COMPANY PROFILE
WORLD ACCEPTANCE CORPORATION (“World”), founded in 1962, is one of the largest small-loan consumer
finance companies in the United States, helping over one million customers to unlock their “financial good” annually.
Headquartered in Greenville, South Carolina, World offers the strength and technology of a national financial institution with the
personal service of a local neighborhood branch.
World emphasizes quality customer service and the building of strong personal relationships with its customers. As a result, a
substantial portion of World's new customers are from customer referrals. During fiscal 2022, World served 1.2 million customers
and loaned $3.3 billion in 1.6 million transactions. World's loans are generally less than $5,000 with maturities of less than 42
months. World’s average gross loan, including refinances, made in fiscal 2022 was $2,085, and the average contractual maturity
was approximately thirteen months.
As of July 6, 2022, World operated 1,146 offices in Alabama, Georgia, Idaho, Illinois, Indiana, Kentucky, Louisiana,
Mississippi, Missouri, New Mexico, Oklahoma, South Carolina, Tennessee, Texas, Utah, and Wisconsin.
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TABLE OF CONTENTS
Item No. Contents
PART I
Business
Risk Factors
Unresolved Staff Comments
Properties
Legal Proceedings
Mine Safety Disclosures
1.
1A.
1B.
2.
3.
4.
PART II
5.
6.
7.
7A.
8.
9.
9A.
9B.
9C.
10.
11.
12.
13.
14.
15.
16.
Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
[Reserved]
Management's Discussion and Analysis of Financial Condition and Results of Operations
Quantitative and Qualitative Disclosures About Market Risk
Financial Statements and Supplementary Data
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
Controls and Procedures
Other Information
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
PART III
Directors, Executive Officers and Corporate Governance
Executive Compensation
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Certain Relationships and Related Transactions, and Director Independence
Principal Accountant Fees and Services
PART IV
Exhibits and Financial Statement Schedules
Form 10-K Summary
SIGNATURES
Page
5
16
29
29
30
30
30
33
33
41
42
79
79
80
80
80
80
80
80
80
81
81
82
2
TO OUR SHAREHOLDERS
(Dollars in thousands, except per share and statistical data)
Select Statement of Operations Data:
2022
2021
Change (%)
Years Ended March 31,
Total revenues
Net income
Diluted earnings per share
Selected Balance Sheet Data:
Gross loans receivable
Total assets
Total debt
Total shareholders' equity
Selected Ratios:
Return on average assets
Return on average shareholders' equity
Shareholders' equity to assets
Statistical Data:
Number of customers at period end
Number of loans made
Number of offices
582,388
525,533
10.8%
53,920
88,282
-38.9%
8.47
13.23
-36.0%
1,522,789
1,104,746
1,218,296
954,269
696,973
405,008
373,024
404,927
4.8%
13.4%
30.6%
9.1%
22.8%
42.4%
801,078
727,638
1,566,509
1,395,932
1,167
1,205
37.8%
27.7%
72.1%
-7.9%
-47.3%
-41.2%
-27.8%
10.1%
12.2%
-3.2%
See our Consolidated Financial Statements and accompanying notes included herein.
3
To Our Shareholders
Shareholders,
In prior letters, I’ve shared my view on stewarding long-term success at World Acceptance. This perspective continues to guide
decisions about how we invest in customers, infrastructure, and leadership. During our 60th year and with the backdrop of an
uncertain economy, it is vital that this brand of stewardship is not only about investing and developing, but also about fortifying
and safeguarding what we’ve built for the next 60 years.
Before I discuss the year’s many operational improvements, I’d like to first touch on our customers’ journey. It is a journey that
parallels the company’s journey in many ways. As a provider of near- and sub-prime financial services, our success derives
from our customers’ success. We design our products to create possibilities and “unlock financial good,” as we like to say. I
have seen, time and time again, that the most impactful benefit we can deliver to our customers is to give them the chance to
build and use credit responsibly. This process of building and protecting credit creates a self-perpetuating momentum up the
credit spectrum I call “credit mobility.” In a very real sense, we’re providing grace and opportunity for marginalized consumers
through access to credit and other financial services, and our success in helping them gain positive momentum is a source of
great pride.
Access to credit that also helps consumers improve their credit history is an important foundation of economic mobility for
most Americans. Over the last year, as customers had a positive experience with World and their credit history improved, we
offered lower rates to more than 4 out of 5 customers. Further, over one-third of them had a nominal APR reduction of at least
20%. More importantly, more than 80% of our deep sub-prime performing new customers improved their credit score enough
to elevate themselves out of that categorization, opening new financial possibilities. Unlike the increasingly mainstream
products that allow consumers to improve their credit score without an extension of credit, we can help them accomplish it
while also meeting an immediate financial need.
Similar to a customer protecting their hard-earned credit, so must we protect what we have built coming off of a record year of
business. Last year, we experienced extraordinary new customer demand and new customer loan volumes that were more than
70% higher than any prior year. Our overall loan portfolio grew by 38% and customer retention increased as improvements
across our customer experience spectrum took shape. With the benefit of high demand and high customer satisfaction, we have
and will continue to further improve credit quality and retain our best customers with an eye toward the uncertain direction of
the overall economy.
We’ve also made significant improvements to fortify our core operations and reduce our cost to service. Our G&A expenses
have decreased year over year for the last two years both nominally and relative to revenue, from 58% as a percent of revenue
in FY 2020 and 2021 to 51% in FY 2022. Through a combination of improvements in technology, management and scale, G&A
has also decreased as a percent of the average portfolio from 27% in the prior two years to 21% this year. In anticipation of
further growth this year, we diversified our debt and capital structure through a bond issuance and have further plans underway,
moves we expect will prove especially valuable considering current demand levels and the interest rate environment.
The implementation of the CECL accounting standard in 2021 has changed the way we provision for loan losses and will
continue to significantly obscure financials by depressing earnings during periods of rapid portfolio growth and exaggerating
earnings during rapid contractions. We are more focused on increasing the long-term earnings value of our portfolio. During
this year, our operating cash flow increased 30% over last year to $281M, or $44 per share.
Finally, we’re incredibly proud of the amazing World team and our commitment to each other and our customers. We continue
to win Top Workplaces awards across the country, including being a Top Workplace USA winner for the second year in a row.
These distinctions are earned by our team members who view World as a family, and it’s immensely gratifying to work with
great leaders at every level in the company who value each other and their communities in this way. Our amazing team has
worked incredibly hard to return to growth in fiscal 2022 and is working equally hard to steward World into the future.
Sincerely,
Chad Prashad
President & Chief Executive Officer
4
Introduction
World Acceptance Corporation, a South Carolina corporation, operates a small-loan consumer finance (installment loan)
business in sixteen states as of March 31, 2022. As used herein, the "Company,” “we,” “our,” “us,” or similar formulations
include World Acceptance Corporation and each of its subsidiaries, except as the context otherwise requires. All references in
this report to “fiscal 2023” are to the Company’s fiscal year ending March 31, 2023; all references in this report to "fiscal 2022"
are to the Company's fiscal year ended March 31, 2022; all references to “fiscal 2021” are to the Company’s fiscal year ended
March 31, 2021; all references to “fiscal 2020” are to the Company’s fiscal year ended March 31, 2020; all references to "fiscal
2018" are to the Company's fiscal year ended March 31, 2018; and all references to "fiscal 2015" are to the Company's fiscal
year ended March 31, 2015.
PART I.
Item 1.
Description of Business
General. The Company, which has continuously operated since July 1962, is now one of the nation's largest small-loan
consumer finance companies, offering short-term small installment loans, medium-term larger installment loans, related credit
insurance and ancillary products and services to individuals. The Company offers traditional installment loans generally
between $500 and $6,000, with the average loan origination being $2,085 in fiscal 2022. The Company operates 1,167 branches
in Alabama, Georgia, Idaho, Illinois, Indiana, Kentucky, Louisiana, Mississippi, Missouri, New Mexico, Oklahoma, South
Carolina, Texas, Tennessee, Utah, and Wisconsin as of March 31, 2022. The Company generally serves individuals with limited
access to other sources of consumer credit such as banks, credit unions, other consumer finance businesses and credit card
lenders. The Company also offers income tax return preparation services to its loan customers and other individuals.
The traditional installment loan industry is a highly fragmented segment of the consumer lending industry. Installment loan
finance companies generally make loans to individuals of less than $2,000 with maturities of less than 18 months. These
companies approve loans on the basis of the personal creditworthiness of their customers and maintain close contact with
borrowers to encourage the repayment or, when appropriate to meet the borrower’s needs, the refinancing of loans. By contrast,
commercial banks, credit unions and some other consumer finance businesses typically make loans of more than $5,000 with
maturities of greater than one year. Those financial institutions generally approve consumer loans on the security of qualifying
personal property pledged as collateral or impose more stringent credit requirements than those of small-loan consumer finance
companies. As a result of their higher credit standards and specific collateral requirements, commercial banks, credit unions and
other consumer finance businesses typically charge lower interest rates and fees and experience lower delinquency and charge-
off rates than do small-loan consumer finance companies. Traditional installment loan companies generally charge higher
interest rates and fees to compensate for the greater risk of delinquencies and charge-offs and increased loan administration and
collection costs.
The majority of the participants in the industry are independent operators with generally less than 100 branches. We believe that
competition between small-loan consumer finance companies occurs primarily on the basis of the strength of customer
relationships, customer service and reputation in the local community. We believe that our relatively large size affords us a
competitive advantage over smaller companies by increasing our access to, and reducing our cost of, capital.
Small-loan consumer finance companies are subject to extensive regulation, supervision, and licensing under various federal
and state laws and regulations, as well as local ordinances. Consumer loan offices are licensed under state laws which, in many
states, establish maximum loan amounts, interest rates, permissible fees and charges and other aspects of the operation of small-
loan consumer finance companies. Furthermore, the industry is subject to numerous federal laws and regulations that affect
lending operations. These federal laws require companies to provide complete disclosure of the terms of each loan to the
borrower in accordance with specified standards prior to the consummation of the loan transaction. Federal laws also prohibit
misleading advertising, protect against discriminatory lending practices and prohibit unfair, deceptive, and abusive credit
practices.
Impact of COVID-19. COVID-19 has continued to have a widespread and unprecedented global impact. While most locations
have remained open throughout the pandemic, we have implemented enhanced safety measures in all of our branches. In each
branch, steps have been taken to reduce the spread of the virus and ensure the safety of our employees and customers. Branch
team members have remained a positive and dedicated resource for customers during these uncertain times.
See Part I, Item 1A for a discussion of our risks related to COVID-19.
5
Branch Expansion and Consolidation. As of March 31, 2022, the Company had 1,167 branches in 16 states, with over 100
branches located in each of Texas, Georgia, and Tennessee. During fiscal 2022, the Company did not purchase or otherwise
open any new branches, but merged 38 branches into other existing branches due to their inability to generate sufficient returns
or for efficiency reasons. In fiscal 2023, the Company may open or acquire new branches in its existing market areas or
commence operations in new states where it believes demographic profiles and state regulations are attractive. The Company
may merge other branches on a case-by-case basis based on profitability or other factors. The Company's ability to continue
existing operations and expand its operations in existing or new states is dependent upon, among other things, laws and
regulations that permit the Company to operate its business profitably and its ability to obtain necessary regulatory approvals
and licenses. There can be no assurance that such laws and regulations will not change in ways that adversely affect the
Company or that the Company will be able to obtain any such approvals or consents. See Part 1, Item 1A, “Risk Factors” for a
further discussion of risks to our business and plans for expansion.
