0000108385us-gaap:ConsumerPortfolioSegmentMemberus-gaap:PerformingFinancingReceivableMemberwrld:ContractualBasisMember2021-03-31

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, ~~2020~~2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT of 1934

For the transition period from ______________ to ______________

Commission File Number: 000-19599

WORLD ACCEPTANCE CORPORATION

(Exact name of registrant as specified in its charter.)


South Carolina						57-0425114
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification Number)


104 S Main Street
Greenville,	South Carolina	29601
(Address of principal executive offices)
(Zip Code)


(864)			298-9800
(registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, no par value	WRLD	The NASDAQ Stock Market LLC (NASDAQ Global Select Market)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for shorter period than the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated filer

☒☐

Accelerated filer

☐☒

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

The number of outstanding shares of the issuer’s common stock, no par value, ~~common stock~~ as of October ~~30, 2020~~29, 2021 was ~~6,872,921.~~6,699,409.

WORLD ACCEPTANCE CORPORATION

FORM 10-Q

TABLE OF CONTENTS


Item No.	Item No.	Contents	Page	Item No.	Contents	Page
		GLOSSARY OF DEFINED TERMS	4		GLOSSARY OF DEFINED TERMS	4

		PART I - FINANCIAL INFORMATION			PART I - FINANCIAL INFORMATION
1.	1.	Consolidated Financial Statements (unaudited):	5	1.	Consolidated Financial Statements (unaudited):	5
		Consolidated Balance Sheets as of September 30, 2020 and March 31, 2020	5		Consolidated Balance Sheets as of September 30, 2021 and March 31, 2021	5
		Consolidated Statements of Operations for the three and six months ended September 30, 2020 and September 30, 2019	6		Consolidated Statements of Operations for the three and six months ended September 30, 2021 and September 30, 2020	7

		Consolidated Statements of Shareholders' Equity for the three and six months ended September 30, 2020 and September 30, 2019	7		Consolidated Statements of Shareholders' Equity for the three and six months ended September 30, 2021 and September 30, 2020	8
		Consolidated Statements of Cash Flows for the six months ended September 30, 2020 and September 30, 2019	9		Consolidated Statements of Cash Flows for the six months ended September 30, 2021 and September 30, 2020	10
		Notes to Consolidated Financial Statements	10		Notes to Consolidated Financial Statements	12
2.	2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	29	2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	32
3.	3.	Quantitative and Qualitative Disclosures about Market Risk	39	3.	Quantitative and Qualitative Disclosures about Market Risk	41
4.	4.	Controls and Procedures	39	4.	Controls and Procedures	41

		PART II - OTHER INFORMATION			PART II - OTHER INFORMATION
1.	1.	Legal Proceedings	40	1.	Legal Proceedings	42
1A.	1A.	Risk Factors	40	1A.	Risk Factors	42
2.	2.	Unregistered Sales of Equity Securities and Use of Proceeds	40	2.	Unregistered Sales of Equity Securities and Use of Proceeds	42
3.	3.	Defaults Upon Senior Securities	41	3.	Defaults Upon Senior Securities	42
4.	4.	Mine Safety Disclosures	41	4.	Mine Safety Disclosures	42
5.	5.	Other Information	41	5.	Other Information	42
6.	6.	Exhibits	41	6.	Exhibits	42

		EXHIBIT INDEX	42		EXHIBIT INDEX	43

		SIGNATURES	43		SIGNATURES	44

Introductory Note: As used herein, the "Company," "we," "our," "us," or similar formulations include World Acceptance Corporation and each of its subsidiaries, unless otherwise expressly noted or the context otherwise requires that it include only World Acceptance Corporation. All references in this report to "fiscal ~~2021"~~2022" are to the Company’s fiscal year ending March 31, ~~2021;~~2022; all references in this report to "fiscal ~~2020"~~2021" are to the Company's fiscal year ended March 31, ~~2020;~~2021; and all references to "fiscal ~~2019"~~2020" are to the Company’s fiscal year ended March 31, ~~2019.~~2020.

Table of Contents

GLOSSARY OF DEFINED TERMS

The following terms may be used throughout this Report, including consolidated financial statements and related notes.


Term			Definition
~~ACL~~ASC			~~Allowance for Credit Losses~~Accounting Standards Codification
ASU			Accounting Standards Update
CECL			Current Expected Credit Loss
CEO			Chief Executive Officer
CFO			Chief Financial Officer
CFPB			U.S. Consumer Financial Protection Bureau
Compensation Committee			Compensation and Stock Option Committee
Customer Tenure			The number of years since a customer was first serviced by the Company
DOJ			U.S. Department of Justice
EBITDA			Earnings before interest, taxes, depreciation, and amortization
ERISA			Employee Retirement Income Security Act
Exchange Act			Securities Exchange Act of 1934, as amended
FASB			Financial Accounting Standards Board
~~FCPA~~FICO			~~U.S. Foreign Corrupt Practices Act of 1977, as amended~~the Fair Isaac Corporation
G&A			General and administrative
GAAP			U.S. generally accepted accounting principles
~~IRC~~			~~Internal Revenue Code of 1986, as amended~~
IRS			U.S. Internal Revenue Service
LIBOR			London Interbank Offered Rate
Option Measurement Period			The 6.5 year performance period beginning on September 30, 2018 and ending on March 31, 2025 over which the Performance Options are eligible to vest, following certification by the Compensation Committee of achievement
PCD			Purchased Assets with Credit Deterioration
Performance Options			Performance-based stock options
Performance Share Measurement Period			The 6.5 year performance period beginning on September 30, 2018 and ending on March 31, 2025 over which the Performance Shares are eligible to vest, following certification by the Compensation Committee of achievement
Performance Shares			Service- and performance-based restricted stock awards
~~Purchasers~~			~~Jointly, Astro Wealth S.A. de C.V. and Astro Assets S.A. de C.V.~~
Rehab Rate			Percentage of 91 days or more delinquent that do not charge off
Restricted Stock			Service-based restricted stock awards
SEC			U.S. Securities and Exchange Commission
Service Options			Service-based stock options
TAL			Tax Advance Loan
~~WAC de Mexico~~			~~WAC de México, S.A. de C.V., SOFOM, E.N.R., a former subsidiary of World Acceptance Corporation~~

Table of Contents

PART I. FINANCIAL INFORMATION

WORLD ACCEPTANCE CORPORATION

AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

September 30, 2020 March 31, 2020
ASSETS
Cash and cash equivalents $ 13,987,906 $ 11,618,922
Gross loans receivable 1,109,366,487 1,209,871,366
Less:
Unearned interest, insurance and fees (289,700,225) (308,980,724)
Allowance for credit losses (109,601,359) (96,487,856)
Loans receivable, net 710,064,903 804,402,786
Right-of-use asset (Note 6) 95,335,005 101,686,918
Property and equipment, net 25,910,292 24,761,108
Deferred income taxes, net 29,425,306 23,257,985
Other assets, net 26,122,886 28,547,950
Goodwill 7,370,791 7,370,791
Intangible assets, net 22,930,322 24,448,477
Assets held for sale (Note 2) 1,143,528 3,991,498
Total assets $ 932,290,939 $ 1,030,086,435

LIABILITIES & SHAREHOLDERS' EQUITY
Liabilities:
Senior notes payable $ 424,900,000 $ 451,100,000
Income taxes payable 4,723,017 4,965,302
Lease liability (Note 6) 96,481,607 102,759,386
Accounts payable and accrued expenses 38,911,164 59,298,680
Total liabilities 565,015,788 618,123,368
Commitments and contingencies (Notes 6 and 12)
Shareholders' equity:
Preferred stock, no par value Authorized 5,000,000, no shares issued or outstanding 0 0
Common stock, no par value Authorized 95,000,000 shares; issued and outstanding 7,002,080 and 7,807,834 shares at September 30, 2020 and March 31, 2020, respectively 0 0
Additional paid-in capital 237,547,566 227,214,577
Retained earnings 129,727,585 184,748,490
Total shareholders' equity 367,275,151 411,963,067
Total liabilities and shareholders' equity $ 932,290,939 $ 1,030,086,435

~~See accompanying notes to consolidated financial statements.~~


	September 30, 2021		March 31, 2021
ASSETS
Cash and cash equivalents	$	16,886,215	$	15,746,454
Gross loans receivable	1,394,827,136		1,104,746,261
Less:
Unearned interest, insurance and fees	(370,017,101)		(279,364,584)
Allowance for credit losses	(114,660,240)		(91,722,288)
Loans receivable, net	910,149,795		733,659,389
Operating lease right‐of‐use assets, net (Note 6)	88,197,277		90,055,572
Finance lease right‐of‐use assets, net (Note 6)	810,101		1,013,901
Property and equipment, net	25,066,530		25,326,136
Deferred income taxes, net	34,248,014		24,992,742
Other assets, net	35,544,370		31,423,134
Goodwill	7,370,791		7,370,791
Intangible assets, net	22,306,060		23,537,517
Assets held for sale (Note 2)	—		1,143,528

Total assets	$	1,140,579,153	$	954,269,164

LIABILITIES & SHAREHOLDERS' EQUITY

Liabilities:
Senior notes payable	$	275,705,753	$	405,007,500
Senior unsecured notes payable, net	294,897,327		—
Income taxes payable	8,258,170		11,575,861
Operating lease liability (Note 6)	89,754,406		91,132,722
Finance lease liability (Note 6)	283,632		585,353
Accounts payable and accrued expenses	52,672,524		41,040,287

Total liabilities	721,571,812		549,341,723

Commitments and contingencies (Notes 6 and 12)	0		0

Shareholders' equity:
Preferred stock, no par value Authorized 5,000,000, no shares issued or outstanding	—		—
Common stock, no par value Authorized 95,000,000 shares; issued and outstanding 6,724,140 and 6,805,294 shares at September 30, 2021 and March 31, 2021, respectively	—		—
Additional paid-in capital	272,572,177		255,590,674
Retained earnings	146,435,164		149,336,767

Total shareholders' equity	419,007,341		404,927,441

Total liabilities and shareholders' equity	$	1,140,579,153	$	954,269,164

Table of Contents

~~WORLD ACCEPTANCE CORPORATION~~

~~AND SUBSIDIARIES~~

~~CONSOLIDATED STATEMENTS OF OPERATIONS~~

~~(Unaudited)~~

Three months ended September 30, Six months ended September 30,
2020 2019 2020 2019
Revenues:
Interest and fee income $ 108,885,851 $ 126,091,032 $ 218,746,307 $ 249,001,181
Insurance income, net and other income 15,555,201 15,482,084 29,561,547 31,013,918
Total revenues 124,441,052 141,573,116 248,307,854 280,015,099
Expenses:
Provision for credit losses 26,090,367 52,968,036 51,751,027 94,259,107
General and administrative expenses:
Personnel 46,832,893 49,610,802 91,454,916 102,070,247
Occupancy and equipment 13,515,468 13,554,466 26,696,974 26,910,768
Advertising 5,255,613 6,269,734 7,867,780 12,379,561
Amortization of intangible assets 1,286,118 1,257,953 2,668,246 2,212,594
Other 8,402,448 7,759,428 18,212,603 16,655,576
Total general and administrative expenses 75,292,540 78,452,383 146,900,519 160,228,746
Interest expense 5,892,790 6,327,817 11,454,667 10,731,145
Total expenses 107,275,697 137,748,236 210,106,213 265,218,998
Income before income taxes 17,165,355 3,824,880 38,201,641 14,796,101
Income taxes 3,766,735 1,311,706 9,293,372 3,674,528
Net income $ 13,398,620 $ 2,513,174 $ 28,908,269 $ 11,121,573
Net income per common share:
Basic $ 2.01 $ 0.32 $ 4.27 $ 1.36
Diluted $ 1.96 $ 0.31 $ 4.20 $ 1.30
Weighted average common shares outstanding:
Basic 6,680,969 7,807,229 6,773,704 8,155,263
Diluted 6,853,425 8,201,597 6,890,265 8,532,012

See accompanying notes to consolidated financial statements.

Table of Contents

WORLD ACCEPTANCE CORPORATION

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF ~~SHAREHOLDERS' EQUITY~~OPERATIONS

(Unaudited)

Three months ended September 30, 2020
Common Stock
Shares Additional Paid-in Capital Retained Earnings Total Shareholders' Equity
Balances at June 30, 2020 7,451,588 $ 231,678,312 159,564,603 391,242,915
Proceeds from exercise of stock options 15,571 1,006,825 — 1,006,825
Common stock repurchases (460,120) — (43,235,638) (43,235,638)
Restricted common stock expense under stock option plan, net of cancellations ($90,720) (4,959) 3,776,190 — 3,776,190
Stock option expense — 1,086,239 — 1,086,239
Net income — — 13,398,620 13,398,620
Balances at September 30, 2020 7,002,080 $ 237,547,566 129,727,585 367,275,151

Three months ended September 30, 2019
Common Stock
Shares Additional Paid-in Capital Retained Earnings Total Shareholders' Equity
Balances at June 30, 2019 9,181,305 $ 208,876,263 340,783,798 549,660,061
Proceeds from exercise of stock options 15,706 977,522 — 977,522
Common stock repurchases (1,251,103) — (168,195,335) (168,195,335)
Restricted common stock expense under stock option plan, net of cancellations ($8,481) (66) 6,677,016 — 6,677,016
Stock option expense — 1,604,772 — 1,604,772
Net income — — 2,513,174 2,513,174
Balances at September 30, 2019 7,945,842 $ 218,135,573 175,101,637 393,237,210

Six months ended September 30, 2020
Common Stock
Shares Additional Paid-in Capital Retained Earnings Total Shareholders' Equity
Balances at March 31, 2020 7,807,834 $ 227,214,577 184,748,490 $ 411,963,067
Proceeds from exercise of stock options 15,571 1,006,825 — 1,006,825
Common stock repurchases (786,418) — (62,686,925) (62,686,925)
Restricted common stock expense under stock option plan, net of cancellations ($284,079) (34,907) 7,193,190 — 7,193,190
Stock option expense — 2,132,974 — 2,132,974
Cumulative effect of adoption of ASC 326 — — (21,242,249) (21,242,249)
Net income — — 28,908,269 28,908,269
Balances at September 30, 2020 7,002,080 $ 237,547,566 129,727,585 $ 367,275,151

~~Table of Contents~~

Six months ended September 30, 2019
Common Stock
Shares Additional Paid-in Capital Retained Earnings Total Shareholders' Equity
Balances at March 31, 2019 9,284,118 $ 198,125,649 353,990,976 $ 552,116,625
Proceeds from exercise of stock options 55,472 3,654,097 — 3,654,097
Common stock repurchases (1,392,180) — (190,010,912) (190,010,912)
Restricted common stock expense under stock option plan, net of cancellations ($246,650) (1,568) 13,129,717 — 13,129,717
Stock option expense — 3,226,110 — 3,226,110
Net income — — 11,121,573 11,121,573
Balances at September 30, 2019 7,945,842 $ 218,135,573 175,101,637 $ 393,237,210


	Three months ended September 30,				Six months ended September 30,
	2021		2020		2021		2020

Revenues:
Interest and fee income	$	118,113,200	$	108,885,851	$	227,287,915	$	218,746,307
Insurance income, net and other income	19,713,684		15,555,201		40,198,347		29,561,547
Total revenues	137,826,884		124,441,052		267,486,262		248,307,854

Expenses:
Provision for credit losses	42,043,526		26,090,367		72,309,337		51,751,027
General and administrative expenses:
Personnel	45,745,551		46,832,893		91,977,674		91,454,916
Occupancy and equipment	12,934,959		13,515,468		26,541,936		26,696,974
Advertising	5,294,835		5,255,613		9,054,544		7,867,780
Amortization of intangible assets	1,245,545		1,286,118		2,460,329		2,668,246
Other	9,767,969		8,402,448		18,305,573		18,212,603
Total general and administrative expenses	74,988,859		75,292,540		148,340,056		146,900,519

Interest expense	6,713,653		5,892,790		12,214,725		11,454,667
Total expenses	123,746,038		107,275,697		232,864,118		210,106,213

Income before income taxes	14,080,846		17,165,355		34,622,144		38,201,641

Income taxes	1,640,754		3,766,735		6,411,224		9,293,372









Net income	$	12,440,092	$	13,398,620	$	28,210,920	$	28,908,269







Net income per common share:
Basic	$	2.04	$	2.01	$	4.61	$	4.27
Diluted	$	1.94	$	1.96	$	4.38	$	4.20
Weighted average common shares outstanding:
Basic	6,083,255		6,680,969		6,120,665		6,773,704
Diluted	6,413,079		6,853,425		6,434,211		6,890,265

See accompanying notes to consolidated financial statements.

Table of Contents

WORLD ACCEPTANCE CORPORATION

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(Unaudited)


	Three months ended September 30, 2021
	Common Stock
	Shares	Additional Paid-in Capital		Retained Earnings	Total Shareholders' Equity
Balances at June 30, 2021	6,693,703	$	261,446,129	144,024,733	405,470,862
Proceeds from exercise of stock options	87,628	6,873,724		—	6,873,724
Common stock repurchases	(61,187)	—		(10,029,661)	(10,029,661)
Restricted common stock expense under stock option plan, net of cancellations ($12,724)	3,996	3,342,974		—	3,342,974
Stock option expense	—	909,350		—	909,350

Net income	—	—		12,440,092	12,440,092
Balances at September 30, 2021	6,724,140	$	272,572,177	146,435,164	419,007,341


	Three months ended September 30, 2020
	Common Stock
	Shares	Additional Paid-in Capital		Retained Earnings	Total Shareholders' Equity
Balances at June 30, 2020	7,451,588	$	231,678,312	159,564,603	391,242,915
Proceeds from exercise of stock options	15,571	1,006,825		—	1,006,825
Common stock repurchases	(460,120)	—		(43,235,638)	(43,235,638)
Restricted common stock expense under stock option plan, net of cancellations ($90,720)	(4,959)	3,776,190		—	3,776,190
Stock option expense	—	1,086,239		—	1,086,239


Net loss	—	—		13,398,620	13,398,620
Balances at September 30, 2020	7,002,080	$	237,547,566	129,727,585	367,275,151


	Six months ended September 30, 2021
	Common Stock
	Shares	Additional Paid-in Capital		Retained Earnings	Total Shareholders' Equity
Balances at March 31, 2021	6,805,294	$	255,590,674	149,336,767	$	404,927,441
Proceeds from exercise of stock options	111,122	8,682,578		—	8,682,578
Common stock repurchases	(195,436)	—		(31,112,523)	(31,112,523)
Restricted common stock expense under stock option plan, net of cancellations ($150,213)	3,160	6,445,948		—	6,445,948
Stock option expense	—	1,852,977		—	1,852,977

Net income	—	—		28,210,920	28,210,920
Balances at September 30, 2021	6,724,140	$	272,572,177	146,435,164	$	419,007,341

Table of Contents


	Six months ended September 30, 2020
	Common Stock
	Shares	Additional Paid-in Capital		Retained Earnings	Total Shareholders' Equity
Balances at March 31, 2020	7,807,834	$	227,214,577	184,748,490	$	411,963,067
Proceeds from exercise of stock options	15,571	1,006,825		—	1,006,825
Common stock repurchases	(786,418)	—		(62,686,925)	(62,686,925)
Restricted common stock expense under stock option plan, net of cancellations ($284,079)	(34,907)	7,193,190		—	7,193,190
Stock option expense	—	2,132,974		—	2,132,974
Cumulative effect of adoption of ASC 326	—	—		(21,242,249)	(21,242,249)


Net income	—	—		28,908,269	28,908,269
Balances at September 30, 2020	7,002,080	$	237,547,566	129,727,585	$	367,275,151

See accompanying notes to consolidated financial statements.

