Credit Quality Information On Pawn Loans

9 Months Ended

Sep. 30, 2011

Credit Quality Information On Pawn Loans [Abstract]

Credit Quality Information On Pawn Loans

3. Credit Quality Information on Pawn Loans

The Company manages the pawn loan portfolio by monitoring the type and adequacy of collateral compared to historical gross profit margins. If a pawn loan defaults, the Company must rely on the disposition of pawned property to recover the principal amount of an unpaid pawn loan, plus a yield on the investment, because pawn loans are non-recourse against the customer. As a result, the customer's creditworthiness is not a significant factor in the loan decision, and a decision to redeem pawned property does not affect the customer's personal credit status. In addition, the customer's creditworthiness does not affect the Company's financial position or results of operations, because generally, forfeited merchandise has historically sold for an amount in excess of the cost of goods sold (which is the lower of the cash amount loaned or market 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 nonperforming if the customer does not make a payment in accordance with the contractual requirements. Any accrued pawn loan fees and service charges are reversed on nonperforming loans. As of September 30, 2011 and 2010, and December 31, 2010, the Company had performing pawn loans outstanding of $238.4 million, $191.1 million, and $213.5 million, respectively, and nonperforming pawn loans outstanding of $6.0 million, $5.2 million, and $4.9 million, respectively.