The Company's expansion is also dependent upon its ability to identify attractive locations for new branches and to hire suitable
personnel to staff, manage, and supervise new branches. In evaluating a particular community, the Company examines several
factors, including the demographic profile of the community, the existence of an established small-loan consumer finance
market and the availability of suitable personnel.
Product Offerings
Installment Loans. We primarily offer pre-computed and interest bearing consumer installment loans with interest and fee
income from such loans accounting for 83.4%, 85.8%, and 86.2% of our total revenues in fiscal years 2022, 2021, and 2020,
respectively. Our loans are payable in fully-amortizing monthly installments with terms generally from 7 to 27 months and are
prepayable at any time without penalty.
The following table sets forth information about our loan products for fiscal 2022:
Small loans
Large loans
_______________________________________________________
(1) Gross loan net of finance charges.
$
Minimum
Origination (1)
$
Maximum
Origination (1)
2,450
25,000
500 $
2,500 $
Minimum
Term
(Months)
7
9
Maximum
Term
(Months)
36
60
Specific allowable interest, fees, and other charges vary by state. The finance charge is a combination of origination or
acquisition fees, account maintenance fees, monthly account handling fees, interest and other charges permitted by the relevant
state laws. As of March 31, 2022, we no longer offer loans with annual percentage rates, including interest, fees and other
charges as calculated in accordance with the Federal Truth in Lending Act, above 100%. The average annual percentage rate of
our portfolio was 47.4% as of March 31, 2022.
As of March 31, 2022, annual percentage rates applicable to our gross loans receivable as defined by the Truth in Lending Act
were as follows:
Low
High
Amount
Percentage of total
gross loans
receivable
— %
37 %
51 %
61 %
71 %
81 %
91 %
101 %
121 %
36 % $
50 %
60 %
70 %
80 %
90 %
100 %
120 %
>121%
6
691,711,646
342,213,621
168,837,346
50,246,002
23,031,267
123,828,541
122,800,448
107,901
12,088
1,522,788,860
45.4
22.5
11.1
3.3
1.5
8.1
8.1
—
—
100
Insurance Related Operations. The Company, as an agent for an unaffiliated insurance company, markets and sells credit life,
credit accident and health, credit property and auto, unemployment, and accidental death and dismemberment insurance in
connection with its loans in selected states where the sale of such insurance is permitted by law. Credit life insurance provides
for the payment in full of the borrower's credit obligation to the lender in the event of death. The Company offers credit
insurance for all loans originated in Georgia, Indiana, Kentucky, Louisiana, Mississippi, Missouri, and South Carolina, and on a
more limited basis in Alabama, Oklahoma, Tennessee, Texas, New Mexico, Idaho, and Utah. Customers in those states typically
obtain such credit insurance through the Company. Charges for such credit insurance are made at filed, authorized rates and are
stated separately in the Company's disclosure to customers, as required by the Truth in Lending Act and by various applicable
state laws. In the sale of insurance policies, the Company, as an agent, writes policies only within limitations established by its
agency contracts with the insurer. The Company does not sell credit insurance to non-borrowers. These insurance policies
provide for the payment of the outstanding balance of the Company's loan upon the occurrence of an insured event. The
Company earns a commission on the sale of such credit insurance, which, for most products, is directly impacted by the claims
experience of the insurance company on policies sold on its behalf by the Company. In states where commissions on certain
products are capped, the commission earned is not directly impacted by the claims experience.
The Company has a wholly-owned, captive insurance subsidiary that reinsures a portion of the credit insurance sold in
connection with loans made by the Company. Certain coverages currently sold by the Company on behalf of the unaffiliated
insurance carrier are ceded by the carrier to the captive insurance subsidiary, providing the Company with an additional source
of income derived from the earned reinsurance premiums. In fiscal 2022, the captive insurance subsidiary reinsured
approximately 10.9% of the credit insurance sold by the Company and contributed approximately $2.3 million to the
Company's total revenue.
The table below shows the types of insurance and ancillary products the Company sells by state as of March 31, 2022:
Credit
Property and
Auto
X
X
X
Credit Life
X
X
X
Credit Accident
and Health
X
X
X
X
X
X
X
Alabama (1)
Georgia
Idaho
Illinois
Indiana
Kentucky
Louisiana
Mississippi
Missouri
New Mexico
Oklahoma (1)
South Carolina
Tennessee (1)
Texas (1)
Utah
Wisconsin
_______________________________________________________
(1) Credit insurance is offered for certain loans.
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
Unemployment
Accidental
Death &
Dismemberment Non-file
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
Automobile
Club
Membership
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
Non-Filing Insurance. The Company typically does not perfect its security interest in collateral securing its smaller loans by
filing UCC financing statements. Non-filing insurance premiums are equal in aggregate amount to the premiums paid by the
Company to purchase non-filing insurance coverage from an unaffiliated insurance company. Under its non-filing insurance
coverage, the Company is reimbursed for losses on loans resulting from its policy not to perfect its security interest in collateral
securing the loans.
Automobile Club Memberships. The Company also offers automobile club memberships to its borrowers in Alabama, Georgia,
Idaho, Indiana, Kentucky, Louisiana, Mississippi, Missouri, New Mexico, Oklahoma, Tennessee, Texas, South Carolina, Utah
and Wisconsin, as an agent for an unaffiliated automobile club. Club memberships entitle members to automobile breakdown
coverage, towing reimbursement and related services. The Company is paid a commission on each membership sold, but has no
responsibility for administering the club, paying benefits or providing services to club members. The Company primarily sells
automobile club memberships to borrowers.
7
Tax Preparation Services and Advances. The Company also offers income tax return preparation and electronic filing
services. This program is provided in all but a few of the Company’s branches. The Company prepared approximately 81,000,
77,000 and 84,000 returns in fiscal years 2022, 2021, and 2020, respectively. Net revenue generated by the Company from this
program during fiscal 2022, 2021, and 2020 amounted to approximately $21.7 million, $18.1 million, and $20.9 million,
respectively. In addition, our tax customers are eligible to receive an interest and fee-free tax advance loan which is generally a
percentage of the anticipated tax refund amount. The Company believes that this is a beneficial service for its existing customer
base as well as non-loan customers, and it plans to continue to promote this program.
The following table sets forth information about our tax advance loan product for fiscal 2022:
Tax advance loans
Minimum
Origination
500
Maximum
Origination
5,000
Minimum
Term
(Months)
8
Maximum
Term
(Months)
8
Loan Receivables. The following table sets forth the composition of the Company's gross loans receivable by state at March 31
of each year from 2013 through 2022:
State
2022
2021
2020
2019
At March 31,
2017
2018
2016
2015
2014
2013
7 %
13
1
10
3
6
3
2
7
2
6
8
10
20
1
1
100 %
Alabama
Georgia
Idaho (1)
Illinois
Indiana (2)
Kentucky
Louisiana
Mississippi (3)
Missouri
New Mexico
Oklahoma
South Carolina
Tennessee
Texas
Utah (4)
Wisconsin (5)
6 %
13
1
8
2
7
3
2
8
2
6
10
11
19
1
1
100 %
_______________________________________________________
(1) The Company commenced operations in Idaho in October 2014.
(2) The Company commenced operations in Indiana in September 2012.
(3) The Company commenced operations in Mississippi in September 2013.
(4) The Company commenced operations in Utah in October 2018.
5 %
13
1
8
2
8
3
1
8
2
6
10
11
19
1
2
100 %
5 %
13
1
7
2
8
3
1
7
2
7
9
12
21
—
2
100 %
5 %
14
—
7
2
9
2
1
7
2
7
10
13
19
—
2
100 %
Total
4 %
15
—
7
2
10
2
1
7
2
7
11
13
18
—
1
100 %
6 %
13
—
7
1
10
2
—
8
2
8
10
13
19
—
1
100 %
5 %
13
—
7
1
10
2
—
8
2
8
11
13
19
—
1
100 %
4 %
13
—
8
1
9
2
—
7
2
7
12
13
21
—
1
100 %
4 %
14
—
7
—
10
2
—
7
2
7
12
14
20
—
1
100 %
8
The following table sets forth the total number of loans, the average gross loan balance, and the gross loan balance by state at
March 31, 2022:
Total
Number
of Loans
Average
Gross Loan
Balance
Alabama
Georgia
Idaho
Illinois
Indiana
Kentucky
Louisiana
Mississippi
Missouri
New Mexico
Oklahoma
South Carolina
Tennessee
Texas
Utah
Wisconsin
Total
57,034 $
101,014
8,362
49,377
24,589
48,008
31,718
25,086
40,405
19,530
46,712
65,749
75,268
198,674
5,821
12,477
809,824 $
Gross Loan
Balance
(thousands)
1,745 $
99,519
1,988
200,847
1,652
13,815
2,970
146,640
1,676
41,209
2,026
97,250
1,620
51,373
1,298
32,573
2,664
107,635
1,885
36,810
1,915
89,459
1,899
124,829
1,897
142,749
1,534
304,716
1,904
11,086
1,786
22,279
1,880 $ 1,522,789
Seasonality. The Company's highest loan demand occurs generally 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. Consequently, the Company experiences significant seasonal fluctuations in its operating results and cash
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.
Operations
Lending Operations. The Company seeks to provide short-term consumer installment loans to the segment of the population
that has limited access to other sources of credit. In evaluating the creditworthiness of potential customers, the Company
primarily examines the individual's discretionary income, length of current employment and/or sources of income, duration of
residence, and prior credit experience. Loans are made to individuals on the basis of their discretionary income and other
factors and are limited to amounts we believe that customers can reasonably be expected to repay from that income given our
assessment of their stability and ability and willingness to pay. The Company also generates a proprietary credit score in
assisting loan decisions to potential new customers that evaluates key attributes such as payment history, outstanding debt,
length of credit history, number of credit inquiries as well as credit mix. All loan applicants are required to complete
standardized credit applications online, in person, or by telephone. Each of the Company's local branches are equipped to
perform rapid background, employment, and credit bureau checks and approve loan applications promptly. The Company's
employees verify the applicant's sources of income and credit history. Substantially all new customers are required to submit a
listing of personal property that will serve as collateral to secure the loan, but the Company does not rely on the value of such
collateral in the loan approval process and generally does not perfect its security interest in that collateral. Accordingly, if the
customer were to default in the repayment of the loan, the Company may not be able to recover the outstanding loan balance by
resorting to the sale of collateral.
New Loans to Current and Former Customers. The Company believes that development and continual reinforcement of
personal relationships with customers improves the Company's ability to monitor their creditworthiness, reduce credit risk, and
generate customer loyalty. It is not unusual for the Company to have made a number of loans to the same customer over the
course of several years, many of which were refinanced with a new loan after the borrower had reduced the existing loan's
outstanding balance by making multiple payments. In determining whether to refinance existing loans, the Company typically
requires loans to be current on a recency basis, and repeat customers are generally required to complete a new credit application
if they have not completed one within the prior year.
9
A refinancing represents a new loan transaction with a present customer in which a portion of the new loan proceeds is used to
repay the balance of an existing loan and the remaining portion is advanced to the customer. In many cases the existing
customer’s past performance and established creditworthiness with the Company qualifies that customer for a larger loan. For
fiscal 2022, 2021, and 2020, the percentages of the Company's loan originations that were refinancings of existing loans were
63.9%, 69.2%, and 66.9%, respectively.