Table of Contents

WORLD ACCEPTANCE CORPORATION

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

~~(Unaudited)~~

Six months ended September 30,
2020 2019
Cash flow from operating activities:
Net income $ 28,908,269 $ 11,121,573
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of intangible assets 2,668,246 2,212,594
Amortization of investment in historic tax credits 868,192 0
Amortization of debt issuance costs 315,015 261,392
Provision for credit losses 51,751,027 94,259,107
Depreciation 3,477,512 3,499,067
Loss (gain) on sale of property and equipment 34,058 (101,774)
Deferred income tax benefit 1,218,798 (6,361,213)
Compensation related to stock option and restricted stock plans, net of taxes and adjustments 9,610,243 16,602,477
Change in accounts:
Other assets, net 1,692,741 3,704,467
Income taxes payable (242,285) (10,028,921)
Accounts payable and accrued expenses (20,387,516) 3,007,987
Net cash provided by operating activities 79,914,300 118,176,756
Cash flows from investing activities:
Decrease (increase) in loans receivable, net 19,745,335 (130,033,384)
Net assets acquired from branch acquisitions, primarily loans (5,786,847) (47,021,848)
Increase in intangible assets from acquisitions (1,150,091) (14,548,794)
Purchases of property and equipment (4,760,009) (5,132,987)
Proceeds from sale of property and equipment 2,947,225 153,044
Net cash provided by (used in) investing activities 10,995,613 (196,583,969)
Cash flow from financing activities:
Borrowings from senior notes payable 144,676,750 358,191,400
Payments on senior notes payable (170,876,750) (91,300,000)
Debt issuance costs associated with senior notes payable (376,750) (991,400)
Proceeds from exercise of stock options 1,006,825 3,654,097
Payments for taxes related to net share settlement of equity awards (284,079) (246,650)
Repurchase of common stock (62,686,925) (190,010,912)
Net cash provided by (used in) financing activities (88,540,929) 79,296,535
Net change in cash and cash equivalents 2,368,984 889,322
Cash and cash equivalents at beginning of period 11,618,922 9,335,433
Cash and cash equivalents at end of period $ 13,987,906 $ 10,224,755
Supplemental Disclosures:
Interest paid during the period $ 11,283,327 $ 9,303,060
Income taxes paid during the period $ 8,731,860 $ 17,683,191

Table of Contents

(Unaudited)


	Six months ended September 30,
	2021		2020
Cash flow from operating activities:
Net income	$	28,210,920	$	28,908,269
Adjustments to reconcile net income to net cash provided by operating activities:

Loss on assets held for sale	38,633		—
Amortization of intangible assets	2,460,329		2,668,246
Amortization of investment in historic tax credits	1,955,692		868,192
Amortization of debt issuance costs	301,996		315,015
Provision for credit losses	72,309,337		51,751,027
Depreciation	3,355,606		3,477,512

Loss on sale of property and equipment	337,181		34,058
Deferred income tax expense (benefit)	(9,255,272)		1,218,798
Compensation related to stock option and restricted stock plans, net of taxes and adjustments	8,449,138		9,610,243

Change in accounts:
Other assets, net	(5,887,792)		1,984,942
Income taxes payable	(3,317,691)		(242,285)
Accounts payable and accrued expenses	11,632,237		(20,387,516)
Net cash provided by operating activities	110,590,314		80,206,501
Cash flows from investing activities:
Increase in loans receivable, net	(239,168,631)		19,745,335

Net assets acquired from acquisitions, primarily loans	(9,631,112)		(5,786,847)
Increase in intangible assets from acquisitions	(1,228,872)		(1,150,091)
Purchases of property and equipment	(3,382,481)		(4,760,009)

Proceeds from sale of assets held for sale	1,104,895		—
Proceeds from sale of property and equipment	153,100		2,947,225

Net cash provided by (used in) investing activities	(252,153,101)		10,995,613
Cash flow from financing activities:
Borrowings from senior notes payable	239,248,253		144,676,750
Payments on senior notes payable	(368,550,000)		(170,876,750)
Issuance of senior unsecured notes payable	300,000,000		—
Debt issuance costs associated with senior unsecured notes payable	(5,113,826)		—
Debt issuance costs associated with senior notes payable	—		(376,750)
Proceeds from exercise of stock options	8,682,578		1,006,825
Payments for taxes related to net share settlement of equity awards	(150,213)		(284,079)
Repayment of finance lease	(301,721)		(292,201)
Repurchase of common stock	(31,112,523)		(62,686,925)


Net cash provided by (used in) financing activities	142,702,548		(88,833,130)

Net change in cash and cash equivalents	1,139,761		2,368,984
Cash and cash equivalents at beginning of period	15,746,454		11,618,922

Cash and cash equivalents at end of period	$	16,886,215	$	13,987,906



Supplemental Disclosures:
Interest paid during the period	$	11,251,918	$	11,283,327
Income taxes paid during the period	$	19,204,025	$	8,731,860

See accompanying notes to consolidated financial statements.

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WORLD ACCEPTANCE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 – BASIS OF PRESENTATION

The consolidated financial statements of the Company at September 30, ~~2020~~2021 and for the three and six months then ended were prepared in accordance with the instructions for Form 10-Q and are unaudited; however, in the opinion of management all adjustments (consisting only of items of a normal, recurring nature) necessary for a fair presentation of the financial position at September 30, ~~2020,~~2021, and the results of operations and cash flows for the periods ended September 30, ~~2020~~2021 and ~~2019,~~2020, have been included. The results for the interim periods are not necessarily indicative of the results that may be expected for the full year or any other interim period.

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities at the date of the consolidated financial statements and the reported amount of revenue and expenses during the reporting period. Actual results could differ from those estimates.

The consolidated financial statements do not include all disclosures required by GAAP and should be read in conjunction with the Company’s audited consolidated financial statements and related notes for the fiscal year ended March 31, ~~2020,~~2021, included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, ~~2020,~~2021, as filed with the SEC. ~~In addition to the "Critical Accounting Policies" impacted by the new CECL standard described below, the~~The Company applies the accounting policies contained in Note 1 to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended March 31, ~~2020.~~2021. The Company believes that the disclosures are adequate to make the information presented not misleading. Certain reclassifications have been made to the amounts previously reported to conform to the current period presentation.

NOTE 2 – ASSETS HELD FOR SALE

In the fourth quarter of fiscal 2020 the Company moved its corporate headquarters from properties it owned outright in Greenville, South Carolina to leased office space in downtown Greenville, South Carolina. Under ASC 360-10, the properties met the criteria for classification as held for sale as of March 31, 2020.

During the second quarter of fiscal 2021 the Company completed the sale of ~~two~~2 of the ~~three~~3 buildings held for sale. During the second quarter of fiscal 2022 the Company completed the sale ~~resulting in an aggregate loss~~ of ~~$37,579. The~~the last held for sale building, and recorded a $39.0 thousand loss on sale ~~of assets held for sale~~which is included as a component of ~~insurance~~Insurance income, net and other income in the ~~Company's Consolidated Statement~~consolidated statements of ~~Operations. The Company expects to complete the sale of the third, and final, building held for sale within the next twelve months.~~operations.

The following table reconciles the major classes of assets held for sale to the amounts presented in the Consolidated Balance Sheets:

September 30, 2020 March 31, 2020
Assets held for sale:
Property and equipment, net $ 1,143,528 $ 3,991,498
Total assets held for sale $ 1,143,528 $ 3,991,498


	September 30, 2021		March 31, 2021
Assets held for sale:
Property and equipment, net	$	—	$	1,143,528
Total assets held for sale	$	—	$	1,143,528

NOTE 3 – SUMMARY OF SIGNIFICANT POLICIES

Nature of Operations

The Company is a small-loan consumer finance company headquartered in Greenville, South Carolina that offers short-term small loans, medium-term larger loans, related credit insurance products and ancillary products and services to individuals who have limited access to other sources of consumer credit. The Company offers income tax return preparation services to its loan customers and other individuals.

Seasonality

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The Company's loan volume and corresponding loans receivable follow seasonal trends. The Company's highest loan demand generally occurs from October through December, its third fiscal quarter. Loan demand is generally lowest and loan repayment highest from January to March, its fourth fiscal quarter. Loan volume and average balances remain relatively level during the remainder of the year. Consequently, the Company experiences significant seasonal fluctuations in its operating results and cash

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needs. Operating results for the Company's third fiscal quarter are generally lower than in other quarters and operating results for its fourth fiscal quarter are generally higher than in other quarters.

Loans receivable, net

Loans receivable are carried at the gross amount outstanding, reduced by unearned interest and insurance income, net of deferred origination fees and direct costs and an allowance for credit losses. Fees received and direct costs incurred for the origination of loans are deferred and amortized to interest income over the contractual lives of the loans using the interest method. Unamortized amounts are recognized in income at the time that loans are refinanced or paid in full except for those refinancings that do not constitute a more than minor modification.

Allowance for credit losses

Refer to Note 5, “Finance Receivables and Allowance for Credit Losses,” in this Quarterly Report on Form 10-Q for information regarding the Company's adoption of the CECL allowance model on April 1, 2020 and a description of the methodology it utilizes.

Reclassification

~~The Company has made certain adjustments~~Certain prior period amounts have been reclassified to its treatment of historic tax credits purchased during fiscal 2020 since it filed its Report on Form 10-Q for the quarterly period ended September 30, 2019. The adjustments correctly present the Company’s election to account for historic tax credits purchased using the income statement method in conjunction with the flow-through method. Under this approach, the deferred tax liability relatedconform to the difference between the book and tax basis in the underlying historic tax credit investment is recorded in the tax provision and reversed over the same period as the amortization of the historic tax credit investment. As a result of these corrections, the below line items have been adjusted as follows:

CONSOLIDATED STATEMENT OF OPERATIONS
Three months ended September 30, 2019 Six months ended September 30, 2019
As originally filed Adjustments As revised As originally filed Adjustments As revised
Income tax expense (benefit) $ (395,121) $ 1,706,827 $ 1,311,706 $ 1,967,701 $ 1,706,827 $ 3,674,528
Net income $ 4,220,001 $ (1,706,827) $ 2,513,174 $ 12,828,400 $ (1,706,827) $ 11,121,573

~~Recently Adopted Accounting Standards~~

~~Measurement of Credit Losses~~current presentation. Such reclassifications had no impact on ~~Financial Instruments~~

ASU 2016-13 (and all subsequent ASUs on this topic) introduce the CECL model, a new credit loss methodology, replacing multiple existing impairment methods in current GAAP, which generally require that a loss be incurred before it is recognized. The amendments in this ASU require loss estimates be determined over the lifetime of the asset and broaden the information that an entity must consider in developing its expected credit losses. The ASU does not specify a method for measuring expected credit losses and allows an entity to apply methods that reasonably reflect its expectations of the credit loss estimate based on the entity’s size, complexity, and risk profile. In addition, the disclosures of credit quality indicators in relation to the amortized cost of financing receivables, a current disclosure requirement, are further disaggregated by year of origination.

The Company adopted this ASU (and all subsequent ASUs on this topic) as of April 1, 2020 using the modified retrospective approach. The adoption of this pronouncement resulted in the recognition of a $28.6 million increase in the allowance for credit losses on our opening balance sheet as of April 1, 2020, with a corresponding net-of-tax $21.2 million reduction in retained earnings and a $7.4 million increase to deferredpreviously reported net income ~~taxes, net.~~or shareholders' equity.

Recently Issued Accounting Standards Not Yet Adopted

We reviewed all newly issued accounting pronouncements and concluded that they are either not applicable to our business or are not expected to have a material effect on the consolidated financial statements as a result of future adoption.

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NOTE 4 – FAIR VALUE

Fair Value Disclosures

The Company may carry certain financial instruments and derivative assets and liabilities at fair value measured on a recurring or nonrecurring basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Company measures the fair values of its financial instruments based on the fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

Fair value measurements are grouped in three levels. The levels prioritize the inputs used to measure the fair value of the assets or liabilities. These levels are:

•Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities.

•Level 2 – Inputs other than quoted prices that are observable for assets and liabilities, either directly or indirectly. These inputs include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are less active.

•Level 3 – Unobservable inputs for assets or liabilities reflecting the reporting entity’s own assumptions.

The Company’s financial instruments consist of cash and cash equivalents, loans receivable, net, senior notes payable, and senior unsecured notes payable. ~~Fair value approximates carrying value for all of these instruments.~~ Loans receivable are originated at prevailing market rates and have an average life of approximately eight months. Given the short-term nature of these loans, they are continually repriced at current market rates. The Company’s revolving credit facility has a variable rate based on a margin over LIBOR and reprices with any changes in LIBOR. The fair value of the senior unsecured notes payable is estimated based on quoted prices in markets that are not active. The Company also considers its creditworthiness in its estimation of fair value.

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The carrying amounts and estimated fair values of financial assets and liabilities disclosed but not carried at fair value and their level within the fair value hierarchy are summarized below.


			September 30, 2020			March 31, 2020					September 30, 2021				March 31, 2021
		Input Level	Carrying Value		Estimated Fair Value	Carrying Value		Estimated Fair Value		Input Level	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
ASSETS	ASSETS								ASSETS
Cash and cash equivalents	Cash and cash equivalents	1	$	13,987,906	13,987,906	$	11,618,922	11,618,922	Cash and cash equivalents	1	$	16,886,215	$	16,886,215	$	15,746,454	$	15,746,454
Loans receivable, net	Loans receivable, net	3	710,064,903		710,064,903	804,402,786		804,402,786	Loans receivable, net	3	910,149,795		910,149,795		733,659,389		733,659,389

LIABILITIES	LIABILITIES								LIABILITIES
Senior unsecured notes payable									Senior unsecured notes payable	2	300,000,000		296,100,000		—		—
Senior notes payable	Senior notes payable	3	424,900,000		424,900,000	451,100,000		451,100,000	Senior notes payable	3	275,705,753		275,705,753		405,007,500		405,007,500

The carrying amounts and estimated fair values of amounts the Company measures at fair value on a non-recurring basis, which are limited to the Company's assets held for sale, are summarized below.

September 30, 2020 March 31, 2020
Input Level Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value
ASSETS
Assets held for sale 2 $ 1,143,528 $ 1,143,528 $ 3,991,498 $ 3,991,498


		September 30, 2021				March 31, 2021
	Input Level	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
ASSETS
Assets held for sale	2	$	—	$	—	$	1,143,528	$	1,143,528

The Company re-valued its corporate headquarters in Greenville, South Carolina as of March 31, 2020 in conjunction with its reclassification of the related assets as held for sale. The observable inputs the Company used in its revaluation were the agreed-upon prices to sell the assets.

There were no other significant assets or liabilities measured at fair value on a non-recurring basis as of September 30, ~~2020~~2021 or March 31, ~~2020.~~2021.

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NOTE 5 – FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES

The following is a summary of gross loans receivable by ~~customer tenure~~Customer Tenure as of:

~~Customer Tenure~~

~~September 30, 2020~~

~~0 to 5 months~~

~~75,827,098~~

~~6 to 17 months~~

~~142,658,784~~

~~18 to 35 months~~

~~160,451,477~~

~~36 to 59 months~~

~~126,077,197~~

~~60+ months~~

~~603,148,733~~

~~Tax advance loans~~

~~1,203,198~~

~~Total gross loans~~

~~1,109,366,487~~


Customer Tenure	September 30, 2021		March 31, 2021
0 to 5 months	$	160,762,921	$	92,378,097
6 to 17 months	112,721,013		106,742,121
18 to 35 months	231,750,261		169,361,910
36 to 59 months	176,611,569		130,655,627
60+ months	712,329,556		597,292,495

Tax advance loans	651,816		8,316,011
Total gross loans	$	1,394,827,136	$	1,104,746,261

During the first quarter of fiscal 2021, we adopted ASU 2016-13, which replaces the incurred loss methodology for determining our provision for credit losses and allowance for credit losses with an expected loss methodology that is referred to as the CECL model, using the modified retrospective approach. Upon adoption, the total allowance for credit losses increased by $28.6 million, with no impact to the consolidated statement of operations.

Based on the Company’s loan products, the purpose and the term, current payment performance is used to assess the capability of the borrower to repay contractual obligations of the loan agreements as scheduled. Current payment performance is monitored by management on a daily basis. On an as needed basis, qualitative information may be taken into consideration if new information arises related to the customer’s ability to repay the loan. The Company’s payment performance buckets are as follows: current, 30-60 days past due, 61-90 days past due, 91 days or more past due.

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The following ~~tables provide~~table provides a breakdown of the Company’s gross loans receivable by current payment performance on a recency basis and year of origination at September 30, ~~2020:~~2021:



	Term Loans By Origination
Loans	Up to 1 Year Ago		Between 1 and 2 Years Ago		Between 2 and 3 Years Ago		Between 3 and 4 Years Ago		Between 4 and 5 Years Ago		More than 5 Years Ago		Total
Current	$	1,228,611,816	$	38,665,263	$	3,003,845	$	123,756	$	27,237	$	789	$	1,270,432,706
30 - 60 days past due	50,891,660		2,815,418		387,851		20,553		7,382		—		54,122,864
61 - 90 days past due	29,152,214		1,842,430		213,683		21,298		7,099		—		31,236,724
91 or more days past due	33,967,099		4,059,648		299,904		43,950		10,341		2,084		38,383,026
Total	$	1,342,622,789	$	47,382,759	$	3,905,283	$	209,557	$	52,059	$	2,873	$	1,394,175,320

	Term Loans By Origination
Tax advance loans	Up to 1 Year Ago		Between 1 and 2 Years Ago		Between 2 and 3 Years Ago		Between 3 and 4 Years Ago		Between 4 and 5 Years Ago		More than 5 Years Ago		Total
Current	$	38,954	$	46	$	—	$	—	$	—	$	—	39,000
30 - 60 days past due	37,718		—		—		—		—		—		37,718
61 - 90 days past due	33,254		—		164		—		—		—		33,418
91 or more days past due	534,716		6,964		—		—		—		—		541,680
Total	$	644,642	$	7,010	$	164	$	—	$	—	$	—	$	651,816
Total gross loans													$	1,394,827,136

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Term Loans By Origination
Loans Up to
1
Year Ago Between
1 and 2
Years Ago Between
2 and 3
Years Ago Between
3 and 4
Years Ago Between
4 and 5
Years Ago More than
5
Years Ago Total
Current $ 972,725,701 $ 50,307,235 $ 2,171,951 $ 156,648 $ 10,639 $ 3,984 $ 1,025,376,158
30 - 60 days past due 30,118,338 3,199,397 226,733 33,613 1,560 1,553 33,581,194
61 - 90 days past due 16,896,334 1,959,318 116,829 30,665 1,386 0 19,004,532
91 or more days past due 24,942,824 4,938,873 287,985 25,415 4,497 1,811 30,201,405
Total $ 1,044,683,197 $ 60,404,823 $ 2,803,498 $ 246,341 $ 18,082 $ 7,348 $ 1,108,163,289
Term Loans By Origination
Tax advance loans Up to
1
Year Ago Between
1 and 2
Years Ago Between
2 and 3
Years Ago Between
3 and 4
Years Ago Between
4 and 5
Years Ago More than
5
Years Ago Total
Current $ 63,894 $ 469 $ 0 $ 0 $ 0 $ 0 64,363
30 - 60 days past due 58,728 156 0 0 0 0 58,884
61 - 90 days past due 62,232 879 0 0 0 0 63,111
91 or more days past due 1,013,377 3,463 0 0 0 0 1,016,840
Total $ 1,198,231 $ 4,967 $ 0 $ 0 $ 0 $ 0 $ 1,203,198
Total gross loans $ 1,109,366,487

The following ~~tables provide~~table provides a breakdown of the Company’s gross loans receivable by current payment performance on a recency basis and year of origination at March 31, 2021:


	Term Loans By Origination
Loans	Up to 1 Year Ago		Between 1 and 2 Years Ago		Between 2 and 3 Years Ago		Between 3 and 4 Years Ago		Between 4 and 5 Years Ago		More than 5 Years Ago		Total
Current	$	970,526,682	$	45,769,052	$	2,102,732	$	154,890	$	14,444	$	831	$	1,018,568,631
30 - 60 days past due	21,862,634		2,011,261		153,417		21,426		3,500		2,069		24,054,307
61 - 90 days past due	18,039,010		1,208,936		88,119		11,800		571		—		19,348,436
91 or more days past due	31,126,328		3,120,210		183,434		14,028		14,708		168		34,458,876
Total	$	1,041,554,654	$	52,109,459	$	2,527,702	$	202,144	$	33,223	$	3,068	$	1,096,430,250

	Term Loans By Origination
Tax advance loans	Up to 1 Year Ago		Between 1 and 2 Years Ago		Between 2 and 3 Years Ago		Between 3 and 4 Years Ago		Between 4 and 5 Years Ago		More than 5 Years Ago		Total
Current	$	7,583,075	$	9,360	$	—	$	—	$	—	$	—	7,592,435
30 - 60 days past due	686,667		1,423		—		—		—		—		688,090
61 - 90 days past due	—		—		321		—		—		—		321
91 or more days past due	—		34,509		656		—		—		—		35,165
Total	$	8,269,742	$	45,292	$	977	$	—	$	—	$	—	$	8,316,011
Total gross loans													$	1,104,746,261

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The following table provides a breakdown of the Company’s gross loans receivable by current payment performance on a contractual basis and year of origination at September 30, ~~2020:~~2021:


	Term Loans By Origination
Loans	Up to 1 Year Ago		Between 1 and 2 Years Ago		Between 2 and 3 Years Ago		Between 3 and 4 Years Ago		Between 4 and 5 Years Ago		More than 5 Years Ago		Total
Current	$	1,213,267,088	$	34,694,764	$	2,379,587	$	67,338	$	8,304	$	789	$	1,250,417,870
30 - 60 days past due	55,615,259		1,988,198		160,947		3,115		—		—		57,767,519
61 - 90 days past due	32,795,445		1,479,744		139,530		5,452		—		—		34,420,171
91 or more days past due	40,944,995		9,220,054		1,225,219		133,652		43,756		2,084		51,569,760
Total	$	1,342,622,787	$	47,382,760	$	3,905,283	$	209,557	$	52,060	$	2,873	$	1,394,175,320

	Term Loans By Origination
Tax advance loans	Up to 1 Year Ago		Between 1 and 2 Years Ago		Between 2 and 3 Years Ago		Between 3 and 4 Years Ago		Between 4 and 5 Years Ago		More than 5 Years Ago		Total
Current	$	18,447	$	—	$	—	$	—	$	—	$	—	$	18,447
30 - 60 days past due	29,569		—		—		—		—		—		29,569
61 - 90 days past due	27,070		—		—		—		—		—		27,070
91 or more days past due	569,557		7,009		164		—		—		—		576,730
Total	$	644,643	$	7,009	$	164	$	—	$	—	$	—	$	651,816
Total gross loans													$	1,394,827,136

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Term Loans By Origination
Loans Up to
1
Year Ago Between
1 and 2
Years Ago Between
2 and 3
Years Ago Between
3 and 4
Years Ago Between
4 and 5
Years Ago More than
5
Years Ago Total
Current $ 958,885,641 $ 44,710,976 $ 1,629,478 $ 74,227 $ 843 $ 0 $ 1,005,301,165
30 - 60 days past due 33,474,292 2,144,594 111,912 14,826 0 0 35,745,624
61 - 90 days past due 19,187,491 1,822,975 76,408 4,932 0 0 21,091,806
91 or more days past due 33,135,773 11,726,278 985,700 152,356 17,239 7,348 46,024,694
Total $ 1,044,683,197 $ 60,404,823 $ 2,803,498 $ 246,341 $ 18,082 $ 7,348 $ 1,108,163,289
Term Loans By Origination
Tax advance loans Up to
1
Year Ago Between
1 and 2
Years Ago Between
2 and 3
Years Ago Between
3 and 4
Years Ago Between
4 and 5
Years Ago More than
5
Years Ago Total
Current $ 22,319 $ 0 $ 0 $ 0 $ 0 $ 0 22,319
30 - 60 days past due 41,073 0 0 0 0 0 41,073
61 - 90 days past due 51,596 0 0 0 0 0 51,596
91 or more days past due 1,083,243 4,967 0 0 0 0 1,088,210
Total $ 1,198,231 $ 4,967 $ 0 $ 0 $ 0 $ 0 $ 1,203,198
Total gross loans $ 1,109,366,487
The following table provides a breakdown of the Company’s gross loans receivable by current payment performance on a contractual basis and year of origination at March 31, 2021:


	Term Loans By Origination
Loans	Up to 1 Year Ago		Between 1 and 2 Years Ago		Between 2 and 3 Years Ago		Between 3 and 4 Years Ago		Between 4 and 5 Years Ago		More than 5 Years Ago		Total
Current	$	948,353,853	$	39,661,944	$	1,522,148	$	83,073	$	1,790	$	831	$	989,623,639
30 - 60 days past due	29,300,148		1,872,816		72,187		1,322		—		—		31,246,473
61 - 90 days past due	23,075,264		1,363,196		75,343		567		—		—		24,514,370
91 or more days past due	40,825,388		9,211,503		858,024		117,183		31,433		2,237		51,045,768
Total	$	1,041,554,653	$	52,109,459	$	2,527,702	$	202,145	$	33,223	$	3,068	$	1,096,430,250

	Term Loans By Origination
Tax advance loans	Up to 1 Year Ago		Between 1 and 2 Years Ago		Between 2 and 3 Years Ago		Between 3 and 4 Years Ago		Between 4 and 5 Years Ago		More than 5 Years Ago		Total
Current	$	7,583,075	$	—	$	—	$	—	$	—	$	—	$	7,583,075
30 - 60 days past due	686,667		—		—		—		—		—		686,667
61 - 90 days past due	—		—		—		—		—		—		—
91 or more days past due	—		45,292		977		—		—		—		46,269
Total	$	8,269,742	$	45,292	$	977	$	—	$	—	$	—	$	8,316,011
Total gross loans													$	1,104,746,261

The allowance for credit losses is applied to amortized cost, which is defined as the amount at which a financing receivable is originated, and net of deferred fees and costs, collection of cash, and charge-offs. Amortized cost also includes interest earned but not collected.

