Cash America 2014 Annual Report Download - page 116

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CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
101
5. Credit Quality Information on Pawn Loans
The Company manages its pawn loan portfolio by monitoring the type and adequacy of collateral compared
to historical gross profit margins. If a pawn loan defaults, the Company relies on the disposition of pawned property
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 cost of goods sold (which is the cost basis in the loan or the amount paid for purchased
merchandise) or fair value. 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. 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, 2014
and 2013, the Company had current pawn loans outstanding of $244.1 million and $251.9 million, respectively, and
delinquent pawn loans outstanding of $8.0 million and $9.2 million, respectively.
6. Consumer Loans, Credit Quality Information on Consumer Loans, Allowance and Liability for
Estimated Losses on Consumer Loans and Guarantees of Consumer Loans
The components of Company-owned consumer loan portfolio receivables at December 31, 2014 and 2013
were as follows (dollars in thousands):
As of December 31, 2014
Short-term
Loans
Installment
Loans
Tot al
Current loans $38,492 $3,486 $41,978
Delinquent loans 4,462 2,575
7,037
Total consumer loans, gross 42,954 6,061
49,015
Less: Allowance for losses
(2,736
)
(1,426
)
(4,162
)
Consumer loans, net $40,218 $4,635 $44,853
As of December 31, 2013
Short-term
Loans
Installment
Loans
Tot al
Current loans $43,375 $6,970 $50,345
Total delinquent loans 6,481 2,817
9,298
Total consumer loans, gross 49,856 9,787
59,643
Less: Allowance for losses
(3,960
)
(951
)
(4,911
)
Consumer loans, net $45,896 $8,836 $54,732