The Company allows refinancing of delinquent loans on a case-by-case basis for those customers who otherwise satisfy the
Company's credit standards. Each such refinancing is carefully examined before approval in an effort to avoid increasing credit
risk. A delinquent loan generally may be refinanced only if the customer has made payments that, together with any credits of
insurance premiums or other charges to which the customer is entitled in connection with the refinancing, reduce the balance
due on the loan to an amount equal to or less than the original cash advance made in connection with the loan. The Company
does not allow the amount of the new loan to exceed the original amount of the existing loan. The Company believes that
refinancing delinquent loans for certain customers who have made periodic payments allows the Company to increase its
average loans outstanding and its interest, fees and other income without experiencing a significant increase in loan
losses. These refinancings also provide a resolution to temporary financial setbacks for these borrowers and sustain their credit
rating. Refinancings of delinquent loans represented 1.1%, 1.5%, and 1.3% of the Company’s loan volume in fiscal 2022, 2021,
and 2020, respectively.
Approximately 15.0%, 14.7%, and 12.7% of the Company's loans were generated through the origination of new loans to
previous customers in fiscal 2022, 2021, and 2020, respectively.
Collection Operations. To reduce late payment risk, local branch staff encourage customers to inform the Company in advance
of expected payment problems. Local branch staff also promptly contact delinquent customers following any payment due date
and thereafter remain in close contact with such customers through phone calls or letters until payment is received or some
other resolution is reached. The Company also has a centralized collections team that primarily focuses on customers who have
become more than 90 days past due on a recency basis. In Alabama, Georgia, Idaho, Illinois, Indiana, Kentucky, Louisiana,
Mississippi, Missouri, New Mexico, Oklahoma, Tennessee, Utah, and Wisconsin, the Company is permitted under state laws to
garnish customers' wages, within certain circumstances, for repayment of loans, but the Company does not otherwise generally
resort to litigation for collection purposes and rarely attempts to foreclose on collateral.
Monitoring and Supervision. Several levels of management monitor and supervise the operations of each of the Company's
branches. Senior management has access to daily delinquency, loan volume, charge-off, and other statistical data on a
consolidated, state and branch level. District Managers evaluate branch performance in their geographic area, communicate
regularly with branch managers regarding operations and submit standardized reports detailing their efforts and findings to the
Company's senior management. Regional vice presidents monitor the performance of all branches within their states and
communicate regularly with district managers. The Company takes a risk-based approach to determine internal audit frequency.
Each branch undergoes periodic audits which include an examination of cash balances and compliance with Company loan
approval, review and collection procedures, and compliance with federal and state laws and regulations.
Staff and Training. Local branches are staffed with a minimum of two employees. The branch manager supervises and
administers operations of the branch and is responsible for approving all borrower loan applications and requests for increases
in the amount of credit extended. Each branch generally has one or two financial service representatives who take loan
applications, process loan applications, apply payments, and assist in the preparation of operational reports, collection efforts,
and marketing activities. Larger branches may employ additional account specialists.
New employees are required to review detailed training materials that explain the Company's operating policies and
procedures. The Company tests each employee on the training materials during the first year of employment. In addition, each
branch associate completes an online training session and attends periodic training sessions outside the branch. The Company
utilizes an enhanced training tool, which provides continuous, real-time, online training to all locations. This allows for more
training opportunities to be available to all employees throughout the course of their career with the Company.
Advertising. The Company actively advertises through direct mail, digital platforms and by email and SMS/text, targeting both
its present and former customers and potential customers who have used other sources of consumer credit. In addition to the
general promotion of its loans for last-minute needs, back-to-school needs and other uses, the Company advertises extensively
during the October through December holiday season and in connection with new branch openings. The Company believes its
advertising contributes significantly to its ability to compete effectively with other providers of small-loan consumer
credit. Advertising expenses as a percent of revenue were approximately 3.1%, 3.3%, and 4.1% in fiscal 2022, 2021, and 2020,
respectively.
10
Competition. The small-loan consumer finance industry is highly fragmented, with numerous competitors. The majority of the
Company's competitors are independent operators with generally less than 100 branches. Competition from community banks
and credit unions is limited because they typically do not make loans of less than $5,000. We believe that online lending could
be affecting the consumer lending market within which we operate. While it currently appears online lenders are marketing to a
different customer segment than that of our primary customers, some of our customers may overlap.
The Company believes that competition between small-loan consumer finance companies occurs primarily on the basis of the
strength of customer relationships, customer service, and reputation in the local community. The Company believes that its
relatively larger size affords it a competitive advantage over smaller companies by increasing its access to, and reducing its cost
of, capital.
Several of the states in which the Company currently operates limit the size of loans made by small-loan consumer finance
companies and prohibit the extension of more than one loan to a customer by any one company. As a result, many customers
borrow from more than one finance company, which enables the Company, subject to the limitations of various consumer
protection and privacy statutes, including, but not limited to, the Fair Credit Reporting Act and the Gramm-Leach-Bliley Act, to
obtain information on the credit history of specific customers from other consumer finance companies.
Human Capital Resources
Our Mission. At World Acceptance Corporation, our employees (who we call our “Team Members”) create possibilities by
embracing our mission to partner with customers to unlock their financial good. Creating a culture of opportunity for our Team
Members is key to supporting this mission.
Team Members. As a people-focused finance company, we value our Team Members by investing in competitive compensation
and benefit packages and a vibrant, team-oriented environment centered on professional service and open communication. We
strive to build and maintain a high-performing culture and believe in operating by strong values.
We value feedback from our team and participated in an annual engagement survey that resulted in being named by Energage as
a Top Workplaces USA winner in 2022 and 2021.
During fiscal 2022, our human capital efforts were focused on accelerating the transformation of our technology for workforce
management through investments in upgraded systems and processes, and continuing to increase our agility to meet the quickly
changing needs of the business. The Company maintains strong relations with its employees and seeks to hire people who will
become long-term employees, and, as a result, the vast majority of our field leadership has been promoted from within.
As of March 31, 2022, we employed 3,121 full and part time employees across our sixteen-state footprint, approximately 332 of
whom were corporate Team Members located in our main corporate office in Greenville, South Carolina and approximately
2,789 of whom were branch-based Team Members located in 16 states throughout the United States. None of our Team
Members belong to a union or are party to any collective bargaining or similar agreement.
We strive toward having a powerful and diverse team of Team Members, knowing we are better together with our combined
wisdom and intellect. With a commitment to equality, inclusion and workplace diversity, we focus on understanding, accepting,
and valuing the differences between people.
As of March 31, 2022, our Team Members had the following gender, race and ethnicity demographics:
Female
Male
Undeclared
White
Hispanic or Latino
Black or African American
Other Race/Ethnicity
Not provided
Gender - All Team Members
Race/Ethnicity - All Team Members
85.19%
14.78%
0.03%
57.62%
21.00%
16.39%
3.61%
1.38%
11
Total Rewards. We provide a comprehensive suite of benefits designed to help Team Members and their families stay healthy,
meet their financial goals, protect their income and help them balance their work and personal lives. We provide competitive
pay, as well as a wide array of benefits including the following:
• Healthcare benefits, including medical, dental and vision, flexible spending accounts
• A 401(k) Plan (with an employer matching contribution)
• Company-paid basic life insurance and long-term and short-term disability
• Vacation, sick and holiday paid-time off, as well as volunteer paid time off and paid parental leave
• Time off donation program for Team Members experiencing medical emergencies
•
Financial assistance program for Team Members impacted by natural disasters
Training and Development. We believe the development of our Team Members is key to our future success and are focused on
delivering programs designed to increase our internal talent pools at all levels within the organization. Some examples of these
programs include:
• BOLT – developing high performing and high potential Account Specialists to prepare them for Branch Manager roles
• Emerging Leaders – developing high performing and high potential Branch Managers to prepare them for District
Manager roles
COVID Response. The impact of the global health crisis brought numerous changes, requiring everyone to embrace a spirit of
flexibility, adaptability, and innovation. In addition to the adoption of virtual and remote technology for company
communications, our corporate Team Members, branch managers, and auditors shifted to remote work as early as mid-March of
2020. Team Members who were directly impacted by COVID were given an additional five days of paid leave to allow them
time to recover and not fully use all sick or vacation time. We added flexible branch hours to better accommodate the needs of
essential workers and parents impacted by school closures, as well as a digital loan application and funding process and
curbside service to support social distancing while maintaining customers access to our products.
Information about our Executive Officers. The names and ages, positions, terms of office and periods of service of each of the
Company's executive officers (and other business experience for executive officers who have served as such for less than five
years) are set forth below. The term of office for each executive officer expires upon the earlier of the appointment and
qualification of a successor or such officer's death, resignation, retirement, or removal.
Name and Age
Position
R. Chad Prashad (41)
President and Chief
Executive Officer
Period of Service as Executive Officer and
Pre-Executive Officer Experience (if an
Executive Officer for Less Than Five Years)
• President and Chief Executive Officer since
June 2018
• Senior Vice President, Chief Strategy &
Analytics Officer from February 2018 to June
2018
• Vice President of Analytics from June 2014
to February 2018
• Senior Director of Strategy Development for
Resurgent Capital Services (a consumer debt
managing and servicing company) from 2013
to June 2014 Director of Legal Strategy for
Resurgent Capital Services from 2009 to
2013
12
Name and Age
John L. Calmes Jr. (42)
Position
Executive Vice President,
Chief Financial and
Strategy Officer, and
Treasurer
D. Clinton Dyer (49)
Executive Vice President
and Chief Branch
Operations Officer
Luke J. Umstetter (42)
Senior Vice President,
General Counsel, Chief
Compliance Officer and
Secretary
A. Lindsay Caulder (46)
Senior Vice President,
Human Resources
Jason E. Childers (47)
Senior Vice President,
Information Technology
Scott McIntyre (45)
Senior Vice President,
Accounting
Period of Service as Executive Officer and
Pre-Executive Officer Experience (if an
Executive Officer for Less Than Five Years)
• Executive Vice President, Chief Financial
•
and Strategy Officer and Treasurer since
October 2018
Senior Vice President, Chief Financial
Officer and Treasurer from November 2015
to October 2018
• Vice President, Chief Financial Officer and
Treasurer from December 2013 to November
2015
• Director of Finance - Corporate and
•
Investment Banking Division of Bank of
Tokyo-Mitsubishi UFJ in 2013
Senior Manager of PricewaterhouseCoopers
from 2011 to 2013; Manager of
PricewaterhouseCoopers from 2008 to 2011
• Executive Vice President and Chief Branch
Operations Officer since February 2018
• Executive Vice President of Branch
Operations from September 2016 to February
2018
Senior Vice President, Southeastern Division
from November 2015 to September 2016
Senior Vice President, Central Division from
June 2005 to November 2015; Vice
President, Operations –Tennessee and
Kentucky from April 2002 to June 2005
Senior Vice President, Secretary and General
Counsel since August 2018
• General Counsel and Chief Compliance
Officer for Shellpoint Mortgage Servicing
from December 2015 to August 2018
• General Counsel for Global Lending Services
from May 2015 to December 2015;
Managing Counsel for Resurgent Capital
Services, June 2009 to May 2015
•
Senior Vice President, Human Resources
since October 2018
• Vice President, Human Resources from
February 2016 to October 2018
• Divisional Vice President - Human Resources
of Family Dollar Corporation, a nationwide
variety retail chain, from 2012 to 2016
• Director - Learning and Talent Acquisition of
Family Dollar Corporation from 2009-2012
Senior Vice President, Information
Technology since October 2018
• Vice President of IT Strategic Solutions from
April 2016 to October 2018
Partner and Head of IT at Sabal Financial
Group, LP from March 2009 until April 2016
Senior Vice President of Accounting since
October 2018
• Vice President of Accounting-US from June
•
•
•
•
•
•
2013 to October 2018
• Controller-US from June 2011 to June 2013
13
Government Regulation
Small-loan consumer finance companies are subject to extensive regulation, supervision, and licensing under various federal
and state statutes, ordinances, and regulations. See Part I, Item 1A, Risk Factors, for a discussion of the risks related to our
extensive regulation.