Credit Risk is inherent in the business of extending loans to borrowers and is continuously monitored by management and reflected within the allowance for credit losses for loans. The allowance for credit losses is an estimate of expected losses inherent within the Company’s gross loans receivable portfolio. In estimating the allowance for credit losses, loans with similar risk characteristics are aggregated into pools and collectively assessed. The Company’s loan products have generally the same terms therefore the Company looked to borrower characteristics as a way to disaggregate loans into pools sharing similar risks.

In determining the allowance for credit losses, the Company examined four borrower risk metrics as noted below.

1.Borrower type

2.Active months

3.Prior loan performance

4.Customer ~~tenure~~Tenure

To determine how well each metric predicts default risk the Company uses loss rate data over an observation period of twelve months at the loan level.

The information value was then calculated for each metric. From this analysis management determined the metric that had the strongest predictor of default risk was ~~customer tenure.~~Customer Tenure. The ~~customer tenure~~Customer Tenure buckets used in the allowance for credit loss calculation are:

1.0 to 5 months

2.6 to 17 months

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3.18 to 35 months

4.36 to 59 months

5.60+ months

~~Table of Contents~~

Management will continue to monitor this credit metric on a quarterly basis.

Management estimates an allowance for each ~~customer tenure~~Customer Tenure bucket by performing a historical migration analysis of loans in that bucket for the twelve most recent historical twelve-month migration periods, adjusted for seasonality. All loans that are greater than 90 days past due on a recency basis and not written off as of the reporting date are reserved for at 100% of the outstanding balance, net of a calculated Rehab Rate. Management considers whether current credit conditions might suggest a change is needed to the allowance for credit losses by monitoring trends in 60-day delinquencies, FICO scores and average loan size as compared to metrics in the historical migration period. Due to the short term nature of the loan portfolio, forecasted changes in macroeconomic variables such as unemployment do not have a significant impact on loans outstanding at the end of a particular reporting period. Therefore, management develops a reasonable and supportable forecast of losses by comparing the most recent 6-month loss curves as compared to historical loss curves to see if there are significant changes in borrower behavior that may indicate the historical migration rates should be adjusted. If an adjustment is made as a result of the forecast, then the Company has elected to immediately revert back to historical experience past the forecast period.

The following table presents a roll forward of the allowance for credit losses on our gross loans receivable for the three and six months ended September 30, ~~2020~~2021 and ~~2019.~~2020:


		Three months ended September 30,				Six months ended September 30,					Three months ended September 30,				Six months ended September 30,
		2020		2019		2020		2019			2021		2020		2021		2020
Beginning balance	Beginning balance	$	112,686,597	$	87,353,087	$	96,487,856	$	81,519,624	Beginning balance	97,852,630		$	112,686,597	$	91,722,288	$	96,487,856
Impact of ASC 326		—		—		28,628,368		—
Impact of ASC 326 adoption										Impact of ASC 326 adoption	—		—		—		28,628,368
Provision for credit losses	Provision for credit losses	26,090,367		52,968,036		51,751,027		94,259,107		Provision for credit losses	42,043,526		26,090,367		72,309,337		51,751,027
Charge-offs	Charge-offs	(33,793,503)		(42,604,434)		(77,625,445)		(82,128,421)		Charge-offs	(29,849,610)		(33,793,503)		(59,866,550)		(77,625,445)
Recoveries	Recoveries	4,617,898		3,752,624		10,359,553		7,819,003		Recoveries	4,613,694		4,617,898		10,495,165		10,359,553
Net charge-offs	Net charge-offs	(29,175,605)		(38,851,810)		(67,265,892)		(74,309,418)		Net charge-offs	(25,235,916)		(29,175,605)		(49,371,385)		(67,265,892)
Ending Balance	Ending Balance	$	109,601,359	$	101,469,313	$	109,601,359	$	101,469,313	Ending Balance	$	114,660,240	$	109,601,359	$	114,660,240	$	109,601,359

The following table is an aging analysis on a recency basis at amortized cost of the Company’s gross loans receivable at September 30, ~~2020:~~2021:


			Days Past Due - Recency Basis
Customer Tenure	Current		30 - 60		61 - 90		Over 90		Total Past Due		Total Loans
0 to 5 months	$	130,841,492	$	11,360,208	$	8,223,747	$	10,337,474	$	29,921,429	$	160,762,921
6 to 17 months	95,146,387		6,583,447		4,574,435		6,416,744		17,574,626		112,721,013
18 to 35 months	209,934,364		9,798,948		5,441,891		6,575,058		21,815,897		231,750,261
36 to 59 months	164,431,451		5,847,505		2,881,394		3,451,219		12,180,118		176,611,569
60+ months	670,079,012		20,532,756		10,115,257		11,602,531		42,250,544		712,329,556

Tax advance loans	38,999		37,718		33,418		541,681		612,817		651,816
Total gross loans	1,270,471,705		54,160,582		31,270,142		38,924,707		124,355,431		1,394,827,136
Unearned interest, insurance and fees	(337,028,327)		(14,367,617)		(8,295,284)		(10,325,873)		(32,988,774)		(370,017,101)
Total net loans	$	933,443,378	$	39,792,965	$	22,974,858	$	28,598,834	$	91,366,657	$	1,024,810,035

Percentage of period-end gross loans receivable			3.9%		2.2%		2.8%		8.9%

Days Past Due - Recency Basis
Customer Tenure Current 30 - 60 61 - 90 Over 90 Total Past Due Total Loans
0 to 5 months $ 62,173,397 $ 3,884,632 $ 2,980,787 $ 6,788,282 $ 13,653,701 $ 75,827,098
6 to 17 months 126,535,248 6,150,317 4,017,882 5,955,337 16,123,536 142,658,784
18 to 35 months 147,862,032 5,374,578 2,934,945 4,279,922 12,589,445 160,451,477
36 to 59 months 118,141,571 3,556,780 1,796,038 2,582,808 7,935,626 126,077,197
60+ months 570,663,909 14,614,888 7,274,880 10,595,056 32,484,824 603,148,733
Tax advance loans 64,363 58,884 63,111 1,016,840 1,138,835 1,203,198
Total gross loans 1,025,440,520 33,640,079 19,067,643 31,218,245 83,925,967 1,109,366,487
Unearned interest, insurance and fees (267,783,778) (8,784,778) (4,979,329) (8,152,340) (21,916,447) (289,700,225)
Total net loans $ 757,656,742 $ 24,855,301 $ 14,088,314 $ 23,065,905 $ 62,009,520 $ 819,666,262
Percentage of period-end gross loans receivable 3.0% 1.7% 2.8% 7.6%

1619

Table of Contents

Days Past Due - Contractual Basis
Customer Tenure Current 30 - 60 61 - 90 Over 90 Total Past Due Total Loans
0 to 5 months $ 60,727,536 $ 3,744,789 $ 2,855,588 $ 8,499,186 $ 15,099,563 $ 75,827,099
6 to 17 months 124,014,494 6,292,585 4,228,451 8,123,254 18,644,290 142,658,784
18 to 35 months 145,170,347 5,707,082 3,242,541 6,331,507 15,281,130 160,451,477
36 to 59 months 115,850,902 3,771,789 2,074,251 4,380,254 10,226,294 126,077,196
60+ months 559,537,885 16,229,380 8,690,975 18,690,493 43,610,848 603,148,733
Tax advance loans 22,319 41,073 51,595 1,088,211 1,180,879 1,203,198
Total gross loans 1,005,323,483 35,786,698 21,143,401 47,112,905 104,043,004 1,109,366,487
Unearned interest, insurance and fees (262,530,410) (9,345,347) (5,521,393) (12,303,075) (27,169,815) (289,700,225)
Total net loans $ 742,793,073 $ 26,441,351 $ 15,622,008 $ 34,809,830 $ 76,873,189 $ 819,666,262
Percentage of period-end gross loans receivable 3.2% 1.9% 4.2% 9.4%
The following table is an aging analysis on a recency basis at amortized cost of the Company’s gross loans receivable at March 31, 2021:


			Days Past Due - Recency Basis
Customer Tenure	Current		30 - 60		61 - 90		Over 90		Total Past Due		Total Loans
0 to 5 months	$	72,702,970	$	4,799,102	$	5,680,380	$	9,195,642	$	19,675,124	$	92,378,094
6 to 17 months	94,466,209		3,187,347		2,798,411		6,290,155		12,275,913		106,742,122
18 to 35 months	158,217,605		3,570,696		2,592,402		4,981,208		11,144,306		169,361,911
36 to 59 months	123,542,346		2,432,489		1,753,291		2,927,501		7,113,281		130,655,627
60+ months	569,639,500		10,064,674		6,523,952		11,064,370		27,652,996		597,292,496

Tax advance loans	7,592,435		688,090		321		35,165		723,576		8,316,011
Total gross loans	1,026,161,065		24,742,398		19,348,757		34,494,041		78,585,196		1,104,746,261
Unearned interest, insurance and fees	(259,492,219)		(6,256,776)		(4,892,850)		(8,722,739)		(19,872,365)		(279,364,584)
Total net loans	$	766,668,846	$	18,485,622	$	14,455,907	$	25,771,302	$	58,712,831	$	825,381,677

Percentage of period-end gross loans receivable			2.2%		1.8%		3.1%		7.1%

The following table is an aging analysis on a contractual basis at amortized cost of the Company’s gross loans receivable at September 30, 2021:


			Days Past Due - Contractual Basis
Customer Tenure	Current		30 - 60		61 - 90		Over 90		Total Past Due			Total Loans
0 to 5 months	$	129,295,224	$	11,569,048	$	8,382,893	$	11,515,755	$	31,467,696		$	160,762,920
6 to 17 months	93,069,152		6,780,420		4,840,146		8,031,296		19,651,862			112,721,014
18 to 35 months	206,576,798		10,391,728		6,019,523		8,762,211		25,173,462			231,750,260
36 to 59 months	161,763,230		6,386,089		3,383,798		5,078,453		14,848,340			176,611,570
60+ months	659,713,466		22,640,234		11,793,811		18,182,045		52,616,090			712,329,556

Tax advance loans	18,447		29,569		27,070		576,730		633,369			651,816
Total gross loans	1,250,436,317		57,797,088		34,447,241		52,146,490		144,390,819			1,394,827,136
Unearned interest, insurance and fees	(331,713,378)		(15,332,302)		(9,138,099)		(13,833,322)		(38,303,723)			(370,017,101)
Total net loans	$	918,722,939	$	42,464,786	$	25,309,142	$	38,313,168	$	106,087,096		$	1,024,810,035

Percentage of period-end gross loans receivable			4.1%		2.5%		3.7%		10.3		%

Table of Contents

The following table is an aging analysis on a contractual basis at amortized cost of the Company’s gross loans receivable at March 31, 2021:


			Days Past Due - Contractual Basis
Customer Tenure	Current		30 - 60		61 - 90		Over 90		Total Past Due			Total Loans
0 to 5 months	$	70,532,439	$	5,245,878	$	6,019,264	$	10,580,514	$	21,845,656		$	92,378,095
6 to 17 months	90,679,304		3,936,937		3,267,446		8,858,434		16,062,817			106,742,121
18 to 35 months	153,922,334		4,471,202		3,488,629		7,479,745		15,439,576			169,361,910
36 to 59 months	120,168,698		3,229,253		2,337,625		4,920,052		10,486,930			130,655,628
60+ months	554,320,865		14,363,203		9,401,406		19,207,022		42,971,631			597,292,496

Tax advance loans	7,583,075		686,667		—		46,269		732,936			8,316,011
Total gross loans	997,206,715		31,933,140		24,514,370		51,092,036		107,539,546			1,104,746,261
Unearned interest, insurance and fees	(252,170,339)		(8,075,147)		(6,199,113)		(12,919,985)		(27,194,245)			(279,364,584)
Total net loans	$	745,036,376	$	23,857,993	$	18,315,257	$	38,172,051	$	80,345,301		$	825,381,677

Percentage of period-end gross loans receivable			2.9%		2.2%		4.6%		9.7		%

The Company elected not to record an allowance for credit losses for accrued interest as outlined in ASC 326-20-30-5A. Loans are placed on nonaccrual status when management determines that the full payment of principal and collection of interest according to contractual terms is no longer likely. The accrual of interest is discontinued when a loan is 61 days or more past the contractual due date. When the interest accrual is discontinued, all unpaid accrued interest is reversed against interest income. While a loan is on nonaccrual status, interest revenue is recognized only when a payment is received. Once a loan moves to nonaccrual status, it remains in nonaccrual status until it is paid out, charged off or refinanced. During the three months ended September 30, ~~2020,~~2021, the Company reversed a total of ~~$4.3~~$6.8 million of unpaid accrued interest against interest income. During the six months ended September 30, ~~2020,~~2021, the Company reversed a total of ~~$9.8~~$10.6 million of unpaid accrued interest against interest income.

The following table presents the amortized cost basis of loans on nonaccrual status as of the beginning of the reporting period and the end of the reporting period and the amortized cost basis of nonaccrual loans without related expected credit loss. It also shows year-to-date interest income recognized on nonaccrual loans:

Nonaccrual Financial Assets
Customer Tenure As of
September 30, 2020 As of
March 31, 2020 Financial Assets 61 Days or More Past Due, Not on Nonaccrual Status Nonaccrual Financial Assets With No Allowance
as of September 30, 2020 Interest Income
Recognized
0 to 5 months $ 11,676,657 $ 26,040,593 $ 0 $ 0 $ 1,062,504
6 to 17 months 12,746,931 17,466,450 0 0 1,238,745
18 to 35 months 10,032,544 13,723,295 0 0 1,045,401
36 to 59 months 6,825,858 10,071,288 0 0 815,245
60+ months 29,250,038 44,293,545 0 0 3,624,427
Tax advance loans 1,203,653 41,573 0 0 0
Unearned interest, insurance and fees (18,733,073) (28,510,140) — —
Total $ 53,002,608 $ 83,126,604 $ 0 $ 0 $ 7,786,322


	Nonaccrual Financial Assets
Customer Tenure	As of September 30, 2021		As of March 31, 2021		Financial Assets 61 Days or More Past Due, Not on Nonaccrual Status		Nonaccrual Financial Assets With No Allowance as of September 30, 2021		Interest Income Recognized
0 to 5 months	$	20,180,823	$	17,256,243	$	—	$	—	$	565,222
6 to 17 months	13,153,496		13,153,363		—		—		825,557
18 to 35 months	15,190,793		12,048,132		—		—		909,227
36 to 59 months	8,807,368		8,156,159		—		—		653,087
60+ months	31,343,442		31,947,750		—		—		2,588,262

Tax advance loans	654,037		46,269		—		—		—
Unearned interest, insurance and fees	(23,697,282)		(20,889,617)		—		—
Total	$	65,632,677	$	61,718,299	$	—	$	—	$	5,541,355

1721

Table of Contents

Under the prior incurred loss methodology, loss contingencies were evaluated as: probable, reasonably possible, or remote. If, at the date of financial statement presentation, information was available that indicated an asset had been impaired and the amount of loss could be reasonably estimated, then an allowance for that loss could be recorded. Recording an allowance for a loss that was considered reasonably possible or remote was not permitted. With the adoption of ASC 326, the Company considers the lifetime potential for losses at the point of origination and records an allowance for that potential, at that point in time, removing the necessity of differentiation between the three loss contingency concepts and impairment. The following disclosures are presented under previously applicable GAAP.

~~The following is a summary of loans individually and collectively evaluated for impairment for the periods indicated:~~

March 31, 2020 Loans individually
evaluated for
impairment
(impaired loans) Loans collectively
evaluated for
impairment Total
Gross loans in bankruptcy, excluding contractually delinquent $ 5,165,752 0 5,165,752
Gross loans contractually delinquent 70,719,727 0 70,719,727
Loans not contractually delinquent and not in bankruptcy 0 1,133,985,887 1,133,985,887
Gross loan balance 75,885,479 1,133,985,887 1,209,871,366
Unearned interest and fees (16,848,762) (292,131,962) (308,980,724)
Net loans 59,036,717 841,853,925 900,890,642
Allowance for credit losses (54,090,509) (42,397,347) (96,487,856)
Loans, net of allowance for credit losses $ 4,946,208 799,456,578 804,402,786

September 30, 2019 Loans individually
evaluated for
impairment
(impaired loans) Loans collectively
evaluated for
impairment Total
Gross loans in bankruptcy, excluding contractually delinquent $ 5,919,237 0 5,919,237
Gross loans contractually delinquent 67,515,456 0 67,515,456
Loans not contractually delinquent and not in bankruptcy 0 1,200,712,101 1,200,712,101
Gross loan balance 73,434,693 1,200,712,101 1,274,146,794
Unearned interest and fees (15,408,232) (318,918,117) (334,326,349)
Net loans 58,026,461 881,793,984 939,820,445
Allowance for losses (52,358,792) (49,110,521) (101,469,313)
Loans, net of allowance for losses $ 5,667,669 832,683,463 838,351,132

~~The average net balance of impaired loans was $53.4 million for the six-month period ended September 30, 2019. It is not practical to compute the amount of interest earned on impaired loans.~~

~~Table of Contents~~

~~The following is an assessment of the credit quality of loans for the periods indicated:~~

March 31, 2020 September 30, 2019
Credit risk
Consumer loans- non-bankrupt accounts $ 1,203,552,152 $ 1,266,666,753
Consumer loans- bankrupt accounts 6,319,214 7,480,041
Total gross loans $ 1,209,871,366 $ 1,274,146,794
Consumer credit exposure
Credit risk profile based on payment activity, performing $ 1,104,130,714 $ 1,171,654,200
Contractual non-performing, 61 or more days delinquent (1)
105,740,652 102,492,594
Total gross loans $ 1,209,871,366 $ 1,274,146,794
Credit risk profile based on customer type
New borrower $ 124,800,193 $ 152,893,420
Former borrower 127,108,125 143,234,099
Refinance 935,448,882 954,842,006
Delinquent refinance 22,514,166 23,177,269
Total gross loans $ 1,209,871,366 $ 1,274,146,794

~~(1)Loans in non-accrual status.~~

~~The following is a summary of the past due receivables as of:~~

March 31, 2020 September 30, 2019
Contractual basis:
30-60 days past due $ 49,137,102 $ 55,199,165
61-90 days past due 35,020,925 34,977,138
91 days or more past due 70,719,727 67,515,456
Total $ 154,877,754 $ 157,691,759
Percentage of period-end gross loans receivable 12.8 % 12.4 %
Recency basis:
30-60 days past due $ 48,206,910 $ 54,101,357
61-90 days past due 28,450,942 30,534,482
91 days or more past due 50,669,837 51,155,873
Total $ 127,327,689 $ 135,791,712
Percentage of period-end gross loans receivable 10.5 % 10.7 %

NOTE 6 – LEASES

Accounting Policies and Matters Requiring Management's Judgment

When determining the economic life of a lease the Company adopts a convention of applying an economic life equal to the useful life as specified in its accounting policy. Refer to Note 1, “Property and Equipment,” to the Company's Annual Report on Form 10-K for the fiscal year ended March 31, ~~2020~~2021 for a description of the Company's accounting policy regarding useful lives.

