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83
CABELA’S INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands Except Share and Per Share Amounts)
4. CREDIT CARD LOANS AND ALLOWANCE FOR LOAN LOSSES
The following table reflects the composition of the credit card loans at the years ended:
2013 2012
Restricted credit card loans of the Trust (restricted for repayment of secured
obligations of the Trust) $3,956,230 $ 3,523,133
Unrestricted credit card loans 29,619 34,356
Total credit card loans 3,985,849 3,557,489
Allowance for loan losses (53,110) (65,600)
Deferred credit card origination costs 5,891 5,583
Credit card loans, net $ 3,938,630 $ 3,497,472
Allowance for Loan Losses:
The following table reflects the activity in the allowance for loan losses by credit card segment for the
years ended:
2013 2012
Credit Card
Loans
Restructured
Credit Card
Loans
Total
Credit Card
Loans Credit Card
Loans
Restructured
Credit Card
Loans
Total
Credit Card
Loans
Balance, beginning of year $ 42,600 $ 23,000 $ 65,600 $ 44,350 $ 29,000 $ 73,350
Provision for loan losses 47,809 (4,586) 43,223 40,963 1,797 42,760
Charge-offs (58,736) (14,223) (72,959) (56,122) (12,712) (68,834)
Recoveries 12,987 4,259 17,246 13,409 4,915 18,324
Net charge-offs (45,749) (9,964) (55,713) (42,713) (7,797) (50,510)
Balance, end of year $ 44,660 $ 8,450 $ 53,110 $ 42,600 $ 23,000 $ 65,600
The restructured credit card loans decreased to $42,967 at December 28, 2013, compared to $53,700 at
December 29, 2012. As a result of these declining loan balances and improvements in recoveries, the allowance
for loan losses on the restructured credit card loans segment was decreased by $7,000 during 2013. The remaining
decrease of $7,550 in the allowance for loan losses on the restructured credit card loans segment was based
on analysis relating to historical trends in actual charge-offs, and additional performance data, resulting in an
allowance of $8,450 at December 28, 2013, compared to $23,000 at December 29, 2012.
Credit Quality Indicators, Delinquent, and Non-Accrual Loans:
The Financial Services segment segregates the loan portfolio into loans that have been restructured and
other credit card loans in order to facilitate the estimation of the losses inherent in the portfolio as of the reporting
date. The Financial Services segment uses the scores of Fair Isaac Corporation (“FICO”), a widely-used tool for
assessing an individual’s credit rating, as the primary credit quality indicator. The FICO score is an indicator of
quality, with the risk of loss increasing as an individual’s FICO score decreases.
The Financial Services segment considers a loan to be delinquent if the minimum payment is not received
by the payment due date. The aging method is based on the number of completed billing cycles during which a
customer has failed to make a required payment.