follows as of fiscal years ended March 31:
|  | 2015 |  |  | 2014 |  |  | 2013 |
Indirect finance receivables, gross contract |  | $ | 447,042,854 |  |  | $ | 413,613,292 |  |  | $ | 386,940,093 |
Unearned interest |  |  | (136,895,592 | ) |  |  | (121,996,483 | ) |  |  | (111,121,493 | )
Indirect finance receivables, net of unearned interest |  |  | 310,147,262 |  |  |  | 291,616,809 |  |  |  | 275,818,600 |
Unearned dealer discounts |  |  | (17,779,690 | ) |  |  | (17,214,269 | ) |  |  | (16,415,169 | )
Indirect finance receivables, net of unearned interest and unearned dealer discounts |  |  | 292,367,572 |  |  |  | 274,402,540 |  |  |  | 259,403,431 |
Allowance for credit losses |  |  | (11,325,222 | ) |  |  | (12,889,082 | ) |  |  | (16,090,652 | )
Indirect finance receivables, net |  | $ | 281,042,350 |  |  | $ | 261,513,458 |  |  | $ | 243,312,779 |
The terms of the Contracts range from 12 to 72 months and bear a weighted average contractual interest rate of 22.86% and 23.08% as of March 31, 2015 and 2014, respectively. The following table sets forth a reconciliation of the changes in the allowance for credit losses on Contracts for the fiscal years ended March 31:
|  | 2015 |  |  | 2014 |  |  | 2013 |
Balance at beginning of year |  | $ | 12,889,082 |  |  | $ | 16,090,652 |  |  | $ | 19,499,208 |
Provision for credit losses |  |  | 20,008,166 |  |  |  | 14,693,841 |  |  |  | 13,252,382 |
Losses absorbed |  |  | (25,041,833 | ) |  |  | (21,690,010 | ) |  |  | (19,851,080 | )
Recoveries |  |  | 3,469,807 |  |  |  | 3,794,599 |  |  |  | 3,190,142 |
Balance at end of year |  | $ | 11,325,222 |  |  | $ | 12,889,082 |  |  | $ | 16,090,652 |
The Company purchases Contracts from automobile dealers at a negotiated price that is less than the original principal amount being financed by the purchaser of the automobile. The Contracts are predominately for used vehicles. As of March 31, 2015, the average model year of vehicles collateralizing the portfolio was 2007. The average loan to value ratio, which expresses the amount of the Contract as a percentage of the value of the automobile, is approximately 96%. The Company utilizes a static pool approach to track portfolio performance. If the allowance for credit losses is determined to be inadequate for a static pool, then an additional charge to income through the provision is used to maintain adequate reserves based on management’s evaluation of the risk inherent in the loan portfolio, the composition of the portfolio, and current economic conditions. Such evaluation, considers among other matters, the estimated net realizable value of the underlying collateral, economic conditions, historical loan loss experience, management’s estimate of probable credit losses and other factors that warrant recognition in providing for an adequate allowance for credit losses. Direct Loans are also included in finance receivables and are detailed as follows as of fiscal years ended March 31:
|  | 2015 |  |  | 2014 |  |  | 2013 |
Direct finance receivables, gross contract |  | $ | 10,931,904 |  |  | $ | 10,730,901 |  |  | $ | 8,781,637 |
Unearned interest |  |  | (2,367,404 | ) |  |  | (2,310,486 | ) |  |  | (1,800,698 | )
Direct finance receivables, net of unearned interest |  |  | 8,564,500 |  |  |  | 8,420,415 |  |  |  | 6,980,939 |
Allowance for credit losses |  |  | (702,790 | ) |  |  | (590,278 | ) |  |  | (467,917 | )
Direct finance receivables, net |  | $ | 7,861,710 |  |  | $ | 7,830,137 |  |  | $ | 6,513,022 |
The terms of the Direct Loans range from 6 to 48 months and bear a weighted average contractual interest rate of 26.14% and 26.32% as of March 31, 2015 and 2014, respectively. The following table sets forth a reconciliation of the changes in the allowance for credit losses on Direct Loans for the fiscal years ended March 31:
|  | 2015 |  |  | 2014 |  |  | 2013 |
Balance at beginning of year |  | $ | 590,278 |  |  | $ | 467,917 |  |  | $ | 492,184 |
Provision for credit losses |  |  | 362,364 |  |  |  | 285,375 |  |  |  | 139,493 |
Losses absorbed |  |  | (278,333 | ) |  |  | (192,156 | ) |  |  | (190,871 | )
Recoveries |  |  | 28,481 |  |  |  | 29,142 |  |  |  | 27,111 |
Balance at end of year |  | $ | 702,790 |  |  | $ | 590,278 |  |  | $ | 467,917 |
Direct Loans are loans originated directly between the Company and the consumer. These loans are typically for amounts ranging from $1,000 to $9,000 and are generally secured by a lien on an automobile, watercraft or other permissible tangible personal property. The majority of Direct Loans are originated with current or former customers under the Company’s automobile financing program. The typical Direct Loan represents a significantly better credit risk than Contracts due to the customer’s historical payment history with the Company; however, the underlying collateral is less valuable. In deciding whether or not to make a loan, the Company considers the individual’s credit history, job stability, income and impressions created during a personal interview with a Company loan officer. Additionally, because most of the Direct Loans made by the Company to date have been made to borrowers under Contracts previously purchased by the Company, the payment history of the borrower under the Contract is a significant factor in making the loan decision. As of March 31, 2015, loans made by the Company pursuant to its Direct Loan program constituted approximately 2% of the aggregate principal amount of the Company’s loan portfolio. Changes in the allowance for credit losses for both Contracts and Direct Loans were driven by current economic conditions and credit loss trends over several reporting periods which are useful in estimating future losses and overall portfolio performance. A performing account is defined as an account that is less than 61 days past due. A non-performing account is defined as an account that is contractually delinquent for 61 days or more or is a Chapter 13 bankrupt account, and the accrual of interest income is suspended. When an account is 120 days contractually delinquent, the account is written off. Upon notification of a bankruptcy, an account is monitored for collection with other Chapter 13 bankrupt accounts. In the event the debtors balance has been reduced by the bankruptcy court, the Company will record a loss equal to the amount of principal balance reduction. The remaining balance will be reduced as payments are received by the bankruptcy court. In the event an account is dismissed from bankruptcy, the Company will decide, based on several factors, to begin repossession proceedings or to allow the customer to begin making regularly scheduled payments. The following table is an assessment of the credit quality by creditworthiness as of March 31, and excludes Chapter 13 Bankrupt accounts.