~~Table of Contents~~

The Company uses its effective annual interest rate, adjusted for certain assumptions, as the discount rate when evaluating leases under Topic 842. Management applies the adjusted effective annual interest rate to leases entered for the entirety of the subsequent year.

Based on its historical practice, the Company believes it is reasonably certain to exercise a given option associated with a given office space lease. Therefore, the Company classifies all lease options for office space as “reasonably certain” unless it has specific knowledge to the contrary for a given lease. The Company does not believe it is reasonably certain to exercise any options associated with its office equipment leases.

Periodic Disclosures

The Company's leases consist of real estate leases for office space as well as office equipment leases, ~~all~~most of which were classified as operating at September 30, ~~2020.~~2021. Both the real estate and office equipment leases range from three years to five years, and generally contain options to extend which mirror the original terms of the lease.

The following table reports information about the Company's lease cost for the three and six months ended September 30, ~~2020~~2021 and ~~2019:~~

Three months ended September 30, Six months ended September 30,
2020 2019 2020 2019
Lease Cost
Operating lease cost $ 7,018,273 $ 6,422,771 $ 14,087,935 $ 12,653,350
Short-term lease cost 0 0 1,800 0
Variable lease cost 897,723 810,078 1,777,373 1,614,685
Total lease cost $ 7,915,996 $ 7,232,849 $ 15,867,108 $ 14,268,035
2020:


	Three months ended September 30,				Six months ended September 30,
	2021		2020		2021		2020
Lease Cost
Finance lease cost	$	107,812	$	117,764	$	218,241	$	237,895
Amortization of right-of-use assets	101,906		101,906		203,812		203,812
Interest on lease liabilities	5,906		15,858		14,429		34,083
Operating lease cost	$	6,873,545	$	7,018,273	$	13,697,991	$	14,087,935
Short-term lease cost	—		—		—		1,800
Variable lease cost	854,470		897,723		1,786,833		1,777,373

Total lease cost	$	7,943,639	$	8,151,524	$	15,921,306	$	16,342,898

Table of Contents

The following table reports other information about the Company's leases for the three and six months ended September 30, ~~2020~~2021 and ~~2019:~~2020:

Three months ended September 30, Six months ended September 30,
2020 2019 2020 2019
Other Lease Information
Cash paid for amounts included in the measurement of lease liabilities $ 6,912,319 $ 6,270,796 $ 13,849,168 $ 12,303,194
Right-of-use assets obtained in exchange for new operating lease liabilities(1)
$ 3,509,052 $ 5,800,042 $ 7,632,494 $ 23,293,291
Weighted average remaining lease term — operating leases 7.2 years 5.1 years 7.2 years 5.1 years
Weighted-average discount rate — operating leases 6.5 % 6.7 % 6.5 % 6.7 %

~~(1)~~ In May 2019 the Company executed a new 10 year lease agreement for its corporate headquarters in Greenville, South Carolina. The lease payments commenced in December 2019; however, execution of the lease agreement triggered recognition of the right-of-use asset in May 2019 for approximately $15.6 million.


	Three months ended September 30,						Six months ended September 30,
	2021			2020			2021			2020
Other Lease Information
Cash paid for amounts included in the measurement of lease liabilities	$	6,996,542		$	7,075,461		$	13,970,899		$	14,175,452
Operating cash flows from finance leases	5,906			15,858			14,429			34,083
Operating cash flows from operating leases	6,843,534			6,912,319			13,654,749			13,849,168
Financing cash flows from finance leases	147,102			147,284			301,721			292,201
Right-of-use assets obtained in exchange for new finance lease liabilities	—			—			—			—
Right-of-use assets obtained in exchange for new operating lease liabilities	$	5,620,818		$	3,509,052		$	9,076,694		$	7,632,494
Weighted-average remaining lease term — finance leases	0.6 years			1.2 years			0.6 years			1.2 years
Weighted average remaining lease term — operating leases	7.1 years			7.2 years			7.1 years			7.2 years
Weighted-average discount rate (monthly) — finance leases	6.3		%	6.4		%	6.3		%	6.4		%
Weighted-average discount rate — operating leases	6.2		%	6.5		%	6.2		%	6.5		%

~~Table of Contents~~

The following table reports information about the maturity of the Company's operating and finance leases as of September 30, ~~2020:~~

~~September 30, 2020~~

~~Operating lease liability maturity analysis~~

~~Fiscal 2021~~

~~13,573,314~~

~~Fiscal 2022~~

~~24,553,898~~

~~Fiscal 2023~~

~~20,165,601~~

~~Fiscal 2024~~

~~16,082,881~~

~~Fiscal 2025~~

~~11,719,843~~

~~Fiscal 2026~~

~~8,076,744~~

~~Thereafter~~

~~29,578,070~~

~~Total undiscounted lease liability~~

~~123,750,351~~

~~Imputed interest~~

~~27,268,744~~

~~Total discounted lease liability~~

~~96,481,607~~

2021:


	Operating Lease		Finance Lease
Fiscal 2022	$	13,122,453	$	203,565
Fiscal 2023	23,020,199		80,067
Fiscal 2024	18,818,997		—
Fiscal 2025	14,192,214		—
Fiscal 2026	10,213,933		—
Fiscal 2027	6,121,179		—
Thereafter	27,238,079		—
Total undiscounted lease liability	112,727,054		283,632
Imputed interest	22,972,648		—
Total discounted lease liability	$	89,754,406	$	283,632

The Company had no leases with related parties at September 30, ~~2020.~~2021 or March 31, 2021.

Table of Contents

NOTE 7 – AVERAGE SHARE INFORMATION

The following is a summary of the basic and diluted average common shares outstanding:


		Three months ended September 30,		Six months ended September 30,			Three months ended September 30,		Six months ended September 30,
		2020	2019	2020	2019		2021	2020	2021	2020
Basic:	Basic:					Basic:
Weighted average common shares outstanding (denominator)	Weighted average common shares outstanding (denominator)	6,680,969	7,807,229	6,773,704	8,155,263	Weighted average common shares outstanding (denominator)	6,083,255	6,680,969	6,120,665	6,773,704

Diluted:	Diluted:					Diluted:
Weighted average common shares outstanding	Weighted average common shares outstanding	6,680,969	7,807,229	6,773,704	8,155,263	Weighted average common shares outstanding	6,083,255	6,680,969	6,120,665	6,773,704
Dilutive potential common shares	Dilutive potential common shares	172,456	394,368	116,561	376,749	Dilutive potential common shares	329,824	172,456	313,546	116,561
Weighted average diluted shares outstanding (denominator)	Weighted average diluted shares outstanding (denominator)	6,853,425	8,201,597	6,890,265	8,532,012	Weighted average diluted shares outstanding (denominator)	6,413,079	6,853,425	6,434,211	6,890,265

Options to purchase ~~637,322~~426,382 and ~~655,462~~637,322 shares of common stock at various prices were outstanding during the three months ended September 30, ~~2020~~2021 and ~~2019~~2020 respectively, but were not included in diluted shares outstanding because the option exercise price exceeded the market value of the shares.

Options to purchase ~~639,654~~459,785 and ~~669,374~~639,654 shares of common stock at various prices were outstanding during the six months ended September 30, ~~2020~~2021 and ~~2019~~2020 respectively, but were not included in diluted shares outstanding because the option exercise price exceeded the market value of the shares.

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NOTE 8 – STOCK-BASED COMPENSATION

Stock Incentive Plans

The Company has ~~a 2005 Stock Option Plan,~~ a 2008 Stock Option Plan, a 2011 Stock Option Plan and a 2017 Stock Incentive Plan for the benefit of certain non-employee directors, officers, and key employees. Under these plans, a total of ~~4,350,000~~3,350,000 shares of common stock have been authorized and reserved for issuance pursuant to grants approved by the Compensation Committee of the Board of Directors. Stock options granted under these plans have a maximum duration of 10 years, may be subject to certain vesting requirements, which are generally three to six years for officers, non-employee directors, and key employees, and are priced at the market value of the Company's common stock on the option's grant date. At September 30, ~~2020,~~2021, there were a total of ~~207,224~~156,166 shares of common stock available for grant under the plans.

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Stock-based compensation is recognized as provided under FASB ASC Topic 718-10 and FASB ASC Topic 505-50. FASB ASC Topic 718-10 requires all share-based payments to employees, including grants of employee stock options, to be recognized as compensation expense over the requisite service period (generally the vesting period) in the consolidated financial statements based on their grant date fair values. The Company has applied the Black-Scholes valuation model in determining the grant date fair value of the stock option awards. Compensation expense is recognized only for those options expected to vest.

Long-term Incentive Program and Non-Employee Director Awards

On October 15, 2018, the Compensation Committee and Board approved and adopted a new long-term incentive program that sought to motivate and reward certain employees and to align management’s interest with shareholders' interest by focusing executives on the achievement of long-term results. The program is comprised of four components: Service Options, Performance Options, Restricted Stock, and Performance Shares.

Pursuant to this program, the Compensation Committee approved certain grants of Service Options, Performance Options, Restricted Stock and Performance Shares under the World Acceptance Corporation 2011 Stock Option Plan and the World Acceptance Corporation 2017 Stock Incentive Plan to certain employee directors, vice presidents of operations, vice presidents, senior vice presidents, and executive officers. Separately, the Compensation Committee approved certain grants of Service Options and Restricted Stock to certain of the Company's non-employee directors.

Under the long-term incentive program, up to 100% of the shares of restricted stock subject to the Performance Shares shall vest, if at all, based on the achievement of two trailing earnings per share performance targets established by the Compensation Committee that are based on earnings per share (measured at the end of each calendar quarter, commencing with the calendar quarter ending September 30, 2019) for the previous four calendar quarters. The Performance Shares are eligible to vest over the Performance Share Measurement Period and subject to each respective employee’s continued employment at the Company through the last day of the applicable Performance Share Measurement Period (or as otherwise provided under the terms of the applicable award agreement or applicable employment agreement).

The Performance Share performance targets are set forth below.


Trailing 4-Quarter EPS Targets for September 30, 2018 through March 31, 2025			Restricted Stock Eligible for Vesting (Percentage of Award)
$16.35			40%
$20.45			60%

The Restricted Stock awards vest in ~~six~~6 equal annual installments, beginning on the first anniversary of the grant date, subject to each respective employee’s continued employment at the Company through each applicable vesting date or otherwise provided under the terms of the applicable award agreement or applicable employment agreement.

The Service Options vest in ~~six~~6 equal annual installments, beginning on the first anniversary of the grant date, subject to each respective employee’s continued employment at the Company through each applicable vesting date or otherwise provided under the terms of the applicable award agreement or applicable employment agreement. The option price is equal to the fair market value of the common stock on the grant date and the Service Options have a 10-year term.

The Performance Options will fully vest if the Company attains the trailing earnings per share target over four consecutive calendar quarters occurring between September 30, 2018 and March 31, 2025 described below. Such performance target was established by the Compensation Committee and will be measured at the end of each calendar quarter commencing on

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September 30, 2019. The Performance Options are eligible to vest over the Option Measurement Period, subject to each respective employee’s continued employment at the Company through the last day of the Option Measurement Period or as otherwise provided under the terms of the applicable award agreement or applicable employment agreement. The option price is equal to the fair market value of the common stock on the grant date and the Performance Options have a 10-year term. The Performance Option performance target is set forth below.


Trailing 4-Quarter EPS Targets for September 30, 2018 through March 31, 2025			Options Eligible for Vesting (Percentage of Award)
$25.30			100%

Stock Options

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The weighted-average fair value at the grant date for options issued during the three months ended September 30, 2021 and 2020 was $100.55 and ~~2019 was~~ $47.61, ~~and $71.31,~~ respectively. The weighted-average fair value at the grant date for options issued during the six months ended September 30, 2021 and 2020 was $97.25 and ~~2019 was~~ $47.31, ~~and $70.69,~~ respectively.

Fair value was estimated at grant date using the weighted-average assumptions listed below:

Three months ended September 30, Six months ended September 30,
2020 2019 2020 2019
Dividend Yield 0% 0% 0% 0%
Expected Volatility 56.19% 51.25% 56.17% 50.90%
Average risk-free rate 0.35% 1.54% 0.36% 1.70%
Expected Life 6.2 years 6.5 years 6.2 years 6.6 years


	Three months ended September 30,		Six months ended September 30,
	2021	2020	2021	2020

Dividend Yield	—%	—%	—%	—%
Expected Volatility	57.86%	56.19%	58.35%	56.17%
Average risk-free rate	0.83%	0.35%	0.89%	0.36%
Expected Life	6.1 years	6.2 years	6.1 years	6.2 years

The expected stock price volatility is based on the historical volatility of the Company's common stock for a period approximating the expected life. The expected life represents the period of time that options are expected to be outstanding after the grant date. The risk-free rate reflects the interest rate at grant date on zero coupon U.S. governmental bonds having a remaining life similar to the expected option term.

Option activity for the six months ended September 30, ~~2020~~2021 was as follows:


		Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value			Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value

Options outstanding, beginning of period	Options outstanding, beginning of period	646,728	$	88.30				Options outstanding, beginning of period	500,168	$	93.89
Granted during period	Granted during period	17,530	90.72					Granted during period	17,899	180.33
Exercised during period	Exercised during period	(15,571)	64.66					Exercised during period	(111,122)	78.14
Forfeited during period	Forfeited during period	(11,880)	100.79					Forfeited during period	(7,750)	100.79
Expired during period	Expired during period	(300)	76.51					Expired during period	—	—
Options outstanding, end of period	Options outstanding, end of period	636,507	$	88.71	6.1 years	$	11,209,268	Options outstanding, end of period	399,195	$	102.02	6.8 years	$	34,964,006
Options exercisable, end of period	Options exercisable, end of period	309,398	$	75.75	4.0 years	$	9,228,750	Options exercisable, end of period	103,323	$	85.31	4.6 years	$	10,773,204

The aggregate intrinsic value reflected in the table above represents the total pre-tax intrinsic value (the difference between the closing stock price on September 30, ~~2020~~2021 and the exercise price, multiplied by the number of in-the-money options) that would have been received by option holders had all option holders exercised their options as of September 30, ~~2020.~~2021. This amount will change as the market price of the common stock changes. The total intrinsic value of options exercised during the periods ended September 30, ~~2020~~2021 and ~~2019~~2020 was as follows:

September 30,
2020 September 30,
2019
Three months ended $ 496,721 $ 1,515,230
Six months ended $ 496,721 $ 4,350,557

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	September 30, 2021		September 30, 2020

Three months ended	$	9,519,593	$	496,721
Six months ended	$	11,541,269	$	496,721

As of September 30, ~~2020,~~2021, total unrecognized stock-based compensation expense related to non-vested stock options amounted to approximately ~~$9.0~~$7.8 million, which is expected to be recognized over a weighted-average period of approximately ~~3.8~~3.2 years.

Restricted Stock

During the first six months of fiscal ~~2021,~~2022, the Company granted ~~29,215~~4,062 shares of restricted stock (which are equity classified) to certain vice presidents, senior vice presidents, executive officers, and non-employee directors with a grant date weighted average fair value of ~~$92.44~~$188.38 per share.

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During fiscal ~~2020,~~2021, the Company granted ~~11,223~~52,735 shares of restricted stock (which are equity classified) to certain vice presidents with a grant date weighted average fair value of ~~$90.23~~$106.28 per share.

Compensation expense related to restricted stock is based on the number of shares expected to vest and the fair market value of the common stock on the grant date. The Company recognized compensation expense of ~~$7.5~~$3.4 million and ~~$13.4~~$3.9 million for the three months ended September 30, 2021 and 2020, respectively, which is included as a component of general and administrative expenses in the Company’s consolidated statements of operations. The Company recognized compensation expense of $6.6 million and $7.5 million for the six months ended September 30, ~~2020~~2021 and ~~2019,~~2020, respectively, which is included as a component of general and administrative expenses in the Company’s consolidated statements of operations.

As of September 30, ~~2020,~~2021, there was approximately ~~$32.3~~$21.4 million of unrecognized compensation cost related to unvested restricted stock awards, which is expected to be recognized over the next ~~3.0~~2.6 years based on current estimates.

A summary of the status of the Company’s restricted stock as of September 30, ~~2020,~~2021, and changes during the six months ended September 30, ~~2020,~~2021, are presented below:


		Shares	Weighted Average Fair Value at Grant Date			Shares	Weighted Average Fair Value at Grant Date

Outstanding at March 31, 2020		705,254	$	101.47
Outstanding at March 31, 2021					Outstanding at March 31, 2021	614,739	$	101.99
Granted during the period	Granted during the period	29,215	92.44		Granted during the period	4,062	188.38
Vested during the period	Vested during the period	(15,568)	100.41		Vested during the period	(2,808)	118.21
Forfeited during the period	Forfeited during the period	(60,000)	100.79		Forfeited during the period	—	—
Outstanding at September 30, 2020		658,901	$	101.16
Outstanding at September 30, 2021					Outstanding at September 30, 2021	615,993	$	102.49

Total Stock-Based Compensation

Total stock-based compensation included as a component of net income during the three and six month periods ended September 30, ~~2020~~2021 and ~~2019~~2020 was as follows:


		Three months ended September 30,				Six months ended September 30,					Three months ended September 30,				Six months ended September 30,
		2020		2019		2020		2019			2021		2020		2021		2020
Stock-based compensation related to equity classified awards:	Stock-based compensation related to equity classified awards:									Stock-based compensation related to equity classified awards:
Stock-based compensation related to stock options	Stock-based compensation related to stock options	$	1,086,239	$	1,604,772	$	2,132,974	$	3,226,110	Stock-based compensation related to stock options	$	909,350	$	1,086,239	$	1,852,977	$	2,132,974
Stock-based compensation related to restricted stock, net of adjustments and exclusive of cancellations	Stock-based compensation related to restricted stock, net of adjustments and exclusive of cancellations	3,940,404		6,685,497		7,477,269		13,376,367		Stock-based compensation related to restricted stock, net of adjustments and exclusive of cancellations	3,355,698		3,940,404		6,596,161		7,477,269
Total stock-based compensation related to equity classified awards	Total stock-based compensation related to equity classified awards	$	5,026,643	$	8,290,269	$	9,610,243	$	16,602,477	Total stock-based compensation related to equity classified awards	$	4,265,048	$	5,026,643	$	8,449,138	$	9,610,243

NOTE 9 – ACQUISITIONS

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The Company evaluates each set of assets and activities it acquires to determine if the set meets the definition of a business according to FASB ASC Topic 805-10-55. Acquisitions meeting the definition of a business are accounted for as a business combination while all other acquisitions are accounted for as asset purchases.

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The following table sets forth the Company's acquisition activity for the six months ended September 30, ~~2020~~2021 and ~~2019.~~

Six months ended September 30,
2020 2019
Acquisitions:
Number of branches acquired through business combinations 0 37
Number of loan portfolios acquired through asset purchases 15 134
Total acquisitions 15 171
Purchase price $ 6,936,938 $ 61,570,642
Tangible assets:
Loans receivable, net 5,786,847 46,952,848
Property and equipment 0 69,000
Total tangible assets 5,786,847 47,021,848
Excess of purchase prices over carrying value of net tangible assets $ 1,150,091 $ 14,548,794
Customer lists $ 1,070,091 13,466,111
Non-compete agreements $ 80,000 855,000
Goodwill $ 0 227,683
2020.


	Six months ended September 30,
	2021		2020
Acquisitions:
Number of branches acquired through business combinations	—		—
Number of loan portfolios acquired through asset purchases	50		15
Total acquisitions	50		15

Purchase price	$	10,859,984	$	6,936,938

Tangible assets:
Loans receivable, net	9,631,112		5,786,847
Property and equipment	—		—
Total tangible assets	9,631,112		5,786,847

Excess of purchase prices over carrying value of net tangible assets	$	1,228,872	$	1,150,091

Customer lists	$	952,872	1,070,091
Non-compete agreements	$	276,000	80,000
Goodwill	$	—	—

Acquisitions that are accounted for as business combinations typically result in one or more new branches. In such cases, the Company typically retains the existing employees and the branch location from the acquisition. The purchase price is allocated to the tangible assets and intangible assets acquired based upon their estimated fair market values at the acquisition date. The remainder is allocated to goodwill.

Acquisitions that are accounted for as asset purchases are typically limited to acquisitions of loan portfolios. The purchase price is allocated to the tangible assets and intangible assets acquired based upon their estimated fair market values at the acquisition date. In an asset purchase, no goodwill is recorded.

