Cash America 2015 Annual Report Download - page 102

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4. Credit Quality Information on Pawn Loans
In its pawn loan portfolio, the Company monitors the type and adequacy of collateral compared to historical
forfeiture rates, average loan amounts and gross profit margins, among other factors. If a pawn loan defaults, the
Company relies on the disposition of forfeited merchandise to recover the principal amount of an unpaid pawn loan,
plus a yield on the investment, because the Company’s pawn loans are non-recourse against the customer. In
addition, the customer’s creditworthiness does not affect the Company’s financial position or results of operations.
Generally, forfeited merchandise has historically sold for an amount in excess of the carrying value of the
merchandise. Goods pledged to secure pawn loans are tangible personal property items such as jewelry, tools,
televisions and other electronics, musical instruments and other miscellaneous items.
A pawn loan is considered delinquent if the customer does not repay or, where allowed by law, renew or
extend the loan on or prior to its contractual maturity date plus any applicable grace period. Therefore, the balance
of “Pawn loans” in the consolidated balance sheets includes delinquent loans that are in the process of being moved
to merchandise held for disposition but have not yet been transferred. Pawn loan fees and service charges do not
accrue on delinquent pawn loans. When a pawn loan is considered delinquent, any accrued pawn loan fees and
service charges are reversed, and no additional pawn loan fees and service charges are accrued. AsofDecember31,
2015 and 2014, the Company had current pawn loans outstanding of $241.6 million and $244.1 million,
respectively, and delinquent pawn loans outstanding of $7.1 million and $8.0 million, respectively.
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
98