|  | 2015 |  |  | 2014 |
|  | Contracts |  |  | Direct Loans |  |  | Contracts |  |  | Direct Loans |
Performing accounts |  | $ | 438,317,584 |  |  | $ | 10,855,209 |  |  | $ | 405,691,402 |  |  | $ | 10,656,685 |
Non-performing accounts |  |  | 4,765,425 |  |  |  | 56,636 |  |  |  | 4,840,819 |  |  |  | 47,860 |
Total |  | $ | 443,083,009 |  |  | $ | 10,911,845 |  |  | $ | 410,532,221 |  |  | $ | 10,704,545 |
Chapter 13 bankrupt accounts, net of unearned interest |  |  | 3,959,845 |  |  |  | 20,059 |  |  |  | 3,081,071 |  |  |  | 26,356 |
Finance receivables, gross contract |  | $ | 447,042,854 |  |  | $ | 10,931,904 |  |  | $ | 413,613,292 |  |  | $ | 10,730,901 |
The following tables present certain information regarding the delinquency rates experienced by the Company with respect to Contracts and Direct Loans, excluding any Chapter 13 bankrupt accounts:
Contracts |  | Gross Balance Outstanding |  |  | 30 – 59 days |  |  | 60 – 89 days |  |  | 90 + days |  |  | Total |
March 31, 2015 |  | $ | 443,083,009 |  |  | $ | 13,694,370 |  |  | $ | 3,435,332 |  |  | $ | 1,330,093 |  |  | $ | 18,459,795 |
|  |  |  |  |  |  | 3.09 | % |  |  | 0.78 | % |  |  | 0.30 | % |  |  | 4.17 | %
March 31, 2014 |  | $ | 410,532,221 |  |  | $ | 11,713,021 |  |  | $ | 2,944,228 |  |  | $ | 1,896,591 |  |  | $ | 16,553,840 |
|  |  |  |  |  |  | 2.85 | % |  |  | 0.72 | % |  |  | 0.46 | % |  |  | 4.03 | %
March 31, 2013 |  | $ | 386,324,595 |  |  | $ | 10,421,500 |  |  | $ | 2,631,617 |  |  | $ | 1,188,160 |  |  | $ | 14,241,277 |
|  |  |  |  |  |  | 2.70 | % |  |  | 0.68 | % |  |  | 0.31 | % |  |  | 3.69 | %
Direct Loans |  | Gross Balance Outstanding |  |  | 30 – 59 days |  |  | 60 – 89 days |  |  | 90 + days |  |  | Total |
March 31, 2015 |  | $ | 10,911,845 |  |  | $ | 122,718 |  |  | $ | 41,984 |  |  | $ | 14,652 |  |  | $ | 179,354 |
|  |  |  |  |  |  | 1.12 | % |  |  | 0.39 | % |  |  | 0.13 | % |  |  | 1.64 | %
March 31, 2014 |  | $ | 10,704,545 |  |  | $ | 143,624 |  |  | $ | 25,345 |  |  | $ | 22,515 |  |  | $ | 191,484 |
|  |  |  |  |  |  | 1.34 | % |  |  | 0.23 | % |  |  | 0.21 | % |  |  | 1.78 | %
March 31, 2013 |  | $ | 8,781,637 |  |  | $ | 72,364 |  |  | $ | 21,509 |  |  | $ | 13,790 |  |  | $ | 107,663 |
|  |  |  |  |  |  | 0.82 | % |  |  | 0.25 | % |  |  | 0.16 | % |  |  | 1.23 | %

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- Definition The entire disclosure for financing receivables. Examples of financing receivables include, but are not limited to, loans, trade accounts receivables, notes receivable, credit cards, and receivables relating to a lessor's right(s) to payment(s) from a lease other than an operating lease that is recognized as assets. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -Section 55 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=32702940&loc=SL6953791-111525 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=35738203&loc=d3e4975-111524 + Details
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