The Company’s acquisitions include tangible assets (generally loans and furniture and equipment) and intangible assets (generally non-compete agreements, customer lists, and goodwill), both of which are recorded at their fair values, which are estimated pursuant to the processes described below.

Acquired loans are valued at the net loan balance. Given the short-term nature of these loans, generally eight months, and that these loans are priced at current rates, management believes the net loan balances approximate their fair value. Under CECL, acquired loans are included in the reserve calculations for all other loan types (excluding TALs). Management includes recent acquisition activity compared to historical activity when considering reasonable and supportable forecasts as it relates to assessing the adequacy of the allowance for expected credit losses. The Company did not acquire any loans that would qualify as PCD's during the period.

Furniture and equipment are valued at the specific purchase price as agreed to by both parties at the time of acquisition, which management believes approximates their fair values.

Non-compete agreements are valued at the stated amount paid to the other party for these agreements, which the Company believes approximates their fair value.

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Customer lists are valued with a valuation model that utilizes the Company’s historical data to estimate the value of any acquired customer lists. Customer lists are allocated at a branch level and are evaluated for impairment at a branch level when a triggering event occurs in accordance with FASB ASC Topic 360-10-05. If a triggering event occurs, the impairment loss to the customer list is generally the remaining unamortized customer list balance. In most acquisitions, the original fair value of the

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customer list allocated to a branch is less than $100,000, and management believes that in the event a triggering event were to occur, the impairment loss to an unamortized customer list would be immaterial.

The results of all acquisitions have been included in the Company’s Consolidated Financial Statements since the respective acquisition date. The pro forma impact of these branches as though they had been acquired at the beginning of the periods presented would not have a material effect on the results of operations as reported.

NOTE 10 – DEBT

Senior Notes Payable; Revolving Credit Facility

At September 30, ~~2020~~2021, the Company's senior notes payable consisted of a $685.0 million senior revolving credit facility. The revolving credit facility ~~which includes an~~was amended in connection with the Company’s Notes offering (described below) on September 27, 2021 to permit the issuance of the Notes described below and increase the amount permitted under the accordion feature ~~permitting the maximum aggregate commitments to increase to~~from $685.0 million ~~provided that certain conditions are met.~~to $785.0 million. At September 30, ~~2020 $424.9~~2021, $275.7 million was outstanding under the Company's revolving credit facility, not including a $300.0 thousand outstanding standby letter of credit related to workers compensation. To the extent that the letter of credit is drawn upon, the disbursement will be funded by the credit facility. There are no amounts due related to the letter of credit as of September 30, ~~2020.~~2021. The letter of credit expires on December 31, ~~2020;~~2021; however, it automatically extends for one year on the expiration date. Subject to a borrowing base formula, the Company may borrow at the rate of LIBOR plus an applicable margin ~~between 3.0% and 4.0% based on certain EBITDA related metrics set forth in the revolving credit agreement, which are determined and adjusted on a monthly basis~~of 3.5% with a minimum rate of ~~4.0%~~4.5%. The revolving credit facility has a commitment fee of 0.50% per annum on the unused portion of the commitment. Commitment fees on the unused portion of the borrowing totaled ~~$0.8~~$0.6 million and ~~$0.7~~$0.8 million for the six months ended September 30, ~~2020~~2021 and ~~2019,~~2020, respectively. The amended and restated revolving credit agreement provides for a process to transition to a new benchmark interest rate from ~~LIBOR, if necessary.~~LIBOR.

For the six months ended September 30, ~~2020~~2021 and fiscal year ended March 31, ~~2020,~~2021, the Company’s effective interest rate, including the commitment fee and amortization of debt issuance costs, was ~~5.8%~~5.0% annualized and 5.8%, respectively, and the unused amount available under the revolver at September 30, ~~2020~~2021 was ~~$157.0~~$409.0 million. ~~The Company also had $102.8 million that may become available under the revolving credit facility if it grows the net eligible finance receivables.~~ Borrowings under the revolving credit facility mature on June 7, ~~2022.~~2024.

Substantially all of the Company’s assets are pledged as collateral for borrowings under the revolving credit agreement.

Senior Unsecured Notes Payable

On September 27, 2021, we issued $300 million in aggregate principal amount of 7.0% senior notes due 2026 (the “Notes”). The Notes were sold in a private placement in reliance on Rule 144A and Regulation S under the Securities Act of 1933, as amended. The Notes are unconditionally guaranteed, jointly and severally, on a senior unsecured basis by all of the Company’s existing and certain of its future subsidiaries that guarantee the revolving credit facility. Interest on the notes is payable semi-annually in arrears on May 1 and November 1 of each year, commencing May 1, 2022. At any time prior to November 1, 2023, the Company may redeem the Notes, in whole or in part, at a redemption price equal to 100% of the principal amount plus a make-whole premium, as described in the indenture, plus accrued and unpaid interest, if any, to, but not including, the date of redemption. At any time on or after November 1, 2023, the Company may redeem the Notes at redemption prices set forth in the indenture, plus accrued and unpaid interest, if any, to, but not including, the date of redemption. In addition, at any time prior to November 1, 2023, the Company may use the proceeds of certain equity offerings to redeem up to 40.0% of the aggregate principal amount of the Notes issued under the indenture at a redemption price equal to 107.0% of the principal amount of Notes redeemed, plus accrued and unpaid interest, if any, to, but not including, the date of redemption.

We used the net proceeds from this offering to repay a portion of the outstanding indebtedness under our revolving credit facility and for general corporate purposes.

Debt Covenants

The agreement governing the Company’s revolving credit facility contains affirmative and negative covenants, including covenants that generally restrict the ability of the Company and its subsidiaries to, among other things, incur or guarantee indebtedness, incur liens, pay dividends and repurchase or redeem capital stock, dispose of assets, engage in mergers and consolidations, make acquisitions or other investments, redeem or prepay subordinated debt, amend subordinated debt

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documents, make changes in the nature of its business, and engage in transactions with affiliates. The agreement also contains financial covenants, including: (i) a minimum consolidated net worth of ~~$325.0 million;~~$325,000,000; (ii) a minimum fixed charge coverage ratio of ~~(a) 2.25 to 1.0 for the fiscal quarter ending September 30, 2020 and (b)~~ 2.75 to 1.0 ~~for each fiscal quarter thereafter;~~ (iii) a maximum ratio of total debt to consolidated adjusted net worth of ~~2.0~~2.5 to 1.0; (iv) as of the end of each fiscal quarter, provision for credit losses for the four fiscal quarters then ending shall equal or exceed the net loan charge-off for the corresponding period (any shortfalls are required to be deducted in the determination of net income and ~~consolidated adjusted net worth); and (v)~~(iv) a maximum collateral performance indicator of ~~23.0%~~24.0%, as of the end of each calendar month. The collateral performance indicator is equal to the sum of (a) a three-month rolling average rate of receivables at least sixty days past due and (b) an eight-month rolling average net charge-off rate. The agreement allows the Company to incur subordinated debt that matures after the termination date for the revolving credit facility and that contains specified subordination terms, subject to limitations on amount imposed by the financial covenants under the agreement.

The Company was in compliance with these covenants at September 30, ~~2020~~2021 and March 31, ~~2020~~2021 and does not believe that these covenants will materially limit its business and expansion strategy.

The agreement contains events of default including, without limitation, nonpayment of principal, interest or other obligations, violation of covenants, misrepresentation, cross-default and cross-acceleration to other debt, bankruptcy and other insolvency events, judgments, certain ERISA events, actual or asserted invalidity of loan documentation, invalidity of subordination provisions of subordinated debt, certain changes of control of the Company, and the occurrence of certain regulatory events (including the entry of any stay, order, judgment, ruling or similar event related to the Company’s or any of its subsidiaries’ originating,

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holding, pledging, collecting or enforcing its eligible finance receivables that is material to the Company or any subsidiary) which remains unvacated, undischarged, unbonded or unstayed by appeal or otherwise for a period of 60 days from the date of its entry and is reasonably likely to cause a material adverse change. If it is determined that a violation of any applicable law has occurred, such violation may give rise to an event of default under our credit agreement if such violation were to result in a material adverse ~~effect~~change on our business, ~~properties,~~operations, results of operations, assets, liabilities, or condition (financial or otherwise), or a material impairment of the Company’s and the subsidiaries’ ability to perform their obligations under the agreement or related documents, or if the amount of any settlement, penalties, fines, or other payments resulted in the Company failing to satisfy any financial covenants.

The indenture governing the Notes contains certain covenants that, among other things, limit the Company’s ability and the ability of its restricted subsidiaries to (i) incur additional indebtedness or issue certain disqualified stock and preferred stock; (ii) pay dividends or distributions or redeem or purchase capital stock; (iii) prepay subordinated debt or make certain investments; (iv) transfer and sell assets; (v) create or permit to exist liens; (vi) enter into agreements that restrict dividends, loans and other distributions from their subsidiaries; (vii) engage in a merger, consolidation or sell, transfer or otherwise dispose of all or substantially all of their assets; and (viii) engage in transactions with affiliates. However, these covenants are subject to a number of important detailed qualifications and exceptions.

NOTE 11 – INCOME TAXES

As of September 30, ~~2020~~2021 and March 31, ~~2020,~~2021, the Company had ~~$6.0~~$3.3 million and ~~$5.8~~$3.1 million, respectively, of total gross unrecognized tax benefits including interest. Approximately ~~$5.4~~$2.7 million and ~~$5.2~~$2.6 million, respectively, represent the amount of net unrecognized tax benefits that are permanent in nature and, if recognized, would affect the annual effective tax rate. At September 30, ~~2020,~~2021, approximately ~~$2.9~~$0.7 million of gross unrecognized tax benefits are expected to be resolved during the next twelve months through the expiration of the statute of limitations and settlement with taxing authorities. The Company’s continuing practice is to recognize interest and penalties related to income tax matters in income tax expense. As of September 30, ~~2020,~~2021, the Company had approximately ~~$1.6~~$1.4 million accrued for gross interest, of which ~~$154.3~~$118.4 thousand was accrued during the six months ended September 30, ~~2020.~~2021.

The Company is subject to U.S. income taxes, as well as various other state and local jurisdictions. With the exception of a few states, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2016, although carryforward attributes that were generated prior to 2016 may still be adjusted upon examination by the taxing authorities if they either have been or will be used in a future period.

The Company’s effective income tax rate ~~decreased to 21.9%~~totaled 11.7% for the quarter ended September 30, ~~2020~~2021 compared to ~~34.3%~~21.9% for the prior year quarter. The decrease is primarily due to the ~~net effect of the historic~~permanent tax ~~credit accounting being recorded~~benefit related to non-qualified stock option exercises as a discrete ~~event~~item in the current quarter, the recognition of Federal Historic Tax Credits in the current quarter and lower than estimated Federal Historic Tax Credits for fiscal 2020 with the provision to return adjustment being treated as a discrete item in the prior year ~~quarter,~~quarter. This was partially offset by an increase in the disallowed executive compensation under Section 162(m) in the ~~prior year~~current quarter and the recognition of the permanent tax benefit related to the exclusion of life insurance proceeds in the ~~current~~prior year quarter.

NOTE 12 – COMMITMENTS AND CONTINGENCIES

~~Resolution of Mexico Investigation~~

As previously disclosed, the Company retained outside legal counsel and forensic accountants to conduct an investigation of its operations in Mexico, focusing on the legality under the FCPA, and certain local laws of certain payments related to loans, the maintenance of the Company’s books and records associated with such payments, and the treatment of compensation matters for certain employees. The investigation addressed whether and to what extent improper payments, which may violate the FCPA and other local laws, were made approximately between 2010 and 2017 by or on behalf of WAC de Mexico, to government officials in Mexico relating to loans made to unionized employees. The Company voluntarily contacted the SEC and the DOJ in June 2017 to advise both agencies that an internal investigation was underway and that the Company intended to cooperate with both agencies. The SEC issued a formal order of investigation. The Company has cooperated with both agencies.

~~On August 6, 2020, the Company announced that it reached resolution with both the SEC and the DOJ regarding allegations primarily involving the Company’s former subsidiary in Mexico.~~

In connection with the resolution of the investigations, the Company agreed to the terms contained in a Declination Letter with the DOJ, dated August 5, 2020 (the “Declination Letter”). Pursuant to the terms of the Declination Letter, the DOJ declined to prosecute the Company and closed its investigation into the Company citing as the bases for this decision, among other things, the following: prompt, voluntary self-disclosure of the misconduct; full and proactive cooperation in this matter (including its provision of all known relevant facts about the misconduct); and full remediation, including the additional FCPA training added to the Company’s compliance program, separation from executives under whom the misconduct took place; and discontinuing relationships with third parties in Mexico involved in the misconduct.

The SEC approved the Offer of Settlement on August 6, 2020 and issued an Order Instituting Cease-and-Desist Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934, Making Findings, and Imposing a Cease-and-Desist Order (the “SEC Order”). Pursuant to the terms of the SEC Order, the Company consented to 1) cease and desist from committing or

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causing any violations and any future violations of Sections 30A, 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act of 1934, and 2) pay, within fourteen days, disgorgement, prejudgment interest and civil penalties totaling $21,726,000 to the SEC. During the quarter ended September 30, 2020, the Company paid $21.7 million for such matters.

The Company could still face fines, sanctions, and other penalties from authorities in Mexico, as well as third-party claims by shareholders and/or other stakeholders of the Company. Disclosure of the disposition of the SEC and DOJ investigations could adversely affect the Company’s reputation and its ability to obtain new business or retain existing business from its current customers and potential customers, to attract and retain employees, and to access the capital markets. Further, under the terms of the stock purchase agreement among the Company and the Purchasers in connection with the sale of our Mexico operations, we are obligated to indemnify the Purchasers for claims and liabilities relating to certain investigations of our former Mexico operations, the Company, and its affiliates by the DOJ or the SEC that commenced prior to July 1, 2018. Any such indemnification claims could have a material adverse effect on our financial condition, including liquidity, and results of operations.

Derivative Litigation

On September 25, 2020, a shareholder filed a derivative complaint in South Carolina state court, Paul Parshall v. World Acceptance et al., against the Company as the nominal defendant and certain current and former directors and officers as defendants. Pointing to the Company’s resolution with the SEC and DOJ of the Mexico investigation ~~described above,~~previously disclosed, the complaint alleges violations of South Carolina law, including breaches of fiduciary duties and corporate waste, and that the Company has suffered damages as a result of those alleged breaches. The complaint seeks unspecified monetary damages from the individual defendants, equitable and/or injunctive relief, disgorgement of compensation from the individual defendants, and attorneys’ fees and costs. Because the complaint is derivative in nature, it does not seek monetary damages from the Company. However, the Company may be required to advance, and ultimately be responsible for, the legal fees and costs incurred by the individual defendants.

General

In addition, from time to time the Company is involved in litigation matters relating to claims arising out of its operations in the normal course of business.

Estimating an amount or range of possible losses resulting from litigation, government actions and other legal proceedings is inherently difficult and requires an extensive degree of judgment, particularly where the matters involve indeterminate claims for monetary damages, may involve fines, penalties or damages that are discretionary in amount, involve a large number of claimants or significant discretion by regulatory authorities, represent a change in regulatory policy or interpretation, present novel legal theories, are in the early stages of the proceedings, are subject to appeal or could result in a change in business practices. In addition, because most legal proceedings are resolved over extended periods of time, potential losses are subject to change due to, among other things, new developments, changes in legal strategy, the outcome of intermediate procedural and substantive rulings and other parties’ settlement posture and their evaluation of the strength or weakness of their case against us. However, in light of the inherent uncertainties involved, an adverse outcome in one or more of these matters could materially and adversely affect the Company’s financial condition, results of operations or cash flows in any particular reporting period.

NOTE 13 – SUBSEQUENT EVENTS

Management is not aware of any significant events occurring subsequent to the balance sheet date that would have a material effect on the financial statements thereby requiring adjustment or disclosure.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Note Regarding Forward-Looking Information

This report on Form 10-Q, including "Management’s Discussion and Analysis of Financial Condition and Results of Operations," contains various "forward-looking statements," within the meaning of The Private Securities Litigation Reform Act of 1995, that are based on management’s beliefs and assumptions, as well as information currently available to management. Statements other than those of historical fact, as well as those identified by the words “anticipate,” “estimate,” “intend,” “plan,” “expect,” “believe,” “may,” “will,” “should,” "would," "could," "continue," "forecast," and any variation of the foregoing and similar expressions are forward-looking statements. Although the Company believes that the expectations reflected in any such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Any such statements are subject to certain risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, the Company’s actual financial results, performance or financial condition may vary materially from those anticipated, estimated or expected. Therefore, you should not rely on any of these forward-looking statements.

Among the key factors that could cause our actual financial results, performance or condition to differ from the expectations expressed or implied in such forward-looking statements are the following: the ongoing impact of the COVID-19 pandemic and the mitigation efforts by governments and related effects on our financial condition, business operations and liquidity, our customers, our employees, and the overall economy; recently enacted, proposed or future legislation and the manner in which it is ~~implemented, including the effect of~~implemented; changes in the U.S. tax ~~law;~~code; the nature and scope of regulatory authority, particularly discretionary authority, that may be exercised by regulators, including, but not limited to, the ~~SEC, DOJ, CFPB,~~Securities and Exchange Commission (SEC), Department of Justice, U.S. Consumer Financial Protection Bureau, and individual state regulators having jurisdiction over the Company; the unpredictable nature of regulatory proceedings and ~~litigation; risks associated with the COVID-19 pandemic and the mitigation efforts~~litigation, employee misconduct or misconduct by ~~governments and related effects on us, our customers, and employees; the sale of our Mexico subsidiaries, including claims or litigation resulting therefrom;~~third parties, uncertainties associated with management turnover and the effective succession of senior management; media and public characterization of consumer installment loans, labor unrest the impact of changes in accounting rules and regulations, or their interpretation or application, which could materially and adversely affect the Company’s reported consolidated financial statements or necessitate material delays or changes in the issuance of the Company’s audited consolidated financial statements; the Company's assessment of its internal control over financial reporting; changes in interest rates; risks relating to the acquisition or sale of assets or businesses or other strategic initiatives, including increased loan delinquencies or net charge-offs, the loss of key personnel, integration or migration issues, the failure to achieve anticipated synergies, increased costs of servicing, incomplete records, and retention of customers; risks inherent in making loans, including repayment risks and value of collateral; cybersecurity threats, including the potential misappropriation of assets or sensitive information, corruption of data or operational disruption; our dependence on debt and the potential impact of limitations in the Company’s amended revolving credit ~~facility;~~facility or other impacts on the Company's ability to borrow money on favorable terms, or at all; the timing and amount of revenues that may be recognized by the Company; changes in current revenue and expense trends (including trends affecting delinquency and charge-offs); the impact of extreme weather events and natural disasters; changes in the Company’s markets and general changes in the economy (particularly in the markets served by the Company). These and other risks are discussed in more detail in Part I, Item 1A “Risk Factors” in the Company's most recent annual report on Form 10-K for the fiscal year ended March 31, ~~2020~~2021 filed with the SEC, and in the Company’s other reports filed with, or furnished to, the SEC from time to time. The Company does not undertake any obligation to update any forward-looking statements it may make.

Results of Operations

The following table sets forth certain information derived from the Company's consolidated statements of operations and balance sheets (unaudited), as well as operating data and ratios, for the periods indicated:

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		Three months ended September 30,						Six months ended September 30,							Three months ended September 30,						Six months ended September 30,
		2020			2019			2020			2019				2021			2020			2021			2020
		(Dollars in thousands)													(Dollars in thousands)
Gross loans receivable	Gross loans receivable	$	1,109,366		$	1,274,147		$	1,109,366		$	1,274,147		Gross loans receivable	$	1,394,827		$	1,109,366		$	1,394,827		$	1,109,366
Average gross loans receivable (1)	Average gross loans receivable (1)	1,088,191			1,253,249			1,105,573			1,212,281			Average gross loans receivable (1)	1,314,397			1,088,191			1,230,307			1,105,573
Net loans receivable (2)	Net loans receivable (2)	819,666			939,820			819,666			939,820			Net loans receivable (2)	1,024,810			819,666			1,024,810			819,666
Average net loans receivable (3)	Average net loans receivable (3)	805,346			923,046			821,808			894,935			Average net loans receivable (3)	965,588			805,346			908,381			821,808

Expenses as a percentage of total revenue:	Expenses as a percentage of total revenue:													Expenses as a percentage of total revenue:
Provision for credit losses	Provision for credit losses	21.0		%	37.4		%	20.8		%	33.7		%	Provision for credit losses	30.5		%	21.0		%	27.0		%	20.8		%
General and administrative	General and administrative	60.5		%	55.4		%	59.2		%	57.2		%	General and administrative	54.4		%	60.5		%	55.5		%	59.2		%
Interest expense	Interest expense	4.7		%	4.5		%	4.6		%	3.8		%	Interest expense	4.9		%	4.7		%	4.6		%	4.6		%
Operating income as a % of total revenue (4)	Operating income as a % of total revenue (4)	18.5		%	7.2		%	20.0		%	9.1		%	Operating income as a % of total revenue (4)	15.1		%	18.5		%	17.5		%	20.0		%

Loan volume (5)	Loan volume (5)	647,024			729,775			1,110,507			1,481,923			Loan volume (5)	801,487			647,024			1,555,696			1,110,507

Net charge-offs as percent of average net loans receivable		14.5		%	16.8		%	16.4		%	16.6		%
Net charge-offs as percent of average net loans receivable on an annualized basis														Net charge-offs as percent of average net loans receivable on an annualized basis	10.5		%	14.5		%	10.9		%	16.4		%

Return on average assets (trailing 12 months)	Return on average assets (trailing 12 months)	4.5		%	5.8		%	4.5		%	5.8		%	Return on average assets (trailing 12 months)	8.6		%	4.5		%	8.6		%	4.5		%

Return on average equity (trailing 12 months)	Return on average equity (trailing 12 months)	11.8		%	10.5		%	11.8		%	10.5		%	Return on average equity (trailing 12 months)	22.4		%	11.8		%	22.4		%	11.8		%

Branches opened or acquired (merged or closed), net	Branches opened or acquired (merged or closed), net	(8)			16			(11)			41			Branches opened or acquired (merged or closed), net	(3)			(8)			(3)			(11)

Branches open (at period end)	Branches open (at period end)	1,232			1,234			1,232			1,234			Branches open (at period end)	1,202			1,232			1,202			1,232

(1) Average gross loans receivable ~~have~~has been determined by averaging month-end gross loans receivable over the indicated period, excluding tax advances.