State Regulations and Legislation. The Company is subject to numerous state laws and regulations that affect our lending
activities. Many of these regulations impose detailed and complex constraints on the terms of our loans, lending forms and
operations. Further, there is a trend of increased state regulation on loan origination, servicing, and collection procedures, as
well as more detailed reporting and examinations, and coordination of examinations among the states. Failure to comply with
applicable laws and regulations could subject us to regulatory enforcement action that could result in the assessment against us
of civil, monetary, or other penalties. Generally, state regulations also establish minimum capital requirements for each local
branch. Accordingly, the ability of the Company to expand by acquiring existing branches and opening new branches will
depend in part on obtaining the necessary regulatory approvals.
For example, Texas regulation requires the approval of the Texas Consumer Credit Commissioner for the acquisition, directly or
indirectly, of more than 10% of the voting or common stock of a consumer finance company. A Louisiana statute prohibits any
person from acquiring control of 50% or more of the shares of stock of a licensed consumer lender, such as the Company,
without first obtaining a license as a consumer lender. The overall effect of these laws, and similar laws in other states, is to
make it more difficult to acquire a consumer finance company than it might be to acquire control of an unregulated company.
All of the Company's branches are licensed under the laws of the state in which the branch is located. Licenses in these states
are subject to renewal every year and may be revoked for failure to comply with applicable state and federal laws and
regulations. In the states in which the Company currently operates, licenses may be revoked only after an administrative
hearing.
The Company and its operations are regulated by a variety of state agencies in the jurisdictions in which the Company has
branches, including those related to banking, finance, financial institutions and consumer credit. These state regulatory agencies
audit the Company's local branches from time to time, and most state agencies perform an annual compliance audit of the
Company's operations in that state.
Insurance Regulations. The Company is also subject to state regulations governing insurance agents in the states in which it
sells credit insurance. State insurance regulations require that insurance agents be licensed, govern the commissions that may be
paid to agents in connection with the sale of credit insurance and limit the premium amount charged for such insurance. The
Company's captive insurance subsidiary is regulated by the insurance authorities of the Turks and Caicos Islands of the British
West Indies, where the subsidiary is organized and domiciled.
In addition, state authorities regulate and supervise our insurance operations. The extent of such regulation varies by product
and by state, but relate primarily to the following: licensing; conduct of business, including marketing and sales practices;
periodic financial and market conduct examination of the affairs of insurers; form and content of required financial reports;
standards of solvency; limitations on the payment of dividends and other affiliate transactions; types of products offered;
approval of policy forms and premium rates; formulas used to calculate any unearned premium refund due to an insured
customer; permissible investments; deposits of securities for the benefit of policyholders; reserve requirements for unearned
premiums, losses, and other purposes; and claims processing.
Consumer finance companies are affected by changes in state and federal statutes and regulations. The Company actively
participates in trade associations and in lobbying efforts in the states in which it operates and at the federal level. There have
been, and the Company expects that there will continue to be, media attention, initiatives, discussions, proposals, and legislation
regarding the entire consumer credit industry, as well as our particular installment loan business, and possible significant
changes to the laws and regulations that govern our business, or the authority exercised pursuant to those laws and
regulations. In some cases, proposed or pending legislative or regulatory changes have been introduced that would, if
enacted, have a material adverse effect on, or possibly even eliminate, our ability to continue our current business. We can give
no assurance that the laws and regulations that govern our business, or the interpretation or administration of those laws and
regulations, will remain unchanged or that any such future changes will not materially and adversely affect, or in the worst case,
eliminate, the Company’s lending practices, operations, profitability, or prospects. See “Federal legislation” below and Part I,
Item 1A, “Risk Factors,” for a further discussion of the potential impact of regulatory changes on our business.
14
Federal legislation. In addition to state and local laws and regulations, we are subject to numerous federal laws and regulations
that affect our lending operations. These laws include the Truth in Lending Act, the Equal Credit Opportunity Act, the Military
Lending Act, the Fair Credit Reporting Act, and the regulations thereunder, and the Federal Trade Commission's Credit
Practices Rule. These laws require the Company to provide complete disclosure of the principal terms of each loan to the
borrower prior to the consummation of the loan transaction, prohibit misleading advertising, protect against discriminatory
lending practices, and prohibit unfair, deceptive, or abusive credit practices. Violations of these statutes and regulations may
result in actions for damages, claims for refund of payments made, certain fines and penalties, injunctions against certain
practices, and the potential forfeiture of rights to repayment of loans.
Although these laws and regulations remained substantially unchanged for many years, over the last several years the laws and
regulations directly affecting our lending activities have been under review and are subject to change as a result of various
developments and changes in economic conditions, the make-up of the executive and legislative branches of government, and
the political and media focus on issues of consumer and borrower protection. See Part I, Item 1A, “Risk Factors".
Various legislative proposals addressing consumer credit transactions have been passed in recent years or are currently pending
in the U.S. Congress. Congressional members continue to receive pressure from consumer activists and other industry
opposition groups to adopt legislation to address various aspects of consumer credit transactions. The Dodd-Frank Wall Street
Reform and Consumer Protection Act (the “Dodd-Frank Act”) established the Consumer Financial Protection Bureau
(commonly referred to as the CFPB), which has sweeping regulatory, supervisory, and enforcement powers over providers of
consumer financial products and services, including explicit supervisory authority to examine and require registration of non-
depository lenders and to promulgate rules that can affect the practices and activities of lenders. The CFPB continues to actively
engage in the announcement and implementation of various plans and initiatives generally in the area of consumer financial
transactions. Some of these CFPB announced plans and initiatives, if implemented, would directly affect certain loan products
we currently offer and subject us to the CFPB’s supervisory authority. See Part II, Item 7, “Management’s Discussion and
Analysis of Financial Condition and Results of Operations - Regulatory Matters,” for more information regarding the CFPB's
regulatory initiatives.
In addition to the grant of certain regulatory powers to the CFPB, the Dodd-Frank Act gives the CFPB authority to pursue
administrative proceedings or litigation for violations of federal consumer financial laws. In these proceedings, the CFPB can
obtain cease and desist orders (which can include orders for restitution or rescission of contracts, as well as other kinds of
affirmative relief) and monetary penalties. Also, where a company has violated Title X of the Dodd-Frank Act or CFPB
regulations thereunder, the Dodd-Frank Act empowers state attorneys general and state regulators to bring civil actions to
remedy violations of state law.
Although the Dodd-Frank Act prohibits the CFPB from setting interest rates on consumer loans, efforts to create a federal usury
cap, applicable to all consumer credit transactions and substantially below rates at which the Company could continue to
operate profitably, are still ongoing. Any federal legislative or regulatory action that severely restricts or prohibits the provision
of small-loan consumer credit and similar services on terms substantially similar to those we currently provide would, if
enacted, have a material, adverse impact on our business, prospects, results of operations and financial condition. Any federal
law that would impose a national 36% or similar annualized credit rate cap on our services would, if enacted, almost certainly
eliminate our ability to continue our current operations. See Part I, Item 1A, “Risk Factors - Federal legislative or regulatory
proposals, initiatives, actions or changes that are adverse to our operations or result in adverse regulatory proceedings, or our
failure to comply with existing or future federal laws and regulations, could force us to modify, suspend, or cease part or all of
our nationwide operations,” for further information regarding the potential impact of adverse legislative and regulatory changes.
Mexico Exit. On August 3, 2018 the Company and its affiliates completed the sale of the Company's Mexico operating segment
in its entirety. The Company sold all of the issued and outstanding capital stock and equity interest of WAC de Mexico and
SWAC to the Purchasers, effective as of July 1, 2018, for a purchase price of approximately $44.36 million. The Company has
not and will not have any other involvement with the Mexico operating segment subsequent to the sale's effective date. The
Company and its subsidiaries no longer operate in Mexico.
Available Information. The Company maintains an Internet website, “www.LoansByWorld.com,” where interested persons will
be able to access free of charge, among other information, the Company’s annual reports on Form 10-K, its quarterly reports on
Form 10-Q, and its current reports on Form 8-K as well as amendments to these filings via a link to a third-party website. These
documents are available for access as soon as reasonably practicable after we electronically file these documents with the
SEC. The Company files these reports with the SEC via the SEC’s EDGAR filing system, and such reports also may be
accessed via the SEC’s EDGAR database at www.sec.gov. Information included on or linked to our website is not incorporated
by reference into this annual report.
15
Item 1A. Risk Factors
Forward-Looking Statements
This annual report 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, including, but not limited to those identified by the use of words
such as “anticipate,” “estimate,” “intend,” “plan,” “expect,” “believe,” “may,” “will,” “should,” “would,” “could,” and any
variations of the foregoing and similar expressions, are forward-looking statements. Although we believe that the expectations
reflected in any such forward-looking statements are reasonable, we 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, our actual financial results, performance or
financial condition may vary materially from those anticipated, estimated, expected or implied by any forward-looking
statements. Therefore, you should not rely on any of these forward-looking statements.
Investors should consider the risk factors described in this annual report, in addition to the other information presented in this
annual report and the other reports and registration statements the Company files with or furnishes to the SEC from time to
time, in evaluating us, our business, and an investment in our securities. Any of the risk factors described in this annual report,
as well as other risks, uncertainties, and possibly inaccurate assumptions underlying our plans and expectations, could result in
harm to our business, results of operations and financial condition and cause the value of our securities to decline, which in turn
could cause investors to lose all or part of their investment in our Company. These factors, among others, could also cause
actual results to differ materially from those we have experienced in the past or those we may express or imply from time to
time in any forward-looking statements we make. Investors are advised that it is impossible to identify or predict all risks, and
those risks not currently known to us or those we currently deem immaterial also could affect us in the future. The following
risks should not be construed as exclusive and should be read with the other cautionary statements that are in this Annual
Report on Form 10-K. The Company does not undertake any obligation to update forward-looking statements, except as may be
required by law, whether as a result of new information, future developments, or otherwise.
Media and public characterization of consumer installment loans as being predatory or abusive could have a materially
adverse effect on our business, prospects, results of operations and financial condition.
Consumer activist groups and various other media sources continue to advocate for governmental and regulatory action to
prohibit or severely restrict our products and services. These critics frequently characterize our products and services as
predatory or abusive toward consumers. If this negative characterization of the consumer installment loans we make and/or
ancillary services we provide becomes widely accepted by government policy makers or is embodied in legislative, regulatory,
policy or litigation developments that adversely affect our ability to continue offering our products and services or the
profitability of these products and services, our business, results of operations and financial condition would be materially and
adversely affected. Furthermore, our industry is highly regulated, and announcements regarding new or expected governmental
and regulatory action regarding consumer lending may adversely impact perceptions of our business even if such actions are
not targeted at our operations and do not directly impact us.
