Note 2. Revision of Financial Statements
During 2013, the Company completed the implementation of internal controls over financial reporting as required by the Sarbanes-Oxley Act of 2002. In connection with that work and as reported in November 2013, the Company discovered that its accounting for state franchise taxes was incorrect. Further, as the Company completed the close of its year-end accounting, it identified other errors related to interest income, insurance premiums, compensated absences, and income taxes. Collectively, the errors result in an overstatement of net income for the years ended December 31, 2010 through December 31, 2012. The Company considered both the quantitative and qualitative factors within the provisions of the Securities and Exchange Commission Staff Accounting Bulletin No. 99, Materiality, and Staff Accounting Bulletin No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements. Based on this evaluation, the Company concluded that the errors were immaterial to the previously issued financial statements and those financial statements can continue to be relied upon. Therefore, the Company has made immaterial corrections to its previously filed financial statements included in this Annual Report on Form 10-K filing to reflect the corrections in the proper period. Future filings that include prior periods will be revised, as needed, when filed.
The effect of the immaterial revisions in the consolidated financial statements as of and for the years ended December 31, 2011 and 2012 is as follows:
| Consolidated Statements
of Income Years Ended December 31, |
||||||||||||||||||||||||
| 2012 | 2011 | |||||||||||||||||||||||
| As Reported(1) |
Revised | Change | As Reported(1) |
Revised | Change | |||||||||||||||||||
|
Interest and fee income |
$ | 119,235 | $ | 119,025 | $ | (210 | ) | $ | 91,303 | $ | 91,513 | $ | 210 | |||||||||||
|
Insurance income, net |
10,820 | 10,681 | (139 | ) | 9,247 | 9,155 | (92 | ) | ||||||||||||||||
|
Total revenue |
136,046 | 135,697 | (349 | ) | 105,219 | 105,337 | 118 | |||||||||||||||||
|
Personnel |
33,453 | 33,492 | 39 | 25,549 | 25,679 | 130 | ||||||||||||||||||
|
Other |
10,413 | 10,644 | 231 | 6,502 | 6,573 | 71 | ||||||||||||||||||
|
Total expenses |
96,114 | 96,384 | 270 | 71,806 | 72,007 | 201 | ||||||||||||||||||
|
Income before income taxes |
39,932 | 39,313 | (619 | ) | 33,413 | 33,330 | (83 | ) | ||||||||||||||||
|
Income taxes |
14,565 | 14,561 | (4 | ) | 12,169 | 12,290 | 121 | |||||||||||||||||
|
Net income |
$ | 25,367 | $ | 24,752 | $ | (615 | ) | $ | 21,244 | $ | 21,040 | $ | (204 | ) | ||||||||||
|
Net income per common share: |
||||||||||||||||||||||||
|
Basic |
$ | 2.17 | $ | 2.12 | $ | (0.05 | ) | $ | 2.28 | $ | 2.25 | $ | (0.03 | ) | ||||||||||
|
Diluted |
$ | 2.12 | $ | 2.07 | $ | (0.05 | ) | $ | 2.21 | $ | 2.19 | $ | (0.03 | ) | ||||||||||
| Consolidated Balance
Sheet December 31, 2012 |
||||||||||||
| As Reported(1) |
Revised | Change | ||||||||||
|
Less unearned finance charges, insurance premiums, and commissions |
$ | (92,024 | ) | $ | (92,376 | ) | $ | (352 | ) | |||
|
Finance receivables |
439,826 | 439,474 | (352 | ) | ||||||||
|
Net finance receivables |
416,210 | 415,858 | (352 | ) | ||||||||
|
Other assets |
7,483 | 7,361 | (122 | ) | ||||||||
|
Total assets |
434,991 | 434,517 | (474 | ) | ||||||||
|
Accounts payable and accrued expenses |
6,096 | 6,987 | 891 | |||||||||
|
Total liabilities |
304,422 | 305,313 | 891 | |||||||||
|
Retained earnings |
49,162 | 47,797 | (1,365 | ) | ||||||||
|
Total stockholders’ equity |
130,569 | 129,204 | (1,365 | ) | ||||||||
|
Total liabilities and stockholders’ equity |
$ | 434,991 | $ | 434,517 | $ | (474 | ) | |||||
| Consolidated Statements
of Stockholders’ Equity |
||||||||||||
| As Reported(1) |
Revised | Change | ||||||||||
|
December 31, 2010 Retained earnings |
$ | 2,551 | $ | 2,005 | $ | (546 | ) | |||||
|
Net income |
21,244 | 21,040 | (204 | ) | ||||||||
|
December 31, 2011 Retained earnings |
23,795 | 23,045 | (750 | ) | ||||||||
|
Net income |
25,367 | 24,752 | (615 | ) | ||||||||
|
December 31, 2012 Retained earnings |
49,162 | 47,797 | (1,365 | ) | ||||||||
| Consolidated Statements
of Cash Flows Years Ended December 31, |
||||||||||||||||||||||||
| 2012 | 2011 | |||||||||||||||||||||||
| As Reported(1) |
Revised | Change | As Reported(1) |
Revised | Change | |||||||||||||||||||
|
Net income |
$ | 25,367 | $ | 24,752 | $ | (615 | ) | $ | 21,244 | $ | 21,040 | $ | (204 | ) | ||||||||||
|
(Increase) decrease in other assets |
(1,417 | ) | (1,295 | ) | 122 | — | — | — | ||||||||||||||||
|
Increase (decrease) in other liabilities |
(1,351 | ) | (1,048 | ) | 303 | (521 | ) | (169 | ) | 352 | ||||||||||||||
|
Net cash provided by operating activities |
57,912 | 57,722 | (190 | ) | 41,345 | 41,493 | 148 | |||||||||||||||||
|
Net origination of finance receivables |
(127,842 | ) | (127,652 | ) | 190 | (73,512 | ) | (73,660 | ) | (148 | ) | |||||||||||||
|
Net cash used in investing activities |
(159,201 | ) | (159,011 | ) | 190 | (79,074 | ) | (79,222 | ) | (148 | ) | |||||||||||||
| (1) | Certain prior period amounts have been reclassified to conform to the current presentation. Such reclassifications had no impact on previously reported net income or stockholders’ equity. |