(2) Net loans receivable is defined as gross loans receivable less unearned interest and deferred fees.

(3) Average net loans receivable ~~have~~has been determined by averaging month-end gross loans receivable less unearned interest and deferred fees over the indicated period, excluding tax advances.

(4) Operating income is computed as total revenue less provision for credit losses and general and administrative expenses.

(5) Loan volume includes all ~~loans generated~~loan balances originated by the Company. It does not include loans purchased through acquisitions.

~~Reclassification~~

The Company has made certain adjustments to its treatment of historic tax credits purchased during fiscal 2020 since it filed its Report on Form 10-Q for the quarterly period ended September 30, 2019. The adjustments correctly present the Company’s election to account for historic tax credits purchased using the income statement method in conjunction with the flow-through method. Under this approach, the deferred tax liability related to the difference between the book and tax basis in the underlying historic tax credit investment is recorded in the tax provision and reversed over the same period as the amortization of the historic tax credit investment. As a result of these corrections, the below line items have been adjusted as follows:

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CONSOLIDATED BALANCE SHEET
As of September 30, 2019
As originally filed Adjustments As revised
Deferred income taxes, net $ 31,898,939 $ (1,706,827) $ 30,192,112
Other assets, net 16,151,630 8,681,915 24,833,545
Total assets 1,077,816,368 6,975,088 1,084,791,456
Income taxes payable 1,521,276 9,236,080 10,757,356
Accounts payable and accrued expenses 42,389,238 (554,165) 41,835,073
Total liabilities 682,872,331 8,681,915 691,554,246
Shareholders' equity 394,944,037 (1,706,827) 393,237,210
Total liabilities and shareholders' equity $ 1,077,816,368 $ 6,975,088 $ 1,084,791,456

SELECTED CONSOLIDATED STATISTICS
Three months ended September 30, 2019 Six months ended September 30, 2019
As originally filed Adjustments As revised As originally filed Adjustments As revised
Return on average equity (trailing 12 months) 10.8 % (0.3) % 10.5 % 10.8 % (0.3) % 10.5 %

~~(1)~~ ~~Operating income is computed as total revenues less provision for loan losses and general and administrative expenses.~~

Comparison of three months ended September 30, ~~2020~~2021 versus three months ended September 30, ~~2019~~2020

Gross loans outstanding ~~decreased~~increased to ~~$1.11~~$1.39 billion as of September 30, ~~2020,~~2021, a ~~12.9% decrease~~25.7% increase from the ~~$1.27~~$1.11 billion of gross loans outstanding as of September 30, ~~2019.~~2020. During the three months ended September 30, ~~2020~~2021 our unique borrowers ~~decreased~~increased by ~~21.3%~~8.2% compared to an ~~increase~~decrease of ~~11.8%~~3.7% during the three months ended September 30, ~~2019.~~2020.

Net income for the three months ended September 30, ~~2020 increased~~2021 decreased to ~~$13.4~~$12.4 million, a ~~433.1% increase~~7.2% decrease from ~~the $2.5~~$13.4 million ~~reported~~ for the same period of the prior year. Operating income (revenue less provision for ~~loan~~credit losses and general and administrative expenses) ~~increased~~decreased by ~~$12.9~~$2.3 million, or ~~127.1%~~9.8%.

Revenues for the three months ended September 30, ~~2020 decreased~~2021 increased by ~~$17.1~~$13.4 million, or ~~12.1%~~10.8%, to ~~$124.4~~$137.8 million from ~~$141.6~~$124.4 million for the same period of the prior year. The ~~decrease~~increase was primarily due to ~~a decrease~~an increase in average net loans outstanding. ~~Revenues from the 1,203 branches open throughout both three-month periods decreased by 14.3%.~~

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Interest and fee income for the three months ended September 30, ~~2020 decreased~~2021 increased by ~~$17.2~~$9.2 million, or ~~13.6%~~8.5%, from the same period of the prior year. ~~The decrease~~Interest and fee income was ~~primarily due~~impacted by a shift to ~~a corresponding decrease in average net loans outstanding. Average net~~larger lower interest rate loans. Net loans outstanding at September 30, ~~2020 decreased~~2021 increased by ~~12.8%~~25.0% over the balance at September 30, ~~2019.~~2020. Average net loans outstanding increased by 19.9% for the three months ended September 30, 2021 compared to the three-month period ended September 30, 2020.

Insurance commissions and other income for the three months ended September 30, ~~2020~~2021 increased by ~~$0.1~~$4.2 million, or ~~0.5%~~26.7%, from the same period of the prior year. Insurance commissions ~~decreased~~increased by approximately ~~$1.8~~$3.1 million, or ~~14.5%~~28.6%, during the three months ended September 30, ~~2020~~2021 when compared to the three months ended September 30, ~~2019.~~2020. Insurance revenue ~~decreased~~increased due to ~~lower loan volume~~a shift to larger loans during the quarter. The sale of insurance products are limited to large loans in several of our states. The large loan portfolio increased from 39.8% of the overall portfolio as of September 30, 2020 to 47.6% as of September 30, 2021. Other income increased by ~~$1.9~~$1.1 million. Sales of our motor club product increased by $2.1 million ~~$0.7 million of which was due~~as sales opportunities increased, similar to ~~higher tax preparation revenue as a result of an extended tax season.~~our insurance products, with the increase in large loan originations. The Company ~~also~~ recorded a gain on company owned life insurance of $1.1 million in the prior year due to the death of a former executive.

On April 1, 2020, the Company replaced its incurred loss methodology with a current expected credit loss ("CECL") methodology to accrue for expected losses. The provision for credit losses ~~for the three months ended September 30, 2020 decreased by $26.9~~increased $16.0 million, or ~~50.7%~~61.1%, to $42.0 million from $26.1 million when ~~compared~~comparing the second quarter of fiscal 2022 to the ~~provision for credit losses from the same period~~second quarter of ~~the prior year.~~fiscal 2021. The provision ~~decreased~~increased during the quarter primarily due ~~primarily~~ to significant loan growth during the quarter. CECL requires expected losses to be accrued at the time of origination. This increase was offset by a ~~$9.7~~$3.9 million decrease in net ~~charge-offs as well as an improvement in delinquency.~~charge-offs. Net charge-offs as a percentage of average net loans receivable on an annualized basis decreased from ~~16.8% for~~14.5% in the ~~three months ended September 30, 2019~~second quarter of fiscal 2021 to ~~14.5% for~~10.5% in the ~~three months ended September 30, 2020. Loans that were 91 days or more past due on a recency basis decreased $11.8 million~~second quarter of fiscal 2022. The charge-off rate during the quarter ~~compared to a $7.0 million increase~~benefited from the increased average tenure and reduced credit risk of customers in the ~~second fiscal quarter~~portfolio as of June 30, 2021. We are experiencing lower losses on loans that were in the ~~prior year.~~

~~Table~~portfolio as of ~~Contents~~

October 1, 2020 than initially predicted under our CECL methodology through September 30, 2021.

The Company's allowance for credit losses as a percentage of net loans was 11.2% at September 30, 2021 compared to 13.4% at September 30, ~~2020 compared to 10.8% at September 30, 2019.~~2020. Accounts that were 61 days or more past due on a recency basis were 5.0% of the portfolio at September 30, 2021 and 4.5% of the portfolio at September 30, ~~2020 and 6.4% of the portfolio at September 30, 2019.~~2020. Accounts that were 61 days or more past due on a contractual basis were 6.2% of the portfolio at September 30, ~~2020~~2021 compared to ~~8.0%~~6.2% of the portfolio at September 30, ~~2019.~~

After experiencing rapid growth of the portfolio during the prior two years, primarily in new customers, the gross loan balance declined in the first half of fiscal 2021 as a result of the ongoing pandemic and its effect on the overall economy. As of September 30, 2020, $363.4 million of the total loan portfolio is with customers who have been with the Company less than two years, a 24.6% increase from the average of the fiscal years 2016-2018 portfolios, but a 20.4% decline from fiscal 2020.

G&A expenses for the three months ended September 30, ~~2020~~2021 decreased by ~~$3.2~~$0.3 million, or ~~4.0%~~0.4%, from the corresponding period of the previous year. As a percentage of revenues, G&A expenses ~~increased~~decreased from ~~55.4% during the three months ended September 30, 2019 to~~ 60.5% during the three months ended September 30, ~~2020.~~2020 to 54.4% during the three months ended September 30, 2021. G&A expenses per average open branch ~~decreased~~increased by ~~5.0%~~2.2% when comparing the two three-month periods. The change in G&A expense is explained in greater detail below.

Personnel expense totaled ~~$46.8~~$45.7 million for the three months ended September 30, ~~2020,~~2021, a ~~$2.8~~$1.1 million, or ~~5.6%~~2.3%, decrease over the three months ended September 30, ~~2019.~~2020. Salary expense decreased approximately ~~$1.9~~$0.8 million, or ~~6.1%~~2.5%, when comparing the two quarterly periods ended September 30, ~~2020~~2021 and ~~2019.~~2020. Our headcount as of September 30, ~~2020,~~2021, decreased ~~10.2%~~7.5% compared to September 30, ~~2019.~~2020. Benefit expense ~~decreased~~increased approximately ~~$0.9~~$0.4 million, or ~~9.3%~~4.4%, when comparing the quarterly periods ended September 30, ~~2020~~2021 and ~~2019, primarily as a result of decreased health insurance claims.~~2020. Incentive expense decreased ~~$1.6~~$0.8 million, due to a decrease in share based compensation partially offset by an increase in bonuses paid to branch employees. The Company deferred $1.7 million less in origination costs under ASC 310 when comparing year over year due to lower originations during the quarter, which increased personnel costs.or 6.5%.

Occupancy and equipment expense totaled ~~$13.5~~$12.9 million for the three months ended September 30, ~~2020,~~2021, a ~~$39.0 thousand,~~$0.6 million, or ~~0.3%~~4.3%, decrease over the three months ended September 30, ~~2019.~~2020. Occupancy and equipment expense is generally a function of the number of branches the Company has open throughout the period. For the three months ended September 30, ~~2020,~~2021, the average occupancy and equipment expense per branch decreased to ~~$10.9~~$10.7 thousand, down from ~~$11.1~~$10.9 thousand for the three months ended September 30, ~~2019.~~2020.

Advertising expense ~~totaled $5.3 million for~~remained flat in the ~~three months ended September 30, 2020, a $1.0 million, or 16.2%, decrease over~~second quarter of fiscal 2022 compared to the ~~three months ended September 30, 2019.~~second quarter of fiscal 2021. The Company anticipated ~~lower~~an increase in demand ~~as a result of COVID-19~~ during the quarter and ~~reduced~~increased marketing accordingly. Marketing spend remained neutral as the ~~marketing spend.~~Company shifted to lower cost channels.

Amortization of intangible assets totaled ~~$1.3~~$1.2 million for the three months ended September 30, ~~2020,~~2021, a ~~$28.2~~$40.6 thousand, or ~~2.2%~~3.2%, decrease over the three months ended September 30, 2020.

Other expense totaled $9.8 million for the three months ended September 30, 2021, a $1.4 million, or 16.3%, increase over the three months ended September 30, ~~2019.~~2020. Other expense increased $0.4 million due to an increase in travel

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~~Other~~ ~~expense totaled $8.4~~costs during the quarter and $0.3 million ~~for~~due to an increase in credit investigation costs as a result of an increase in customer applications during the ~~three months ended September 30, 2020, a $0.6 million, or 8.3%, increase over the three months ended September 30, 2019.~~quarter.

Interest expense for the three months ended September 30, ~~2020 decreased~~2021 increased by ~~$0.4~~$0.8 million, or ~~6.9%~~13.9%, from the corresponding three months of the previous year. The ~~decrease~~increase in interest expense was due to a ~~9.3% decrease~~37.8% increase in the average debt outstanding, from ~~$419.8~~$380.7 million to ~~$380.7 million.~~$524.7 million, offset by a 17.1% decrease in the effective interest rate from 6.1% to 5.0%. The Company’s senior debt-to-equity ratio ~~decreased~~increased from ~~1.3:1~~ at ~~September 30, 2019 to~~ 1.2:1 at September 30, ~~2020.~~2020 to 1.4:1 at September 30, 2021.

Other key return ratios for the three months ended September 30, ~~2020~~2021 included a 8.6% return on average assets and a return on average equity of 22.4%(both on a trailing 12-month basis), as compared to a 4.5% return on average assets and a return on average equity of 11.8%~~(both~~ (both on a trailing 12-month basis)~~, as compared to a 5.8% return on average assets and a return on average equity of 10.5%~~ for the three months ended September 30, ~~2019.~~2020.

The Company’s effective income tax rate decreased to ~~21.9%~~11.7% for the three months ended September 30, ~~2020~~2021 compared to ~~34.3%~~21.9% for the corresponding period of the previous year. The decrease is primarily due to the ~~net effect of the historic~~permanent tax ~~credit accounting being recorded~~benefit related to non-qualified stock option exercises as a discrete ~~event~~item in the current quarter, the recognition of Federal Historic Tax Credits in the current quarter and lower than estimated Federal Historic Tax Credits for fiscal 2020 with the provision to return adjustment being treated as a discrete item in the prior year ~~quarter,~~quarter. This was partially offset by an increase in the disallowed executive compensation under Section 162(m) in the ~~prior year~~current quarter and the recognition of the permanent tax benefit related to the exclusion of life insurance proceeds in the ~~current~~prior year quarter.

Comparison of six months ended September 30, ~~2020~~2021 versus six months ended September 30, ~~2019~~

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2020

Gross loans outstanding ~~decreased~~increased to ~~$1.11~~$1.39 billion as of September 30, ~~2020,~~2021, a ~~12.9% decrease~~25.7% increase from the ~~$1.27~~$1.11 billion of gross loans outstanding as of September 30, ~~2019.~~2020. During the six months ended September 30, ~~2020~~2021 our number of unique borrowers in the portfolio ~~decreased~~increased by ~~18.0%~~7.1% compared to ~~an increase~~a decrease of ~~12.1%~~17.2% during the six months ended September 30, ~~2019.~~2020.

Net income for the six months ended September 30, ~~2020 increased~~2021 decreased to ~~$28.9~~$28.2 million, a ~~159.9% increase~~2.4% decrease from the ~~$11.1~~$28.9 million reported for the same period of the prior year. Operating income (revenue less provision for credit losses and general and administrative expenses) ~~increased~~decreased by ~~$24.1~~$2.8 million, or ~~94.5%~~5.7%.

Revenues ~~decreased~~increased by ~~$31.7~~$19.2 million, or ~~11.3%~~7.7%, to ~~$248.3~~$267.5 million during the six months ended September 30, ~~2020~~2021 from ~~$280.0~~$248.3 million for the same period of the prior year. The ~~decrease~~increase was primarily due to an ~~decrease~~increase in average net loans outstanding. ~~Revenues from the 1,178 branches open throughout both six-month periods decreased by 15.5%.~~

Interest and fee income for the six months ended September 30, ~~2020 decreased~~2021 increased by ~~$30.3~~$8.5 million, or ~~12.2%~~3.9%, from the same period of the prior year. ~~The decrease~~Interest and fee income was ~~primarily due~~impacted by a shift to ~~a corresponding decrease in average net loans outstanding.~~larger, lower interest rate loans. Net loans outstanding at September 30, ~~2020 decreased~~2021 increased by ~~12.8%~~25.0% over the balance at September 30, ~~2019.~~2020. Average net loans outstanding ~~decreased~~increased by ~~8.2%~~10.5% for the six months ended September 30, ~~2020~~2021 compared to the six-month period ended September 30, ~~2019.~~2020.

Insurance commissions and other income for the six months ended September 30, ~~2020 decreased~~2021 increased by ~~$1.5~~$10.6 million, or ~~4.7%~~36.0%, from the same period of the prior year. Insurance commissions ~~decreased~~increased by approximately ~~$2.6~~$5.1 million, or ~~10.9%~~24.4%, during the six months ended September 30, ~~2020~~2021 when compared to the six months ended September 30, ~~2019.~~2020. Insurance commissions benefited from the shift to larger loans mentioned above. Other income increased by ~~$1.1~~$5.5 million. Sales of our motor club product increased by $4.6 million ~~primarily due~~as sales opportunities increased, similar to ~~a $0.8 million~~our insurance products, with the increase in large loan originations. Revenue from our tax preparation ~~revenue as~~business increased by $1.3 million in the first half of fiscal 2022 from $2.8 million in the first half of fiscal 2021, or 47.7%. This was largely driven by a ~~result~~delay in the individual income tax filing season which resulted in a higher number of ~~an extended~~ tax ~~season and a gain on company owned life insurance~~preparations being completed in the first quarter of ~~$1.1 million due to the death of a former executive, partially offset by decreases in income from ancillary services of approximately $0.8 million due to a decrease in loan volume.~~fiscal 2022.

~~The Company's allowance for credit~~year primarily due to significant loan growth during the period. CECL requires expected losses asto be accrued at the time of origination. This increase was offset by a ~~percentage of~~$17.9 million decrease in net loans was 13.4% at September 30, 2020 compared to 10.8% at September 30, 2019. Accounts that were 61 days or more past due on a recency basis were 4.5% at September 30, 2020 compared to 6.4% at September 30, 2019. Accounts that were 61 days or more past due on a contractual basis were 6.2% at September 30, 2020 compared to 8.0% at September 30, 2019.

charge-offs. Net charge-offs as a percentage of average net loans receivable on an annualized basis decreased from ~~16.6% for~~16.4% in the ~~six months ended~~first half of fiscal 2021 to 10.9% in the first half of fiscal 2022. The charge-off rate during the quarter benefited from the increased average tenure and reduced credit risk of customers in the portfolio as of March 31, 2021. We are experiencing lower losses on loans that were in the portfolio as of October 1, 2020 than initially predicted under our CECL methodology through September 30, ~~2019 to 16.4% for the six months ended September 30, 2020.~~2021.

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G&A expenses for the six months ended September 30, ~~2020 decreased~~2021 increased by ~~$13.3~~$1.4 million, or ~~8.3%~~1.0%, from the corresponding period of the previous year. As a percentage of revenues, G&A expenses ~~increased~~decreased from ~~57.2% during the first six months of fiscal 2020 to~~ 59.2% during the first six months of fiscal ~~2021.~~2021 to 55.5% during the first six months of fiscal 2022. G&A expenses per average open branch ~~decreased~~increased by ~~10.0%~~3.9% when comparing the two six-month periods. The change in G&A expense is explained in greater detail below.

Personnel expense totaled ~~$91.5~~$92.0 million for the six months ended September 30, ~~2020,~~2021, a ~~$10.6~~$0.5 million, or ~~10.4%~~0.6%, ~~decrease~~increase over the six months ended September 30, ~~2019.~~2020. Salary expense decreased approximately ~~$2.9~~$1.9 million, or ~~4.7%~~3.2%, when comparing the two six ~~months~~month periods ended September 30, ~~2020~~2021 and ~~2019.~~2020. Our headcount as of September 30, ~~2020~~2021, decreased ~~10.2%~~7.5% compared to September 30, ~~2019, primarily driven by furloughs during the first six months of fiscal 2021.~~2020. Benefit expense ~~decreased~~increased approximately ~~$3.2~~$2.1 million, or ~~16.2%~~12.9%, when comparing the six ~~months~~month periods ended September 30, ~~2020~~2021 and ~~2019, primarily as a result of decreased claims as well as~~2020. Incentive expense increased $1.5 million, or 6.9% due to an increase in branch level bonuses offset by a decrease in headcount. Incentive expense decreased $8.7 million due to a decrease in share based compensation and a decrease in bonuses paid to branch employees. The Company deferred $4.2 million less in origination costs under ASC 310 due to lower originations during the six month ending September 30, 2020, which increased personnel costs.share-based compensation.

Occupancy and equipment expense totaled ~~$26.7~~$26.5 million for the six months ended September 30, ~~2020,~~2021, a $0.2 million, or ~~0.8%~~0.6%, decrease over the six months ended September 30, ~~2019.~~2020. Occupancy and equipment expense is generally a function of the number of branches the Company has open throughout the period. For the six months ended September 30, ~~2020,~~2021, the average occupancy and equipment expense per branch ~~decreased~~increased to ~~$21.5~~$22.0 thousand, ~~down~~up from ~~$22.1~~$21.5 thousand for the six months ended September 30, ~~2019.~~2020.