Employee misconduct or misconduct by third parties acting on our behalf could harm us by subjecting us to monetary loss,
significant legal liability, regulatory scrutiny, and reputational harm.
There is a risk that our employees or third-party contractors could engage in misconduct that adversely affects our business. For
example, if an employee or a third-party contractor were to engage in, or be accused of engaging in, illegal or suspicious
activities including fraud or theft, we could suffer direct losses from the activity. Additionally, we could be subject to regulatory
sanctions and suffer serious harm to our reputation, financial condition, customer relationships and ability to attract future
customers. Employee or third-party misconduct could prompt regulators to allege or to determine based upon such misconduct
that we have not established adequate supervisory systems and procedures to inform employees of applicable rules or to detect
violations of such rules. Our branches have experienced employee fraud from time to time, and it is not always possible to deter
employee or third-party misconduct. The precautions that we take to detect and prevent misconduct may not be effective in all
cases. Misconduct by our employees or third-party contractors, or even unsubstantiated allegations of misconduct, could result
in a material adverse effect on our reputation and our business.
Interest rate fluctuations may adversely affect our borrowing costs, profitability and liquidity.
Our profitability may be directly affected by the level of and fluctuations in interest rates, whether caused by changes in
economic conditions or other factors that affect our borrowing costs. Interest rates are highly sensitive to many factors that are
16
beyond our control, including general economic conditions and policies of various governmental and regulatory agencies and,
in particular, the Federal Reserve Board. Changes in monetary policy, including changes in interest rates, could influence the
amount of interest we pay on our revolving credit facility or any other floating interest rate obligations we may incur. Our
profitability and liquidity could be materially adversely affected during any period of higher interest rates. See Part II, Item 7A,
“Quantitative and Qualitative Disclosure About Market Risk” for additional information regarding our interest rate risk.
We are exposed to credit risk in our lending activities.
Our ability to collect on loans to individuals, our single largest asset group, depends on the ability and willingness of our
borrowers to repay such loans. Any material adverse change in the ability or willingness of a significant portion of our
borrowers to meet their obligations to us, whether due to changes in economic conditions, unemployment rates, the cost of
consumer goods (particularly, but not limited to, food and energy costs) and inflationary pressures, disposable income, interest
rates, health crises, natural disasters, acts of war or terrorism, political or social conditions, divorce, death, or other causes over
which we have no control, would have a material adverse impact on our earnings and financial condition. Although new
customers are required to submit a listing of personal property that will serve as collateral to secure their loans, the Company
does not rely on the value of such collateral in the loan approval process and generally does not perfect its security interest in
that collateral. Additionally, increases in the size of the loans we offer and average loan size could increase the chance a
borrower does not meet their obligations to us and could further increase our credit risk. Additional information regarding our
credit risk is included in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of
Operation-Credit Quality.”
Our insurance operations are subject to a number of risks and uncertainties, including claims, catastrophic events,
underwriting risks and dependence on a primary distribution channel.
Insurance claims and policyholder liabilities are difficult to predict and may exceed the related reserves set aside for claims
(losses) and associated expenses for claims adjudication (loss adjustment expenses). Additionally, events such as cyber security
attacks and breaches and other types of catastrophes, and prolonged economic downturns, could adversely affect our financial
condition and results of operations. Other risks relating to our insurance operations include changes to laws and regulations
applicable to us, as well as changes to the regulatory environment, such as: changes to laws or regulations affecting capital and
reserve requirements; frequency and type of regulatory monitoring and reporting; consumer privacy, use of customer data and
data security; benefits or loss ratio requirements; insurance producer licensing or appointment requirements; required
disclosures to consumers; and collateral protection insurance (i.e., insurance some of our lender companies purchase, at the
customer’s expense, on that customer’s loan collateral for the periods of time the customer fails to adequately, as required by
his loan, insure his collateral).
If our estimates of credit losses are not adequate to absorb actual losses, our provision for credit losses would increase,
which would adversely affect our results of operations.
To estimate the appropriate level of allowance for credit losses, we consider known and relevant internal and external factors
that affect loan collectability, including the total amount of loan receivables outstanding, historical loan receivable charge-offs,
our current collection patterns, and economic trends. Our methodology for establishing our allowance for credit losses is based
on the guidance in ASC 326, and, in part, on our historic loss experience. If customer behavior changes as a result of economic,
political, social, or other conditions, or if we are unable to predict how these conditions may affect our allowance for credit
losses, our allowance for credit losses may be inadequate. Our allowance for credit losses is an estimate, and if actual credit
losses are materially greater than our allowance for credit losses, our provision for credit losses would increase, which would
result in a decline in our future earnings, and thus our results of operations could be adversely affected. Neither state regulators
nor federal regulators regulate our allowance for credit losses. Additional information regarding our allowance for credit losses
is included in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Credit
Quality.”
In June of 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit
Losses on Financial Instruments (CECL). This ASU significantly changed the way that entities are required to measure credit
losses. This standard requires that the estimated credit loss be based upon an “expected credit loss” approach rather than the
“incurred loss” approach previously required. The new approach requires entities to measure all expected credit losses for
financial assets based on historical experience, current conditions, and reasonable forecasts of collectability. As such, the
expected credit loss model requires earlier recognition of credit losses than the incurred loss approach. CECL became effective
for the Company April 1, 2020. Our financial results may be negatively affected as weak or deteriorating economic conditions
are forecasted and alter our expectations for credit losses. In addition, due to the expansion of the time horizon over which we
are required to estimate future credit losses under CECL, we may experience increased volatility in our future provisions for
credit losses.
17
The concentration of our revenues in certain states could adversely affect us.
We currently operate consumer installment loan branches in sixteen states in the United States. Any adverse legislative or
regulatory change in any one of our states or an economic downturn or catastrophic event that disproportionately affects one or
more of our states, including in any of our larger states could have a material adverse effect on our business, prospects, and
results of operations or financial condition. See Part I, Item 1, “Description of Business” for information regarding the size of
our business in the various states in which we operate.
We may be unable to execute our business strategy due to economic conditions.
Uncertainty and deterioration in general economic conditions in the U.S. historically have created a difficult operating
environment for consumer lending. Many factors, including factors that are beyond our control, may impact our financial
position, liquidity, and results of operations and depend on management’s ability to execute our business strategy. These macro-
economic factors include general inflation, unemployment levels, housing markets, commodity prices, energy costs, volatile
interest rates, natural disasters, acts of war and terrorism. Additionally, many of our customers are primarily non-prime
borrowers, who have historically been more likely to be affected by adverse macro-economic factors than prime borrowers.
Currently, due to a number of factors including the ongoing conflict between Russia and Ukraine and supply chain problems
caused in part by the COVID-19 pandemic, the global economy is experiencing inflationary pressures not seen in a significant
period of time. We cannot predict the timing or the duration of any inflation or downturn in the economy and we are not
immune to the effects of general worldwide economic conditions.
Key factors involved in the execution of our business strategy include achieving our desired loan volume and pricing strategies,
the use of effective credit risk management techniques, marketing and servicing strategies, continued investment in technology
to support operating efficiency, and continued access to funding and liquidity sources. Although our pricing strategy is intended
to maximize the amount of economic profit we generate, within the confines of capital and infrastructure constraints, there can
be no assurance that this strategy will have its intended effect. Our failure or inability to execute any element of our business
strategy, due to economic conditions or otherwise, could materially adversely affect our financial position, liquidity, and results
of operations.
Our ability to execute our growth strategy is subject to significant risks, including some beyond our control, and may be
adversely affected.
Our growth strategy includes opening and acquiring branches in existing and new markets and is subject to significant risks,
some of which are beyond our control, including:
•
•
•
•
•
the prevailing laws and regulatory environment of each state in which we operate or seek to operate, and, to the extent
applicable, federal laws and regulations, which are subject to change at any time;
our ability to obtain and maintain any regulatory approvals, government permits, or licenses that may be required;
the degree of competition in new markets and its effect on our ability to attract new customers;
our ability to obtain adequate financing for our expansion plans; and
our ability to attract, train, and retain qualified personnel to staff our new operations.
We currently lack product and business diversification; as a result, our revenues and earnings may be disproportionately
negatively impacted by external factors and may be more susceptible to fluctuations than more diversified companies.
Our primary business activity is offering small consumer installment loans together with, in some states in which we operate,
related ancillary products. Thus, any developments, whether regulatory, economic or otherwise, that would hinder, reduce the
profitability of, or limit our ability to operate our small consumer installment loan business on the terms currently conducted
would have a direct and adverse impact on our business, profitability, and perhaps even our viability. Our current lack of
product and business diversification could inhibit our opportunities for growth, reduce our revenues and profits, and make us
more susceptible to earnings fluctuations than many other financial institutions whose operations are more diversified.
A reduction in demand for our products and a failure by us to adapt to such reduction could adversely affect our business
and results of operations.
The demand for the products we offer may be reduced due to a variety of factors, such as demographic patterns, changes in
customer preferences or financial condition, regulatory restrictions that decrease customer access to particular products, or the
availability of competing products, including through alternative or competing marketing channels. For example, we are highly
dependent upon selecting and maintaining attractive branch locations. These locations are subject to local market conditions,
including the employment available in the area, housing costs, traffic patterns, crime, and other demographic influences, any of
which may quickly change, thereby negatively impacting demand for our products in the area. Should we fail to adapt to
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significant changes in our customers’ demand for, or access to, our products, our revenues could decrease significantly and our
operations could be harmed. Even if we do make changes to existing products or introduce new products and channels to fulfill
customer demand, customers may resist or may reject such products. Moreover, the effect of any product change on the results
of our business may not be fully ascertainable until the change has been in effect for some time, and by that time it may be too
late to make further modifications to such product without causing further harm to our business, results of operations, and
financial condition.
We operate in a highly competitive market, and we cannot ensure that the competitive pressures we face will not have a
material adverse effect on our results of operations, financial condition and liquidity.
The consumer lending industry is highly competitive. We compete with other consumer finance companies as well as other
types of financial institutions that offer similar consumer financial products and services. Some of these competitors may have
greater financial, technical, and marketing resources than we possess. Some competitors may also have a lower cost of funds
and access to funding sources that may not be available to us. While banks and credit card companies have decreased their
lending to non-prime customers in recent years, there is no assurance that such lenders will not resume those lending activities.
Further, because of increased regulatory pressure on payday lenders, many of those lenders are starting to make more traditional
installment consumer loans in order to reduce regulatory scrutiny of their practices, which could increase competition in
markets in which we operate. We cannot be sure that the competitive pressures we face will not have a material adverse effect
on our results of operations, financial condition, and liquidity.
We depend on secure information technology, and an attack on or a breach of those systems or those of third-party vendors
could result in significant losses, unauthorized disclosure of confidential customer information, and reputational damage,
which could materially adversely affect our business, financial condition and/or results of operations, and could lead to
significant financial and legal exposure and reputational harm.
Our operations rely heavily on the secure collection, processing, storage, and transmission of personal, confidential, and other
information about us, our customers and third parties with which we do business. We process a significant number of customer
transactions on a continuous basis through our computer systems and networks and are subject to increasingly more risk related
to security systems as we enhance our mobile payment technologies and otherwise attempt to keep pace with rapid
technological changes in the financial services industry.
While we commit resources to the design, implementation, maintenance, and monitoring of our networks and systems, we may
be required to expend significant additional resources in the future to modify and enhance our security controls in response to
new or more sophisticated threats, new regulations related to cybersecurity and other developments. Additionally, there is no
guarantee that our security controls can provide absolute security.