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Advertising expense totaled ~~$7.9~~$9.1 million for the six months ended September 30, ~~2020,~~2021, a ~~$4.5~~$1.2 million, or ~~36.4%~~15.1%, ~~decrease~~increase over the six months ended September 30, ~~2019.~~2020. The Company anticipated ~~lower~~an increase in demand ~~as a result of~~ ~~COVID-19~~ during the ~~quarter~~period and ~~reduced the~~increased marketing spend ~~across all programs.~~accordingly.

Amortization of intangible assets totaled ~~$2.7~~$2.5 million for the six months ended September 30, ~~2020,~~2021, a ~~$0.5~~$207.9 thousand, or 7.8%, decrease over the six months ended September 30, 2020.

Other expense totaled $18.3 million for the six months ended September 30, 2021, an $0.1 million, or ~~20.6%~~0.5%, increase over the six months ended September 30, ~~2019.~~

~~Other~~ ~~expense totaled $18.2 million for the six months ended September 30, 2020, a $1.6 million, or 9.3%, increase over the six months ended September 30, 2019.~~2020.

Interest expense for the six months ended September 30, ~~2020~~2021 increased by ~~$0.7~~$0.8 million, or ~~6.7%~~6.6%, from the corresponding six months of the previous year. The increase in interest expense was due to a ~~10.7%~~21.1% increase in the average debt outstanding, from ~~$352.8~~$390.6 million to ~~$390.6 million. The increase in average debt outstanding was partially~~$473.1 million offset by a ~~reduction~~13.0% decrease in the ~~benchmark~~effective interest ~~rate. The Company’s senior debt-to-equity ratio decreased~~rate from ~~1.3:1 at September 30, 2019~~5.8% to ~~1.2:1 at September 30, 2020.~~5.0%.

Other key return ratios for the first six months of fiscal ~~2021~~2022 included a 8.6% return on average assets and a return on average equity of 22.4%(both on a trailing 12-month basis), as compared to a 4.5% return on average assets and a return on average equity of 11.8%~~(both~~ (both on a trailing 12-month basis)~~, as compared to a 5.8% return on average assets and a return on average equity of 10.5%~~ for the first six months of fiscal ~~2020.~~2021.

The Company’s effective income tax rate decreased to ~~24.3%~~18.5% for the six months ended September 30, ~~2020~~2021 compared to ~~24.8%~~24.3% for the corresponding period of the previous year. The decrease is primarily due to the permanent tax benefit related to non-qualified stock option exercises recorded as a discrete item in the current period, the recognition of Federal Historic Tax Credits in the current period and lower than estimated Federal Historic Tax Credits for fiscal 2020 with the provision to return adjustment recorded in the prior year. This was partially offset by an increase in the disallowed executive compensation under Section 162(m) in the current period and the recognition of the permanent tax benefit related to the exclusion of life insurance proceeds in the ~~current~~prior year.

Regulatory Matters

~~Resolution of Mexico Investigation~~

~~See Note 12 to the unaudited Consolidated Financial Statements for a discussion of the investigation into our operations in Mexico and the resolution thereof.~~

CFPB Rulemaking Initiatives

On October 5, 2017, the CFPB issued a final rule (the "Rule") imposing limitations on (i) short-term consumer loans, (ii) longer-term consumer installment loans with balloon payments, and (iii) higher-rate consumer installment loans repayable by a payment authorization. The Rule ~~required~~requires lenders originating short-term loans and longer-term balloon payment loans to evaluate whether each consumer has the ability to repay the loan along with current obligations and expenses (“ability to repay requirements”). The Rule also curtails repeated unsuccessful attempts to debit consumers’ accounts for short-term loans, balloon payment loans, and installment loans that involve a payment authorization and an Annual Percentage Rate over 36% (“payment requirements”). The Company does not believe that the Rule will have a material impact on the Company’s existing lending procedures, because the Company currently does not make short-term consumer loans or longer-term consumer installment loans with balloon payments that would subject the Company to the Rule’s ability to repay requirements. The Company also currently underwrites all its loans (including those secured by a vehicle title that would fall within the scope of

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these proposals) by reviewing the customer’s ability to repay based on the Company’s standards. However, implementation of the Rule’s payment requirements may require changes to the Company’s practices and procedures for such loans, which could materially and adversely affect the Company’s ability to make such loans, the cost of making such loans, the Company’s ability to, or frequency with which it could, refinance any such loans, and the profitability of such loans.

Further, on ~~July 7, 2020,~~June 6, 2019, the CFPB ~~issued a final rule rescinding~~amended the Rule to delay the August 19, 2019 compliance date for part of the Rule’s provisions, including the ability to repay requirements. The new compliance date for the ability to repay requirements is November 19, 2020. In addition, on February 6, 2019, the CFPB issued a notice of proposed rulemaking proposing to rescind provisions of the Rule ~~after re-evaluating~~governing the ~~legal and evidentiary bases~~ability to repay requirements. The comment period for ~~these provisions and finding them~~this proposed rulemaking closed in May 2019. According to ~~be insufficient. The CFPB, however, did not rescind or alter~~ the ~~payments requirements in the Rule. Instead,~~CFPB’s Fall 2019 rulemaking agenda, the CFPB ~~issued guidance clarifying~~is reviewing the ~~payment requirements’ scope~~approximately 190,000 comments it received and ~~assisting lenders~~expected to take final action in ~~complying~~April 2020 with ~~the payment requirements.~~

~~The Rule’s compliance date for the payment requirements is August 19, 2019. The compliance date, however, is~~respect to this proposal. However, no final action has been taken as of yet. Any regulatory changes could have effects beyond those currently stayed pursuant to a court order issued in Community Financial Services Association v. CFPB, No. 1:18-cv-00295 (W.D. Tex. Nov. 6, 2018). Although the payment requirements are currently stayed by court order, the CFPB announcedcontemplated that ~~it will seek to have them go into effect with a reasonable period for entities to come into compliance.~~

could further materially and adversely impact our business and operations. Unless rescinded or otherwise amended, the Company will have to comply with the Rule’s payment requirements if it continues to allow consumers to set up future recurring payments online for certain covered loans such that it meets the definition of having a “leveraged payment mechanism” under the Rule. If the payment provisions of the Rule apply, the Company will have to modify its loan payment procedures to comply with the required notices and mandated timeframes set forth in the final rule. Implementation of the Rule’s payment requirements may require changes to the Company’s practices and procedures for such loans, which could materially and adversely affect the Company’s ability to make such loans, the cost of making such loans, the Company’s ability to, or frequency with which it could, refinance any such loans, and the profitability of such loans.

The CFPB also has stated that it expects to conduct separate rulemaking to identify larger participants in the installment lending market for purposes of its supervision program. This initiative was classified as “inactive” on the CFPB’s Spring 2018

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rulemaking agenda and has remained inactive since, but the CFPB indicated that such action was not a decision on the merits. Though the likelihood and timing of any such rulemaking is uncertain, the Company believes that the implementation of such rules would likely bring the Company’s business under the CFPB’s supervisory authority which, among other things, would subject the Company to reporting obligations to, and on-site compliance examinations by, the CFPB.

The CFPB also announced on July 7, 2020 that it will undertake new research focusing on identifying information that could be disclosed to consumers during the small dollar lending process to allow them to make the most informed choices. Depending on the outcome of this research and future action taken by the CFPB, implementation of new disclosures may require changes to the Company’s practices and procedures for such loans, which could materially and adversely affect the Company’s ability to make such loans, the cost of making such loans, and the profitability of such loans.

The CFPB is currently working under an acting director as the new administration’s nominee awaits congressional confirmation. These changes in the CFPB leadership could result in a change in priorities for the agency, including the Rule discussed above or other initiatives of the CFPB.

See Part I, Item 1, ~~"Business~~“Business - Government Regulation - Federal ~~legislation"~~legislation,” for a further discussion of these matters and the federal regulations to which the Company’s operations are subject and Part I, Item 1A, ~~"Risk Factors"~~“Risk Factors,” in the Company’s Form 10-K for the year ended March 31, ~~2020~~2021 for ~~a further discussion of~~more information regarding these ~~matters~~regulatory and ~~federal regulations to which the Company’s operations are subject.~~related risks.

Liquidity and Capital Resources

The Company has historically financed and continues to finance its operations, acquisitions and branch expansion primarily through a combination of cash flows from operations and borrowings from its institutional lenders. As discussed below, the Company has also issued debt securities to finance its operations and repay a portion of its outstanding indebtedness. The Company has generally applied its cash flows from operations to fund its loan volume, fund acquisitions, repay long-term indebtedness, and repurchase its common stock. Net cash provided by operating activities for the six months ended September 30, ~~2020~~2021 was ~~$79.9~~$110.6 million.

Expenditures by the Company to open and furnish new branches averaged approximately $41,000 per new branch during fiscal 2020. New branches have generally required from $230,000 to $380,000 to fund outstanding loans receivable originated during their first 12 months of operation. During the six months ended September 30, 2020, the Company opened no new branches, acquired no branches, and merged 11 branches into existing ones.

The Company believes that attractive opportunities to acquire new branches or receivables from its competitors or to acquire branches in communities not currently served by the Company will continue to become available as conditions in local economies and the financial circumstances of owners change.

On September 27, 2021, we issued $300 million in aggregate principal amount of 7.0% senior notes due 2026 (the “Notes”). The Notes were sold in a private placement in reliance on Rule 144A and Regulation S under the Securities Act of 1933, as amended. The Notes are unconditionally guaranteed, jointly and severally, on a senior unsecured basis by all of the Company’s existing and certain of its future subsidiaries that guarantee the revolving credit facility. Interest on the notes is payable semi-annually in arrears on May 1 and November 1 of each year, commencing May 1, 2022. At any time prior to November 1, 2023, the Company may redeem the Notes, in whole or in part, at a redemption price equal to 100% of the principal amount plus a make-whole premium, as described in the indenture, plus accrued and unpaid interest, if any, to, but not including, the date of redemption. At any time on or after November 1, 2023, the Company may redeem the Notes at redemption prices set forth in the indenture, plus accrued and unpaid interest, if any, to, but not including, the date of redemption. In addition, at any time prior to November 1, 2023, the Company may use the proceeds of certain equity offerings to redeem up to 40% of the aggregate principal amount of the Notes issued under the indenture at a redemption price equal to 107.0% of the principal amount of Notes redeemed, plus accrued and unpaid interest, if any, to, but not including, the date of redemption.

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We used the net proceeds from this offering to repay a portion of the outstanding indebtedness under our revolving credit facility.

The Company continues to believe stock repurchases are a viable component of the Company’s long-term financial strategy and an excellent use of excess cash when the opportunity arises. Under the terms of our revolving credit facility and the Notes we have, subject to certain restrictions, the ability to make share repurchases of up to $90.0 million through June 30, 2022 . Additional share repurchases can be made subject to compliance with, among other things, applicable restricted payment covenants under the revolving credit facility and the Notes.

The Company has a revolving credit facility with a syndicate of banks. ~~In June 2019, the Company entered into an amended and restated~~The revolving credit ~~agreement, which~~facility provides for revolving borrowings of up to the lesser of (a) ~~$685.0 million as~~ the aggregate commitments under the facility orand (b) a borrowing base, and it includes a ~~$0.3 million~~$300,000 letter of credit under a $1.5 million subfacility.

Subject to a borrowing base formula, the Company may borrow at the rate of LIBOR plus 3.5% with a minimum rate of 4.5%. The Company’s amended and restated revolving credit agreement provides procedures for determining a replacement or alternative rate in the event LIBOR is unavailable or discontinued or if the administrative agent elects to replace LIBOR prior to its discontinuation. There can be no assurances as to whether such replacement or alternative rate will be more or less favorable than LIBOR. We intend to monitor the developments with respect to the potential phasing out of LIBOR and will work to limit any negative impacts that could result during any transition away from LIBOR. At September 30, ~~2020,~~2021, the aggregate commitments under the revolving credit facility were $685.0 million. The $300,000 letter of credit outstanding under the subfacility expires on December 31, 2021; however, it automatically extends for one year on the expiration date. The borrowing base limitation is equal to the product of (a) the Company’s eligible finance receivables, less unearned finance charges, insurance premiums and insurance commissions applicable to such eligible finance receivables, and (b) an advance rate percentage that ranges from ~~79%~~74% to ~~85%~~80% based on a collateral performance indicator, as more completely described below. Further, under the amended and restated revolving credit agreement, the administrative agent ~~under the revolving credit facility~~ has the right ~~at any time, and from time to time in its permitted discretion (but without any obligation),~~ to set aside reasonable reserves against the available borrowing base in such amounts as it may deem appropriate, including, without limitation, reserves with respect to certain regulatory events or any increased operational, legal, or regulatory risk of the Company and its subsidiaries. ~~The Company does not believe that this right will materially limit its business and strategic initiatives.~~

On April 30, 2020 the amended and restated revolving credit agreement was further amended to (i) modify certain financial covenants to (a) reduce the Company's required minimum net worth to $365.0 million through December 30, 2020 (from $375.0 million), and (b) reduce the Company's fixed charge ratio to 2.25 to 1 through the fiscal quarter ending September 30, 2020; (ii) add new subsidiary guarantors; and (iii) amend language relating to the transition to a new benchmark interest rate (from LIBOR), if necessary.

On July 24, 2020, the amended and restated revolving credit agreement was further amended to, among other things: (i) reduce the advance rate percentage range to 74% to 80% of the collateral performance indicator; (ii) increase the applicable margin associated with the EBITDA ratio by 50 basis points; (iii) reduce the required minimum net worth to $325.0 million (from $365.0 million); and (iv) allow the Company to make share repurchases up to $50.0 million through March 31, 2021 plus up to 50% of consolidated adjusted net income for the period commencing on January 1, 2019, subject to certain restrictions;

The agreement establishes a maximum specified level for the collateral performance indicator of 23.0%. The collateral performance indicator is equal to the sum of (a) a three-month rolling average rate of receivables at least sixty days past due and (b) an eight-month rolling average net charge-off rate.

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Subject to a borrowing base formula, the Company may borrow at the rate of LIBOR plus an applicable margin between 3.0% and 4.0% based on certain EBITDA related metrics set forth in the revolving credit agreement, which are determined and adjusted on a monthly basis with a minimum rate of 4.0%. The revolving credit facility has a commitment fee of 0.50% per annum on the unused portion of the commitment. Commitment fees on the unused portion of the borrowing totaled $0.8 million and $0.7 million for the six months ended September 30, 2020 and 2019, respectively. The amended and restated revolving credit agreement provides for a process to transition to a new benchmark interest rate from LIBOR, if necessary.

The Company’s obligations under the revolving credit facility, together with treasury management and hedging obligations owing to any lender under the revolving credit facility or any affiliate of any such lender, are required to be guaranteed by each of the Company’s wholly-owned domestic subsidiaries. The obligations of the Company and the subsidiary guarantors under the revolving credit facility, together with such treasury management and hedging obligations, are secured by a first-priority security interest in substantially all assets of the Company and the subsidiary guarantors.

The ~~amended and restated~~agreement governing the Company’s revolving credit ~~agreement~~facility contains affirmative and negative covenants, including covenants that ~~generally~~ restrict the ability of the Company and its subsidiaries to, among other things, incur or guarantee indebtedness, incur liens, pay dividends and repurchase or redeem capital stock, dispose of assets, engage in mergers and consolidations, make acquisitions or other investments, redeem or prepay subordinated debt, amend subordinated debt documents, make changes in the nature of its business, and engage in transactions with affiliates. The agreement also contains financial covenants, ~~including:~~including (i) a minimum consolidated net worth of $325.0 million; (ii) a minimum fixed charge coverage ratio of ~~(a) 2.25 to 1.0 for the fiscal quarter ended September 30, 2020 and (b)~~ 2.75 to ~~1.0 for each fiscal quarter thereafter;~~1.0; (iii) a maximum ratio of total debt to consolidated adjusted net worth of ~~2.0~~2.5 to 1.0; (iv) as of the end of each fiscal quarter, provision for credit losses for the four fiscal quarters then ending shall equal or exceed the net loan charge-off for the corresponding period (any shortfalls are required to be deducted in the determination of net income and ~~consolidated net worth); and (v)~~(iv) a maximum collateral performance indicator of ~~23.0%,~~24% as of the end of each calendar month. The collateral performance indicator is equal to the sum of (a) a three-month rolling average rate of receivables at least sixty days past due and (b) an eight-month rolling average net charge-off rate. The agreement allows the Company to incur subordinated debt that matures after the termination date for the revolving credit facility and that contains specified subordination terms, subject to limitations on amount imposed by the financial covenants under the agreement.

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The collateral performance indicator is equal to the sum of (a) a three-month rolling average rate of receivables at least sixty days past due and (b) an eight-month rolling average net charge-off rate. The Company was in compliance with ~~the applicable~~these covenants at September 30, ~~2020 and March 31, 2020~~2021 and does not believe that these covenants will materially limit its business and expansion strategy.

The agreement contains events of default including, without limitation, nonpayment of principal, interest or other obligations, violation of covenants, misrepresentation, cross-default and cross-acceleration to other ~~debt, prohibited payments on or amendment to subordinated~~ debt, bankruptcy and other insolvency events, judgments, certain ERISA events, ~~defaults under certain other agreements,~~ actual or asserted invalidity of loan documentation, invalidity of subordination provisions of subordinated debt, certain changes of control of the Company, ~~other defaults under the agreement that are not remedied within thirty (30) days, invalidity of loan documents related to the agreement, appointment of a custodian, trustee, or receiver,~~ and the occurrence of certain regulatory events (including the entry of any stay, order, judgment, ~~cease and desist order,~~ruling or ~~other sanction (other than~~similar event related to the ~~imposition of a monetary fine), order, or ruling against the Company’~~Company’s or any of its ~~subsidiaries related in any way to the~~subsidiaries’ originating, holding, pledging, collecting ~~servicing,~~ or enforcing its eligible finance receivables that is material to the Company or any subsidiary) which remains unvacated, undischarged, unbonded or unstayed by appeal or otherwise for a period of 60 days from the date of its entry and is reasonably likely to cause a material adverse change. If it is determined that a violation of any applicable law has occurred, such violation may give rise to an event of default under our credit agreement if such violation were to result in a material adverse effect on our business, operations, results of operations, assets, liabilities, or condition (financial or otherwise), or a material impairment of the Company’s and the subsidiaries’ ability to perform their obligations under the agreement or related documents, or if the amount of any settlement, penalties, fines, or other payments resulted in the Company failing to satisfy any financial covenants. See Note 10 to the unaudited Consolidated Financial Statements for additional information regarding the Company’s debt.

The Company believes that cash flow from operations and borrowings under its revolving credit facility or other sources will be adequate to fund the expected cost of opening or acquiring new branches, including funding initial operating losses of new branches and funding loans receivable originated by those branches and the Company's other branches (for the next 12 months

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and for the foreseeable future beyond that). Except as otherwise discussed in this report ~~and in the Company’s Form 10-K for the year ended March 31, 2020,~~ including, but not limited to, any discussions in Part I,1, Item 1A, "Risk Factors" in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K (as supplemented by any subsequent disclosures in information the Company files with or furnishes to the SEC from time to time), management is not currently aware of any trends, demands, commitments, events or uncertainties that it believes will or could result in, or are or could be reasonably likely to result in, any material adverse effect on the Company’s liquidity.

Share Repurchase Program

~~Since 1996, the Company has repurchased approximately 21.2 million shares for an aggregate purchase price of approximately $1.2 billion.~~ On June 16, ~~2020,~~2021, the Board of Directors authorized the Company to repurchase up to $30.0 million of the ~~Company's~~Company’s outstanding common stock, inclusive of the amount that remains available for repurchase under prior repurchase authorizations. On September 14, 2020, the Board of Directors authorized the Company to repurchase up to $25.0 million of the Company's outstanding common stock in addition to the amount that remained available for repurchase under prior repurchase authorizations. As of September 30, ~~2020,~~2021, the Company had ~~$11.8~~$15.5 million in aggregate remaining repurchase capacity. The timing and actual number of shares of common stock repurchased will depend on a variety of factors, including the stock price, corporate and regulatory requirements, ~~available funds, alternative uses of capital,~~ restrictions under the revolving credit ~~agreement,~~facility and other market and economic conditions. ~~The Company’s stock repurchase program may be suspended or discontinued at any time.~~

The Company continues to believe stock repurchases are a viable component of the Company’s long-term financial strategy and an excellent use of excess cash when the opportunity arises. ~~However,~~Under the terms of our revolving credit facility ~~limits share repurchases to (i) $50 million from July 24, 2020 through March 31, 2021, plus (ii) 50% of consolidated adjusted net income commencing on January 1, 2019,~~and the Notes, we have, subject to certain ~~restrictions. Immediately following a stock repurchase,~~restrictions, the ~~Company must have 15% or more in excess availability~~ability to make share repurchases of at least $90.0 million through June 30, 2022. Additional share repurchases can be made subject to compliance with, among other things, applicable restricted payment covenants under the revolving credit ~~facility. The~~facility and the Notes. Our first priority is to ensure we have enough capital to fund loan growth. To the extent we have excess capital, we may repurchase stock, if appropriate and as authorized by our Board of Directors. As of September 30, 2021, the Company's debt outstanding was $570.6 million and its shareholders' equity was $419.0 million resulting in a debt-to-equity ratio of 1.4:1.0. Management will continue to monitor the Company's debt-to-equity ratio and is committed to maintaining a debt level that will allow the Company ~~can repurchase additional amounts of shares with prior written consent from lenders.~~to continue to execute its business objectives, while not putting undue stress on its consolidated balance sheet.

Inflation

The Company does not believe that inflation, within reasonably anticipated rates, will have a material, adverse effect on its financial condition. Although inflation would increase the Company’s operating costs in absolute terms, the Company expects that the same decrease in the value of money would result in an increase in the size of loans demanded by its customer base. We anticipate that such a change in customer preference would result in an increase in total loans receivable and an increase in absolute revenue to be generated from that larger amount of loans receivable. That increase in absolute revenue should offset any increase in operating costs. In addition, because the Company’s loans have a relatively short contractual term, it is unlikely that loans made at any given point in time will be repaid with significantly inflated dollars.

Quarterly Information and Seasonality

See Note 3 to the unaudited Consolidated Financial Statements.

Recently Adopted Accounting Pronouncements

See Note 3 to the unaudited Consolidated Financial Statements.

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Critical Accounting Policies

The Company’s accounting and reporting policies are in accordance with GAAP and conform to general practices within the finance company industry. Certain accounting policies involve significant judgment by the Company’s management, including the use of estimates and assumptions which affect the reported amounts of assets, liabilities, revenue, and expenses. As a result, changes in these estimates and assumptions could significantly affect the Company’s financial position and results of operations. The Company considers its policies regarding the allowance for credit losses, share-based compensation and income taxes to be its most critical accounting policies due to the significant degree of management judgment involved.

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Allowance for Credit Losses

Accounting policies related to the allowance for credit losses are considered to be critical as these policies involve considerable subjective judgement and estimation by management. As discussed in Note 3 – Summary of Significant Policies, to our unaudited Consolidated Financial Statements included in this report, our policies related to the allowances for credit losses changed on April 1, 2020 in connection with the adoption of a new accounting standard update as codified in ASC 326. In the case of loans, the allowance for credit losses is a contra-asset valuation account, calculated in accordance with ASC 326 that is deducted from the amortized cost basis of loans to present the net amount expected to be collected. The amount of the allowance account represents management’s best estimate of current expected credit losses on these financial instruments considering available information, from internal and external sources, relevant to assessing exposure to credit loss over the contractual term of the instrument. Relevant available information includes historical credit loss experience, current conditions, and reasonable and supportable forecasts.

Share-Based Compensation

The Company measures compensation cost for share-based awards at fair value and recognizes compensation over the service period for awards expected to vest. The fair value of restricted stock is based on the number of shares granted and the quoted price of the Company’s common stock at the time of grant, and the fair value of stock options is determined using the Black-Scholes valuation model. The Black-Scholes model requires the input of highly subjective assumptions, including expected volatility, risk-free interest rate and expected life, changes to which can materially affect the fair value estimate. Actual results and future changes in estimates may differ substantially from the Company’s current estimates.

Income Taxes

Management uses certain assumptions and estimates in determining income taxes payable or refundable, deferred income tax liabilities and assets for events recognized differently in its financial statements and income tax returns, and income tax expense. Determining these amounts requires analysis of certain transactions and interpretation of tax laws and regulations. Management exercises considerable judgment in evaluating the amount and timing of recognition of the resulting income tax liabilities and assets. These judgments and estimates are re-evaluated on a periodic basis as regulatory and business factors change.

No assurance can be given that either the tax returns submitted by management or the income tax reported on the Consolidated Financial Statements will not be adjusted by either adverse rulings, changes in the tax code, or assessments made by the IRS, state, or foreign taxing authorities. The Company is subject to potential adverse adjustments, including but not limited to: an increase in the statutory federal or state income tax rates, the permanent non-deductibility of amounts currently considered deductible either now or in future periods, and the dependency on the generation of future taxable income in order to ultimately realize deferred income tax assets.

Under FASB ASC Topic 740, the Company will include the current and deferred tax impact of its tax positions in the financial statements when it is more likely than not (likelihood of greater than 50%) that such positions will be sustained by taxing authorities, with full knowledge of relevant information, based on the technical merits of the tax position. While the Company supports its tax positions by unambiguous tax law, prior experience with the taxing authority, and analysis of what it considers to be all relevant facts, circumstances and regulations, management must still rely on assumptions and estimates to determine the overall likelihood of success and proper quantification of a given tax position.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

Interest Rate Risk

As of September 30, 2020, the Company’s financial instruments consisted of the following: cash and cash equivalents, loans receivable and senior notes payable. Fair value approximates carrying value for all of these instruments. Loans receivable are originated at prevailing market rates and have an average life of approximately eight months. Given the short-term nature of these loans, they are continually repriced at current market rates.

The Company’s outstanding debt under its revolving credit facility was ~~$424.9~~$275.7 million at September 30, ~~2020.~~2021. Interest on borrowing under this facility is based on the greater of ~~4.0%~~4.5% or one month LIBOR plus an applicable margin ~~between 3.0% and 4.0% based on certain EBITDA related metrics.~~of 3.5%. Based on the outstanding balance at September 30, ~~2020,~~2021, a change of 1.0% in the interest rate would cause a change in interest expense of approximately ~~$4.2~~$2.8 million on an annual basis.

Item 4. Controls and Procedures

Changes in Internal Control over Financial Reporting

There were no changes to our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Evaluation of Disclosure Controls and Procedures

Based on management’s evaluation, with the participation of our CEO and CFO, as of the end of the period covered by this report, our CEO and CFO have concluded that our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, are effective to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and is accumulated and communicated to management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

See Note 12 to the unaudited Consolidated Financial Statements included in this report for information regarding legal proceedings.

Item 1A. Risk Factors

~~Other than as set forth below, there~~There have been no material changes to the risk factors disclosed in Part I, Item 1A of the Company's Annual Report on Form 10-K for the fiscal year ended March 31, ~~2020.~~2021.

~~Allowance for Credit Losses~~

We began using a new credit reserving methodology known as the CECL methodology effective April 1, 2020. Our ability to accurately forecast future losses under this methodology may be impaired by the significant uncertainty surrounding the pandemic and containment measures and the lack of comparable precedent. This could result in the need to record additional provisions for credit losses in the future, as the COVID-19 pandemic continues to evolve, and our losses on our loans and other exposures could exceed our allowance.

~~The global outbreak of the coronavirus has and may continue to adversely impact our business.~~

Occurrences of epidemics or pandemics, depending on scale, may cause varying degrees of damage to national and local economies. The COVID-19 pandemic has resulted in widespread volatility and deterioration in economic conditions across the United States. Governmental authorities have taken a number of steps to slow the spread of COVID-19, including shutdowns of nonessential businesses, stay-at-home orders, social distancing measures, and other actions which have disrupted economic activity.

The United States has also experienced higher unemployment levels as a result of COVID-19, which we expect will over time result in increased delinquencies and credit losses on finance receivables outstanding. In addition, if significant portions of our workforce are unable to work effectively as a result of COVID-19, there may be servicing and other disruptions to our business. Further, a second outbreak of COVID-19 could lead to further mandated shutdowns and economic uncertainty. As a result, we cannot foresee whether the outbreak of COVID-19 pandemic will be effectively contained, nor can we anticipate the extent, severity and duration of its impact.

The CARES Act was signed into law in March 2020, which, among other things, expanded states’ ability to provide unemployment insurance for many workers impacted by COVID-19, including for workers who were not otherwise eligible for unemployment benefits, provide direct payments to qualifying individuals, and provided assistance for small and medium size businesses. We believe that many of our customers have benefited from the enhanced benefits provided by the CARES Act, some of which, such as enhanced unemployment benefits, were set to expire in July 2020. If these benefits are not extended, or if other stimulus measures benefiting our customers are not enacted in the near term, the effect may result in an increase in delinquencies and materially and adversely impact our results of operations and financial condition in future periods.

Federal, state and local governments have mandated or encouraged financial services companies to make accommodations to borrowers and other customers affected by COVID-19. Legal and regulatory responses to concerns about COVID-19 could result in additional regulation or restrictions affecting the conduct of our business in the future. All of the foregoing may adversely affect our income and other results of operations or make collection of our personal loans more difficult or reduce income received from such loans or our ability to obtain financing with respect to such loans.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The Company's credit agreements contain certain limits on share repurchases. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources."

~~Table~~The following table details purchases of ~~Contents~~

~~Since 1996,~~the Company's common stock made by the Company ~~has repurchased approximately 21.2 million shares for an aggregate purchase price of approximately $1.2 billion.~~ during the three months ended September 30, 2021:


	(a) Total number of shares purchased	(b) Average price paid per share		(c) Total number of shares purchased as part of publicly announced plans or programs	(d) Approximate dollar value of shares that may yet be purchased under the plans or programs(1)
July 1 through July 31, 2021	61,187	$	163.89	61,187	$	15,462,540
August 1 through August 31, 2021	—	—		—	15,462,540
September 1 through September 30, 2021	—	—		—	15,462,540
Total for the quarter	61,187	$	163.89	61,187

On June 16, ~~2020,~~2021, the Board of Directors authorized the Company to repurchase up to $30.0 million of the Company's outstanding common stock, inclusive of the amount that remains available for repurchase under prior repurchase authorizations. On September 14, 2020, the Board of Directors authorized the Company to repurchase up to $25.0 million of the Company's outstanding common stock in addition to the amount that remained available for repurchase under prior repurchase authorizations. As of September 30, ~~2020,~~2021, the Company had ~~$11.8~~$15.5 million remaining in aggregate repurchase ~~capacity.~~capacity under its authorizations. The timing and actual number of shares of common stock repurchased will depend on a variety of factors, including the stock price, corporate and regulatory requirements, available funds, alternative uses of capital, restrictions under the revolving credit agreement, and other market and economic conditions. The ~~Company's stock~~share repurchase program does not have an expiration date and may be suspended, modified or discontinued at any ~~time.~~

~~The following table details purchases of~~time at the ~~Company's common stock, if any, made by the Company during the three months ended September 30, 2020:~~

(a)
Total number of
shares purchased (b)
Average price paid
per share (c)
Total number of shares purchased
as part of publicly announced
plans or programs (d)
Approximate dollar value of shares
that may yet be purchased
under the plans or programs
July 1 through July 31, 2020 — $ — — $ 30,000,000
August 1 through August 31, 2020 132,711 90.70 132,711 17,963,213
September 1 through September 30, 2020 327,409 95.25 327,409 11,778,166
Total for the quarter 460,120 $ 93.94 460,120
Company’s discretion without prior notice.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

The exhibits listed in the accompanying exhibit index are filed as part of the Quarterly Report on Form 10-Q.

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EXHIBIT INDEX

Exhibit
Number Exhibit Description Filed
Herewith Incorporated by Reference
Form or
Registration
Number Exhibit Filing
Date
10.01
Second Amendment to Amended and Restated Revolving Credit Facility, dated April 29, 2020
8-K 10.1 04-30-20
10.02
Third Amendment to Amended and Restated Revolving Credit Facility, dated July 24, 2020
8-K 10.1 07-24-20
10.03
Declination Letter, dated August 5, 2020, from the U.S. Department of Justice, Criminal Division, and agreed to by World Acceptance Corporation
8-K 10.1 08-06-20
10.04
Order Instituting Cease-and-Desist Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934, Making Findings, and Imposing a Cease-and-Desist Order, dated August 6, 2020, between the U.S. Securities and Exchange Commission and World Acceptance Corporation
8-K 10.2 08-06-20
31.01
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
*
31.02
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial and Strategy Officer
*
32.01
Section 1350 Certification of Chief Executive Officer
*
32.02
Section 1350 Certification of Chief Financial and Strategy Officer
*
101.01 The following materials from the Company's Quarterly Report for the fiscal quarter ended September 30, 2020, formatted in Inline XBRL: *
(i) Consolidated Balance Sheets as of September 30, 2020 and March 31, 2020;
(ii) Consolidated Statements of Operations for the three and six months ended September 30, 2020 and September 30, 2019;
(iii) Consolidated Statements of Shareholders' Equity for the three and six months ended September 30, 2020 and September 30, 2019;
(iv) Consolidated Statements of Cash Flows for the six months ended September 30, 2020 and September 30, 2019; and
(v) Notes to the Consolidated Financial Statements.
104.01 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) *

Exhibit
Number

Exhibit Description

Filed
Herewith

Incorporated by Reference

Form or
Registration
Number

Exhibit

Filing
Date

3.01

Second Amended and Restated Articles of Incorporation of World Acceptance Corporation, as amended

S-8

3.1

07-29-03

3.02

Eighth Amended and Restated Bylaws of World Acceptance Corporation

10-Q

3.01

11-08-18

31.01

Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer

31.02

Rule 13a-14(a)/15d-14(a) Certification of Chief Financial and Strategy Officer

32.01

Section 1350 Certification of Chief Executive Officer

32.02

Section 1350 Certification of Chief Financial and Strategy Officer

101.01

The following materials from the Company's Quarterly Report for the fiscal quarter ended September 30, 2021, formatted in Inline XBRL:

(i)

Consolidated Balance Sheets as of September 30, 2021 and March 31, 2021;

(ii)

Consolidated Statements of Operations for the three and six months ended September 30, 2021 and September 30, 2020;

(iii)

Consolidated Statements of Shareholders' Equity for the three and six months ended September 30, 2021 and September 30, 2020;

(iv)

Consolidated Statements of Cash Flows for the six months ended September 30, 2021 and September 30, 2020; and

(v)

Notes to the Consolidated Financial Statements.

104.01

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)


*			~~Submitted electronically~~Filed herewith.
+			Management Contract or other compensatory plan required to be filed under Item 6 of this report and Item 601 of Regulation S-K of the Securities and Exchange Commission.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


WORLD ACCEPTANCE CORPORATION

	~~By: /s/ R. Chad Prashad~~
	~~R. Chad Prashad~~
	~~President and Chief Executive Officer~~
	~~Signing on behalf of the registrant and as principal executive officer~~
	~~Date:~~	~~November 6, 2020~~

	~~By: /s/ John L. Calmes, Jr.~~
	~~John L. Calmes, Jr.~~
	~~Executive Vice President and Chief Financial and Strategy Officer~~
	~~Signing on behalf of the registrant and as principal financial officer~~
	~~Date:~~	~~November 6, 2020~~

	By: /s/ Scott McIntyre
	Scott McIntyre
	Senior Vice President of Accounting
	Signing on behalf of the registrant and as principal accounting officer
	Date:	November ~~6, 2020~~5, 2021

4344


	Three months ended September 30, 2019
	Common Stock
	Shares	Additional Paid-in Capital		Retained Earnings	Total Shareholders' Equity
Balances at June 30, 2019	9,181,305	$	208,876,263	340,783,798	549,660,061
Proceeds from exercise of stock options	15,706	977,522		—	977,522
Common stock repurchases	(1,251,103)	—		(168,195,335)	(168,195,335)
Restricted common stock expense under stock option plan, net of cancellations ($8,481)	(66)	6,677,016		—	6,677,016
Stock option expense	—	1,604,772		—	1,604,772


Net income	—	—		2,513,174	2,513,174
Balances at September 30, 2019	7,945,842	$	218,135,573	175,101,637	393,237,210


	Six months ended September 30, 2019
	Common Stock
	Shares	Additional Paid-in Capital		Retained Earnings	Total Shareholders' Equity
Balances at March 31, 2019	9,284,118	$	198,125,649	353,990,976	$	552,116,625
Proceeds from exercise of stock options	55,472	3,654,097		—	3,654,097
Common stock repurchases	(1,392,180)	—		(190,010,912)	(190,010,912)
Restricted common stock expense under stock option plan, net of cancellations ($246,650)	(1,568)	13,129,717		—	13,129,717
Stock option expense	—	3,226,110		—	3,226,110


Net income	—	—		11,121,573	11,121,573
Balances at September 30, 2019	7,945,842	$	218,135,573	175,101,637	$	393,237,210


CONSOLIDATED STATEMENT OF OPERATIONS
	Three months ended September 30, 2019						Six months ended September 30, 2019
	As originally filed		Adjustments		As revised		As originally filed		Adjustments		As revised






Income tax expense (benefit)	$	(395,121)	$	1,706,827	$	1,311,706	$	1,967,701	$	1,706,827	$	3,674,528

Net income	$	4,220,001	$	(1,706,827)	$	2,513,174	$	12,828,400	$	(1,706,827)	$	11,121,573


	Nonaccrual Financial Assets
Customer Tenure	As of September 30, 2020		As of March 31, 2020		Financial Assets 61 Days or More Past Due, Not on Nonaccrual Status		Nonaccrual Financial Assets With No Allowance as of September 30, 2020		Interest Income Recognized
0 to 5 months	$	11,676,657	$	26,040,593	$	0	$	0	$	1,062,504
6 to 17 months	12,746,931		17,466,450		0		0		1,238,745
18 to 35 months	10,032,544		13,723,295		0		0		1,045,401
36 to 59 months	6,825,858		10,071,288		0		0		815,245
60+ months	29,250,038		44,293,545		0		0		3,624,427

Tax advance loans	1,203,653		41,573		0		0		0
Unearned interest, insurance and fees	(18,733,073)		(28,510,140)		—		—
Total	$	53,002,608	$	83,126,604	$	0	$	0	$	7,786,322


March 31, 2020	Loans individually evaluated for impairment (impaired loans)		Loans collectively evaluated for impairment	Total

Gross loans in bankruptcy, excluding contractually delinquent	$	5,165,752	0	5,165,752
Gross loans contractually delinquent	70,719,727		0	70,719,727
Loans not contractually delinquent and not in bankruptcy	0		1,133,985,887	1,133,985,887
Gross loan balance	75,885,479		1,133,985,887	1,209,871,366
Unearned interest and fees	(16,848,762)		(292,131,962)	(308,980,724)
Net loans	59,036,717		841,853,925	900,890,642
Allowance for credit losses	(54,090,509)		(42,397,347)	(96,487,856)
Loans, net of allowance for credit losses	$	4,946,208	799,456,578	804,402,786


September 30, 2019	Loans individually evaluated for impairment (impaired loans)		Loans collectively evaluated for impairment	Total

Gross loans in bankruptcy, excluding contractually delinquent	$	5,919,237	0	5,919,237
Gross loans contractually delinquent	67,515,456		0	67,515,456
Loans not contractually delinquent and not in bankruptcy	0		1,200,712,101	1,200,712,101
Gross loan balance	73,434,693		1,200,712,101	1,274,146,794
Unearned interest and fees	(15,408,232)		(318,918,117)	(334,326,349)
Net loans	58,026,461		881,793,984	939,820,445
Allowance for losses	(52,358,792)		(49,110,521)	(101,469,313)
Loans, net of allowance for losses	$	5,667,669	832,683,463	838,351,132


	March 31, 2020		September 30, 2019
Credit risk
Consumer loans- non-bankrupt accounts	$	1,203,552,152	$	1,266,666,753
Consumer loans- bankrupt accounts	6,319,214		7,480,041
Total gross loans	$	1,209,871,366	$	1,274,146,794

Consumer credit exposure
Credit risk profile based on payment activity, performing	$	1,104,130,714	$	1,171,654,200
Contractual non-performing, 61 or more days delinquent (1)	105,740,652		102,492,594
Total gross loans	$	1,209,871,366	$	1,274,146,794

Credit risk profile based on customer type
New borrower	$	124,800,193	$	152,893,420
Former borrower	127,108,125		143,234,099
Refinance	935,448,882		954,842,006
Delinquent refinance	22,514,166		23,177,269
Total gross loans	$	1,209,871,366	$	1,274,146,794


	March 31, 2020			September 30, 2019
Contractual basis:
30-60 days past due	$	49,137,102		$	55,199,165
61-90 days past due	35,020,925			34,977,138
91 days or more past due	70,719,727			67,515,456
Total	$	154,877,754		$	157,691,759

Percentage of period-end gross loans receivable	12.8		%	12.4		%

Recency basis:
30-60 days past due	$	48,206,910		$	54,101,357
61-90 days past due	28,450,942			30,534,482
91 days or more past due	50,669,837			51,155,873
Total	$	127,327,689		$	135,791,712

Percentage of period-end gross loans receivable	10.5		%	10.7		%


	September 30, 2020		September 30, 2019

Three months ended	$	496,721	$	1,515,230
Six months ended	$	496,721	$	4,350,557


CONSOLIDATED BALANCE SHEET
	As of September 30, 2019
	As originally filed		Adjustments		As revised
Deferred income taxes, net	$	31,898,939	$	(1,706,827)	$	30,192,112

Other assets, net	16,151,630		8,681,915		24,833,545
Total assets	1,077,816,368		6,975,088		1,084,791,456
Income taxes payable	1,521,276		9,236,080		10,757,356
Accounts payable and accrued expenses	42,389,238		(554,165)		41,835,073
Total liabilities	682,872,331		8,681,915		691,554,246
Shareholders' equity	394,944,037		(1,706,827)		393,237,210
Total liabilities and shareholders' equity	$	1,077,816,368	$	6,975,088	$	1,084,791,456


SELECTED CONSOLIDATED STATISTICS
	Three months ended September 30, 2019						Six months ended September 30, 2019
	As originally filed		Adjustments		As revised		As originally filed		Adjustments		As revised




Return on average equity (trailing 12 months)	10.8	%	(0.3)	%	10.5	%	10.8	%	(0.3)	%	10.5	%