Despite the measures we implement to protect our systems and data, we may not be able to anticipate, identify, prevent or
detect cyber-attacks, ransomware, computer viruses or other security breaches, particularly because the techniques used by
attackers change frequently and often are not immediately detected, and because cyber-attacks can originate from a wide variety
of sources, including third parties who are or may be involved in organized crime or linked to terrorist organizations or hostile
foreign governments. Such third parties may seek to gain unauthorized access to our systems directly, by fraudulently inducing
employees, customers, or other users of our systems, or by using equipment or security passwords belonging to employees,
customers, third-party service providers, or other users of our systems. Or, they may seek to disrupt or disable our services
through attacks such as denial-of-service attacks and ransomware attacks. In addition, we may be unable to identify, or may be
significantly delayed in identifying, cyber-attacks and incidents due to the increasing use of techniques and tools that are
designed to circumvent controls, to avoid detection, and to remove or obfuscate forensic artifacts. As a result, our computer
systems, software and networks, as well as those of third-party vendors we utilize, may be vulnerable to unauthorized access,
computer viruses, malicious attacks and other events that could have a security impact beyond our control. Our staff,
technologies, systems, networks, and those of third-parties we utilize also may become the target of cyber-attacks, unauthorized
access, malicious code, computer viruses, denial of service attacks, ransomware, and physical attacks that could result in
information security breaches, the unauthorized release, gathering, monitoring, misuse, loss or destruction of our or our
customers’ confidential, proprietary and other information, or otherwise disrupt our or our customers’ operations. We also
routinely transmit and receive personal, confidential and proprietary information through third parties, which may be vulnerable
to interception, misuse, or mishandling. Additionally, we may face new or heightened cybersecurity risk due to the COVID-19
pandemic and the resulting increase in our remote workforce and digital operations.
If one or more of such events occur, personal, confidential, and other information processed and stored in, and transmitted
through our computer systems and networks, or those of third-party vendors, could be compromised or could cause
interruptions or malfunctions in our operations that could result in significant losses, loss of confidence by and business from
customers, customer dissatisfaction, significant litigation, regulatory exposures, and harm to our reputation and brand.
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In the event personal, confidential, or other information is threatened, intercepted, misused, mishandled, or compromised, we
may be required to expend significant additional resources to modify our protective measures, to investigate the circumstances
surrounding the event, and implement mitigation and remediation measures. We also may be subject to fines, penalties,
litigation (including securities fraud class action lawsuits), regulatory investigation costs and settlements and financial losses
that are either not insured against or not fully covered through any insurance maintained by us. If one or more of such events
occur, our business, financial condition and/or results of operations could be significantly and adversely affected.
Any interruption of our information systems could adversely affect us.
Our business and reputation may be materially impacted by information system failures or network disruptions. We rely heavily
on communications and information systems to conduct our business. Each branch is part of an information network that is
designed to permit us to maintain adequate cash inventory, reconcile cash balances on a daily basis, and report revenues and
expenses to our headquarters. Any failure or interruption of these systems, including any failure of our back-up systems,
network outages, slow performance, breaches, unauthorized access, misuse, computer viruses, or other failures or disruptions
could result in disruption to our business or the loss or theft of confidential information, including customer information. A
disruption could impair our ability to offer and process our loans, provide customer service, perform collections or other
necessary business activities, which could result in a loss of customer confidence or business, subject us to additional regulatory
scrutiny or negative publicity, or expose us to civil litigation and possible financial liability, or otherwise materially adversely
affect our financial condition and operating results. Furthermore, we may not be able to detect immediately any such breach,
which may increase the losses that we would suffer. In addition, our existing insurance policies may not reimburse us for all of
the damages that we might incur as a result of a breach or other information system failure or network disruption.
We may not be able to make technological improvements as quickly as some of our competitors, which could harm our
ability to compete with our competitors and adversely affect our results of operations, financial condition, and liquidity.
The financial services industry is undergoing rapid technological changes, with frequent introductions of new technology-
driven products and services. The effective use of technology increases efficiency and enables financial and lending institutions
to better serve customers and reduce costs. Our future success and, in particular, the success of our centralized operations, will
depend, in part, upon our ability to address the needs of our customers by using technology to provide products and services
that will satisfy customer demands for convenience, as well as to create additional efficiencies in our operations. We may not be
able to effectively implement new technology-driven products and services as quickly as some of our competitors or be
successful in marketing these products and services to our existing and new customers. Failure to successfully keep pace with
technological change affecting the financial services industry could harm our ability to compete with our competitors and
adversely affect our results of operations, financial condition, and liquidity.
We are subject to data privacy laws, which may significantly increase our compliance and technology costs resulting in a
material adverse effect on our results of operations and financial condition.
We are subject to various federal and state privacy, data protection, and information security laws and regulations, including
requirements concerning security breach notification. Various federal and state regulatory agencies require us to notify
customers in the event of a security breach. Moreover, federal and state legislators are increasingly considering and
implementing new guidance, laws, and regulations. Compliance with current or future privacy, data protection and information
security laws affecting customer or employee data to which we are subject could result in higher compliance and technology
costs and could materially and adversely affect our profitability. Our failure to comply with privacy, data protection and
information security laws may require us to change our business practices or operational structure, and could subject us to
potentially significant regulatory and/or governmental investigations and/or actions, litigation, fines, sanctions, and damage to
our reputation.
We are also subject to the risk of theft or misuse of physical customer and employee records at our facilities.
Our branch offices and centralized headquarters have physical and electronic customer records necessary for day-to-day
operations that contain extensive confidential information about our customers. We also retain physical records in various
storage locations. The loss or theft of customer information and data from our branch offices, headquarters, or other storage
locations could subject us to additional regulatory scrutiny and penalties and could expose us to civil litigation and possible
financial liability, which could have a material adverse effect on our results of operations, financial condition and liquidity. In
addition, if we cannot locate original documents (or copies, in some cases) for certain finance receivables, we may not be able
to collect on those finance receivables.
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Our off-site data center and centralized IT functions are susceptible to disruption by catastrophic events, which could have a
material adverse effect on our business, results of operations, and financial condition.
Our information systems, and administrative and management processes could be disrupted if a catastrophic event, such as
severe weather, natural disaster, power outage, act of war or terror or similar event, destroyed or severely damaged our
infrastructure. Any such catastrophic event or other unexpected disruption of our headquarter's functions or off-site data center
could have a material adverse effect on our business, results of operations, and financial condition.
A small number of our shareholders have the ability to significantly influence matters requiring shareholder approval and
such shareholders may have interests which conflict with the interests of our other security holders.
As of March 31, 2022, based on filings made with the SEC and other information made available to us, Prescott General
Partners, LLC and its affiliates beneficially owned approximately 43.0% of our common stock. As a result, these shareholders
are able to significantly influence matters presented to shareholders, including the election and removal of directors, the
approval of significant corporate transactions, such as any reclassification, reorganization, merger, consolidation or sale of all or
substantially all of our assets, and the control of our management and affairs, including executive compensation arrangements.
Their interests may conflict with the interests of our other security holders.
Initiating and processing potential acquisitions may be unsuccessful or difficult, leading to losses and increased
delinquencies, which could have a material adverse effect on our results of operations.
We have previously acquired, and in the future may acquire, assets or businesses, including large portfolios of finance
receivables, either through the direct purchase of such assets or the purchase of the equity of a company with such a portfolio.
Since we will not have originated or serviced the loans we acquire, we may not be aware of legal or other deficiencies related to
origination or servicing, and our due diligence efforts of the acquisition prior to purchase may not uncover those deficiencies.
Further, we may have limited recourse against the seller of the portfolio.
In pursuing these transactions, we may experience, among other things:
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overvaluing potential targets;
difficulties in integrating any acquired companies or branches into our existing business, including integration of
account data into our information systems;
inability to realize the benefits we anticipate in a timely fashion, or at all;
unexpected losses due to the acquisition of loan portfolios with loans originated using less stringent underwriting
criteria;
significant costs, charges, or write-downs; or
unforeseen operating difficulties that require significant financial and managerial resources that would otherwise be
available for the ongoing development and expansion of our existing operations.
Risks Related to our Indebtedness
We depend to a substantial extent on borrowings under our revolving credit agreement to fund our liquidity needs.
Our revolving credit agreement allows us to borrow up to $685.0 million, with an accordion feature permitting the maximum
aggregate commitments to increase to $785.0 million provided that certain conditions are met, through June 7, 2024. Pursuant
to the terms of our revolving credit agreement, we are required to comply with a number of covenants and conditions, including
a minimum borrowing base calculation. If our existing sources of liquidity become insufficient to satisfy our financial needs or
our access to these sources becomes unexpectedly restricted, we may need to try to raise additional capital in the future. If such
an event were to occur, we can give no assurance that such alternate sources of liquidity would be available to us at all or on
favorable terms. Additional information regarding our liquidity risk is included in Part II, Item 7, “Management’s Discussion
and Analysis of Financial Condition and Results of Operations-Liquidity and Capital Resources.”
Our current debt and any additional debt we may incur in the future could negatively impact our business, prevent us from
satisfying our debt obligations and adversely affect our financial condition.
We may incur a substantial amount of debt in the future. As of March 31, 2022, we had approximately $697.0 million of total
debt outstanding and a total debt-to-equity ratio of approximately 1.9 to 1. The amount of debt we may incur in the future could
have important consequences, including the following:
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our ability to obtain additional financing for working capital, debt refinancing, share repurchases or other purposes
could be impaired;
a substantial portion of our cash flows from operations will be dedicated to paying principal and interest on our debt,
reducing funds available for other purposes;
• we may be vulnerable to interest rate increases, as borrowings under our revolving credit agreement bear interest at
variable rates, as may any future debt that we incur;
• we may be at a competitive disadvantage to competitors that are not as highly leveraged;
• we could be more vulnerable to adverse developments in our industry or in general economic conditions;
• we may be restricted from taking advantage of business opportunities or making strategic acquisitions;
• we may be limited in our flexibility in planning for, or reacting to, changes in our business and the industry in which
we operate;
• we may have difficulty satisfying our obligations under the debt if accelerated upon the occurrence of an event of
default; and
• we may be more vulnerable to periods of negative or slow growth in the general economy or in our business.
In addition, meeting our anticipated liquidity requirements is contingent upon our continued compliance with our revolving
credit agreement. An acceleration of our debt would have a material adverse effect on our liquidity and our ability to continue
as a going concern. If our debt obligations increase, whether due to the increased cost of existing indebtedness or the incurrence
of additional indebtedness, the consequences described above could be magnified.
Although the terms of our revolving credit agreement contain restrictions on our ability to incur additional debt, as well as any
future debt that we incur, these restrictions are subject, or likely to be subject, in the case of any future debt, to exceptions that
could permit us to incur a substantial amount of additional debt. In addition, our existing and future debt agreements will not
prevent us from incurring certain liabilities that do not constitute indebtedness as defined for purposes of those debt agreements.
If new debt or other liabilities are added to our current debt levels, the risks associated with our having substantial debt could
intensify. As of March 31, 2022, we had $287.7 million available for borrowing under our revolving credit agreement, subject
to borrowing base limitations and other specified terms and conditions.
We may not be able to generate sufficient cash flows to service our outstanding debt and fund operations and may be forced
to take other actions to satisfy our obligations under such debt.
Our ability to make scheduled payments on the principal of, to pay interest on, or to refinance our indebtedness will depend in
part on our cash flows from operations, which are subject to regulatory, economic, financial, competitive, and other factors
beyond our control. We may not generate a level of cash flows from operations sufficient to permit us to meet our debt service
obligations. If we are unable to generate sufficient cash flows from operations to service our debt, we may be required to sell
assets, refinance all or a portion of our existing debt, obtain additional financing, or obtain additional equity capital on terms
that may be onerous or highly dilutive. There can be no assurance that any refinancing will be possible or that any asset sales or
additional financing can be completed on acceptable terms or at all.
The terms of our debt limit how we conduct our business.
Our revolving credit agreement contains covenants that restrict our ability to, among other things:
incur and guarantee debt;
pay dividends or make other distributions on or redeem or repurchase our stock;
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• make investments or acquisitions;
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• merge with or into other companies;
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• make capital expenditures.
create liens on our assets;
sell assets;
enter into transactions with shareholders and other affiliates; and
Our revolving credit agreement also imposes requirements that we maintain specified financial measures not in excess of, or not
below, specified levels. In particular, our revolving credit agreement requires, among other things, that we maintain (i) at all
times a specified minimum consolidated net worth, (ii) as of the end of each fiscal quarter, a minimum ratio of consolidated net
income available for fixed charges for the period of four consecutive fiscal quarters most recently ended to consolidated fixed
charges for that period of not less than a specified minimum, (iii) at all times a specified maximum ratio of total debt on a
consolidated basis to consolidated adjusted net worth and (iv) at all times a specified maximum collateral performance
indicator. These covenants limit the manner in which we can conduct our business and could prevent us from engaging in
favorable business activities or financing future operations and capital needs and impair our ability to successfully execute our
strategy and operate our business.
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A breach of any of the covenants in our revolving credit agreement would result in an event of default thereunder. Any event of
default would permit the creditors to accelerate the related debt, which could also result in the acceleration of any other or
future debt containing a cross-acceleration or cross-default provision. In addition, an event of default under our revolving credit
agreement would permit the lenders thereunder to terminate all commitments to extend further credit under the revolving credit
agreement. Furthermore, if we were unable to repay the amounts due and payable under the revolving credit agreement or any
other secured debt we may incur, the lenders thereunder could cause the collateral agent to proceed against the collateral
securing that debt. In the event our creditors accelerate the repayment of our debt, there can be no assurance that we would have
sufficient assets to repay that debt, and our financial condition, liquidity and results of operations would suffer. Additional
information regarding our revolving credit facility is included in Part II, Item 7 “Management’s Discussion and Analysis of
Financial Condition and Results of Operations-Liquidity and Capital Resources.”
The conditions of the U.S. and international capital markets may adversely affect lenders with which we have relationships,
causing us to incur additional costs and reducing our sources of liquidity, which may adversely affect our financial position,
liquidity and results of operations.
Turbulence in the global capital markets can result in disruptions in the financial sector and affect lenders with which we have
relationships, including members of the syndicate of banks that are lenders under our revolving credit agreement. Disruptions in
the financial sector may increase our exposure to credit risk and adversely affect the ability of lenders to perform under the
terms of their lending arrangements with us. Failure by our lenders to perform under the terms of our lending arrangements
could cause us to incur additional costs that may adversely affect our liquidity, financial condition, and results of operations.
There can be no assurance that future disruptions in the financial sector will not occur that could have adverse effects on our
business. Additional information regarding our liquidity and related risks is included in Part II, Item 7, “Management’s
Discussion and Analysis of Financial Condition and Results of Operations-Liquidity and Capital Resources.”
Risks Related to Legal Proceedings and Regulation
Federal legislative or regulatory proposals, initiatives, actions, or changes that are adverse to our operations or result in
adverse regulatory proceedings, or our failure to comply with existing or future federal laws and regulations, could force us
to modify, suspend, or cease part or all of our nationwide operations.
We are subject to numerous federal laws and regulations that affect our lending operations. Although these laws and regulations
have remained substantially unchanged for many years, the laws and regulations directly affecting our lending activities have
been under review and subject to change in recent years as a result of various developments and changes in economic
conditions, the make-up of the executive and legislative branches of government, and the political and media focus on issues of
consumer and borrower protection. Any changes in such laws and regulations could force us to modify, suspend, or cease part
or, in the worst case, all of our existing operations. It is also possible that the scope of federal regulations could change or
expand in such a way as to preempt what has traditionally been state law regulation of our business activities.
In July 2010 the Dodd-Frank Act was enacted. The Dodd-Frank Act restructured and enhanced the regulation and supervision
of the financial services industry and created the CFPB, an agency with sweeping regulatory and enforcement authority over
consumer financial transactions. The CFPB’s rulemaking and enforcement authority extends to certain non-depository
institutions, including us. The CFPB is specifically authorized, among other things, to take actions to prevent companies
providing consumer financial products or services and their service providers from engaging in unfair, deceptive or abusive acts
or practices in connection with consumer financial products and services, and to issue rules requiring enhanced disclosures for
consumer financial products or services. The CFPB also has authority to interpret, enforce, and issue regulations implementing
enumerated consumer laws, including certain laws that apply to our business. Further, the CFPB has authority to designate non-
depository “larger participants” in certain markets for consumer financial services and products for purposes of the CFPB’s
supervisory authority under the Dodd-Frank Act. Such designated “larger participants” are subject to reporting and on-site
compliance examinations by the CFPB, which may result in increased compliance costs and potentially greater enforcement
risks based on these supervisory activities. Although the CFPB has not yet developed a “larger participant” rule that directly
covers the Company’s installment lending business, the Company believes that the implementation of any such rules would
likely bring the Company’s business under the CFPB’s direct supervisory authority. In addition, even in the absence of a “larger
participant” rule, the CFPB has the power to order individual nonbank financial institutions to submit to supervision where the
CFPB has reasonable cause to determine that the institution is engaged in “conduct that poses risks to consumers” under 12
USC 5514(a)(1)(C).
Although the Dodd-Frank Act prohibits the CFPB from setting interest rates on consumer loans, efforts to create a federal usury
cap, applicable to all consumer credit transactions and substantially below rates at which the Company could continue to
operate profitably, are still ongoing. Any federal legislative or regulatory action that severely restricts or prohibits the provision
of small-loan consumer credit and similar services on terms substantially similar to those we currently provide would, if
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enacted, have a material adverse impact on our business, prospects, results of operations, and financial condition. Any federal
law that would impose a maximum annualized credit rate cap in the range of 36% on our products would, if enacted, almost
certainly eliminate our ability to continue our current operations. Given the uncertainty associated with the manner in which
various expected provisions of the Dodd-Frank Act have been and are expected to continue to be implemented by the various
regulatory agencies and through regulations, the full extent of the impact such requirements will have on our operations remains
unclear; however, these regulations have increased and are expected to further increase our cost of doing business and time
spent by management on regulatory matters, which may have a material adverse effect on the Company’s operations and
results.
In 2017, the CFPB issued a final rule (the "Rule") under its unfair, deceptive and abusive acts and practices rulemaking
authority relating to payday, vehicle title, and similar loans. The final rule originally required lenders originating short-term
loans and longer-term balloon payment loans to first make a good-faith reasonable determination that the consumer has the
ability to repay the covered loan along with current obligations and expenses (“ability to repay requirements”), however the
ability to repay requirements was rescinded in July 2020. The final 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”). Although the Company does not make loans with terms of
45 days or less or obtain access to a customer’s bank account or paycheck for repayment of any of its loans, it does make some
vehicle-secured loans with an annual percentage rate within the scope of the final rule. The final rule has significant differences
from the CFPB’s proposed rules announced on June 2, 2016. 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. Additionally, any further regulatory changes could have effects beyond those
currently contemplated that could further materially and adversely impact our business and operations.
In addition to the specific matters described above, other aspects of our business may be the subject of future CFPB rule-
making. The enactment of one or more of such regulatory changes, or the exercise of broad regulatory authority by regulators,
including but not limited to, the CFPB, having jurisdiction over the Company’s business or discretionary consumer financial
transactions generically, could materially and adversely affect our business, results of operations and prospects. See Part I, Item
1, “Business-Government Regulation” for more information regarding legislation we are subject to and related risks.
Litigation and regulatory actions, including challenges to the arbitration clauses in our customer agreements, could subject
us to significant class actions, fines, penalties, judgments and requirements resulting in increased expenses and potential
material adverse effects on our business, results of operations and financial condition.
In the normal course of business, from time to time, we have been involved in various legal actions, including arbitration, class
actions and other litigation, arising in connection with our business activities. All such legal proceedings are inherently
unpredictable and, regardless or the merits of the claims, litigation is often expensive, time consuming, disruptive to our
operations and resources, and distracting to management. If resolved against us, such legal proceedings could result in
excessive verdicts and judgments, injunctive relief, equitable relief, and other adverse consequences that may affect our
financial condition and how we operate our business. Similarly, if we settle such legal proceedings, it may affect our financial
condition and how we operate our business. Future court decisions, alternative dispute resolution awards, business expansion or
legislative activity may increase our exposure to litigation and regulatory investigations. In some cases, substantial non-
economic remedies or punitive damages may be sought.
Although we maintain liability insurance coverage, there can be no assurance that such coverage will cover any particular
verdict, judgment, or settlement that may be entered against us, that such coverage will prove to be adequate, or that such
coverage will continue to remain available on acceptable terms, if at all. If in any legal proceeding we incur liability or defense
costs that exceed our insurance coverage or that are not within the scope of our insurance coverage, it could have a material
adverse effect on our business, financial condition, and results of operations.
Certain legal actions include claims for substantial compensatory and punitive damages, or claims for indeterminate amounts of
damages. While the arbitration provisions in our customer agreements historically have limited our exposure to consumer class
action litigation, there can be no assurance that we will be successful in enforcing our arbitration clause in the future. There
may also be legislative, administrative or regulatory efforts to directly or indirectly prohibit the use of pre-dispute arbitration
clauses, or we may be compelled as a result of competitive pressure or reputational concerns to voluntarily eliminate pre-
dispute arbitration clauses.
Additionally, if we are subject to regulatory actions or other litigation, we may not be able to maintain all requisite licenses and
permits or obtain additional licenses and permits necessary for future business operations, and the failure to satisfy those or
other regulatory requirements could have a material adverse effect on our business, financial condition, and results of
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operations. Material changes in laws or regulations applicable to us could also subject us to additional licensing, registration
and other regulatory requirements in the future or could adversely affect our business, financial condition, and results of
operations.
Unfavorable state legislation, executive orders, or regulatory actions, adverse outcomes in litigation or regulatory
proceedings or failure to comply with existing laws and regulations could force us to cease, suspend or modify our
operations in a state, potentially resulting in a material adverse effect on our business, results of operations and financial
condition.
In addition to federal laws and regulations, we are subject to numerous state laws and regulations that affect our lending
activities. Many of these regulations impose detailed and complex constraints on the terms of our loans, lending forms and
operations. Failure to comply with applicable laws and regulations could subject us to regulatory enforcement action that could
result in the assessment against us of civil, monetary, or other penalties, including the suspension or revocation of our licenses
to lend in one or more jurisdictions.
As discussed elsewhere in this report, the Company’s operations are subject to extensive state and federal laws and regulations,
and changes in those laws or regulations or their application could have a material adverse effect on the Company’s business,
results of operations, prospects or ability to continue operations in the jurisdictions affected by these changes. See Part I, Item
1, “Business-Government Regulation” and “Federal Legislation,” for more information regarding this legislation and related
risks.
Passage of adverse legislation, such as rate caps on financial lending products or similar initiatives, in any of the states in which
we operate could have a material adverse effect on the Company’s business, results of operations, prospects, or ability to
continue operations in the jurisdictions affected by such changes. We can give no assurance that the laws and regulations that
govern our business, or the interpretation or administration of those laws and regulations, will remain unchanged or that any
such future changes will not materially and adversely affect or in the worst case, eliminate the Company’s lending practices,
operations, profitability, or prospects.
In addition, any adverse change in existing laws or regulations, or any adverse interpretation or litigation relating to existing
laws and regulations in any state in which we operate, could subject us to liability for prior operating activities or could lower
or eliminate the profitability of our operations going forward by, among other things, reducing the amount of interest and fees
we can charge in connection with our loans. If these or other factors lead us to close our branches in a state, then in addition to
the loss of net revenues attributable to that closing, we would also incur closing costs such as lease cancellation payments and
we would have to write off assets that we could no longer use. If we were to suspend rather than permanently cease our
operations in a state, we may also have continuing costs associated with maintaining our branches and our employees in that
state, with little or no revenues to offset those costs.
Changes in local laws and regulations or interpretations of local laws and regulations could negatively impact our business,
results of operations, and financial condition.
In addition to state and federal laws and regulations, our business is subject to various local laws and regulations, such as local
zoning regulations. Local zoning boards and other local governing bodies have been increasingly restricting the permitted
locations of consumer finance companies. Any future actions taken to require special use permits for or impose other
restrictions on our ability to provide products could adversely affect our ability to expand our operations or force us to attempt
to relocate existing branches. If we were forced to relocate any of our branches, in addition to the costs associated with the
relocation, we may be required to hire new employees in the new areas, which may adversely impact the operations of those
branches. Relocation of an existing branch may also hinder our collection abilities, as our business model relies in part on the
locations of our branches being close to where our customers live in order to successfully collect on outstanding loans.
We may be exposed to liabilities under the FCPA, and any determination that the Company or any of its subsidiaries has
violated the FCPA could have a material adverse effect on our business and liquidity.
We are subject to the FCPA and various other anti-corruption and anti-bribery laws. We face significant risks and liability if we
fail to comply with these laws, which generally prohibit companies and their employees and third-party intermediaries from
authorizing, offering, or providing, directly or indirectly, improper payments or benefits to foreign government officials,
political parties or candidates, employees of public international organizations, or private-sector recipients for the corrupt
purpose of obtaining or retaining business, directing business to any person, or securing any advantage. On August 6, 2020, the
Company announced that it has reached resolution with both the SEC and the DOJ with respect to the FCPA matter in Mexico.
See Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Regulatory
Matters,” for more information.
25
The Company could be subject to fines, civil and criminal penalties, equitable remedies, including profit disgorgement and
related interest, and injunctive relief for any future violations of the FCPA. In addition, any disposition of these matters could
adversely impact the Company’s access to debt financing and capital funding and result in further modifications to our business
practices and compliance programs. Any disposition of any future violations could also potentially require that a monitor be
appointed to review future business practices with the goal of ensuring compliance with the FCPA and other applicable laws.
The Company is currently facing a shareholder derivative complaint that was filed on behalf of the Company against certain of
its current and former directors in relation to WAC de Mexico, which the Company is contesting, and could also face additional
third-party claims by shareholders and/or other stakeholders of the Company. In addition, disclosure of the investigation or its
ultimate disposition 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.
Detecting, investigating, and resolving these matters is expensive and consumes significant time and attention of the
Company’s senior management. We may incur substantial expenses responding to such actions. Any future FCPA violation, or
a settlement thereof, may give rise to an event of default under the agreement governing our revolving credit facility, which
could have a material adverse effect on our liquidity. See Part I, Item 1A, “Risk Factors - We depend to a substantial extent on
borrowings under our revolving credit agreement to fund our liquidity needs” and “Risk Factors -The terms of our debt limit
how we conduct our business.”
Our use of third-party vendors is subject to regulatory review.
The CFPB and other regulators have issued regulatory guidance focusing on the need for financial institutions to perform due
diligence and ongoing monitoring of third-party vendor relationships, which increases the scope of management involvement
and decreases the benefit that we receive from using third-party vendors. Moreover, if our regulators conclude that we have not
met the standards for oversight of our third-party vendors, we could be subject to enforcement actions, civil monetary penalties,
supervisory orders to cease and desist or other remedial actions, which could have a materially adverse effect on our business,
reputation, financial condition and operating results. Further, federal and state regulators have been scrutinizing the practices of
lead aggregators and providers recently. If regulators place restrictions on certain practices by lead aggregators or providers, our
ability to use them as a source for applicants could be affected.
General Risk Factors
Our risk management efforts may not be effective.
We could incur substantial losses and our business operations could be disrupted if we are unable to effectively identify,
manage, monitor, and mitigate financial risks, such as credit risk, interest rate risk, prepayment risk, liquidity risk, and other
market-related risks, as well as regulatory and operational risks related to our business, assets, and liabilities. Our risk
management policies, procedures, and techniques may not be sufficient to identify all of the risks we are exposed to, mitigate
the risks we have identified, or identify additional risks to which we may become subject in the future. We also face evolving
risks resulting from the ongoing COVID-19 pandemic.
We may experience significant turnover in our senior management, and our business may be adversely affected by the
transitions in our senior management team.
Executive leadership transitions can be inherently difficult to manage and may cause disruption to our business. In addition,
management transition inherently causes some loss of institutional knowledge, which can negatively affect strategy and
execution, and our results of operations and financial condition could be negatively impacted as a result. The loss of services of
one or more other members of senior management, or the inability to attract qualified permanent replacements, could have a
material adverse effect on our business. If we fail to successfully attract and appoint permanent replacements with the
appropriate expertise, we could experience increased employee turnover and harm to our business, results of operations, cash
flow and financial condition. The search for permanent replacements could also result in significant recruiting and relocation
costs.
The departure, transition, or replacement of key personnel could significantly impact the results of our operations. If we
cannot continue to hire and retain high-quality employees, our business and financial results may be negatively affected.
Our future success significantly depends on the continued service and performance of our key management personnel.
Competition for these employees is intense. Our operating results could be adversely affected by higher employee turnover or
increased salary and benefit costs. Like most businesses, our employees are important to our success and we are dependent in
part on our ability to retain the services of our key management, operational, compliance, finance, and administrative personnel.
We have built our business on a set of core values, and we attempt to hire employees who are committed to these values. We
want to hire and retain employees who will fit our culture of compliance and of providing exceptional service to our customers.
26
In order to compete and to continue to grow, we must attract, retain, and motivate employees, including those in executive,
senior management, and operational positions. As our employees gain experience and develop their knowledge and skills, they
become highly desired by other businesses. Therefore, to retain our employees, we must provide a satisfying work environment
and competitive compensation and benefits. If costs to retain our skilled employees increase, then our business and financial
results may be negatively affected.
Changes in federal, state and local tax law, interpretations of existing tax law, or adverse determinations by tax authorities,
could increase our tax burden or otherwise adversely affect our financial condition or results of operations.
We are subject to taxation at the federal, state and local levels. Furthermore, we are subject to regular review and audit by tax
authorities. While we believe our tax positions will be sustained, the final outcome of tax audits and related litigation may differ
materially from the tax amounts recorded in our Consolidated Financial Statements, which could adversely impact our cash
flows and financial results.
Damage to our reputation could negatively impact our business.
Maintaining a strong reputation is critical to our ability to attract and retain customers, investors, and employees. Harm to our
reputation can arise from many sources, including employee misconduct, misconduct by third-party service providers or other
vendors, litigation or regulatory actions, failure by us to meet minimum standards of service and quality, inadequate protection
of customer information, and compliance failures. Negative publicity regarding our Company (or others engaged in a similar
business or similar activities), whether or not accurate, may damage our reputation, which could have a material adverse effect
on our business, results of operations, and financial condition.
We have goodwill, which is subject to periodic review and testing for impairment.
At March 31, 2022 our total assets contained $7.4 million of goodwill. Under GAAP, goodwill is subject to periodic review and
testing to determine if it is impaired. Unfavorable trends in our industry and unfavorable events or disruptions to our operations
resulting from adverse legislative or regulatory actions or from other unpredictable causes could result in goodwill impairment
charges.
If we fail to maintain appropriate controls and procedures, we may not be able to accurately report our financial results,
which could have a material adverse effect on our operations, financial condition, and the trading price of our common
stock.
We are required to maintain disclosure controls and procedures and internal control over financial reporting. Section 404(a) of
the Sarbanes Oxley Act requires us to include in our annual reports on Form 10-K an assessment by management of the
effectiveness of our internal control over financial reporting. Section 404(b) of the Sarbanes Oxley Act requires us to engage
our independent registered public accounting firm to attest to the effectiveness of our internal control over financial reporting.
We expect to incur significant expenses and to devote resources to Section 404 compliance on an ongoing basis. It is difficult
for us to predict how long it will take or costly it will be to complete the assessment of the effectiveness of our internal control
over financial reporting for each year and to remediate any deficiencies in our internal control over financial reporting.
If we identify a material weakness in our controls and procedures, our ability to record, process, summarize, and report
financial information accurately and within the time periods specified in the rules and forms of the SEC could be adversely
affected. In addition, remediation of a material weakness would require our management to devote significant time and incur
significant expense. A material weakness is a deficiency, or a combination of deficiencies, such that there is a reasonable
possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a
timely basis. If we are unable to maintain effective controls and procedures we could lose investor confidence in the accuracy
and completeness of our financial reports, and we may be subject to investigation or sanctions by the SEC. Any such
consequence or other negative effect could adversely affect our operations, financial condition, and the trading price of our
common stock.
Regular turnover among our managers and other employees at our branches makes it more difficult for us to operate our
branches and increases our costs of operations, which could have an adverse effect on our business, results of operations
and financial condition.
The annual turnover as of March 31, 2022 among our branch employees was approximately 44.4%. This turnover increases our
cost of operations and makes it more difficult to operate our branches. If we are unable to keep our employee turnover rates
consistent with historical levels or if unanticipated problems arise from our high employee turnover, our business, results of
operations, and financial condition could be adversely affected.
27
Absence of dividends could reduce our attractiveness to investors.
Since 1989, we have not declared or paid cash dividends on our common stock and may not pay cash dividends in the
foreseeable future. As a result, our common stock may be less attractive to certain investors than the stock of dividend-paying
companies. Investors may need to rely on sales of their common stock after price appreciation, which may not occur, as the
only way to realize future gains on their investment.
Various provisions of our charter documents and applicable laws could delay or prevent a change of control that
shareholders may favor.
Provisions of our articles of incorporation, South Carolina law, and the laws in several of the states in which our operating
subsidiaries are incorporated could delay or prevent a change of control that the holders of our common stock may favor or may
impede the ability of our shareholders to change our management. In particular, our articles of incorporation and South Carolina
law, among other things, authorize our board of directors to issue preferred stock in one or more series, without shareholder
approval, and will require the affirmative vote of holders of two-thirds of our outstanding shares of voting stock, to approve our
merger or consolidation with another corporation. Additional information regarding the similar effect of laws in certain states in
which we operate is described in Part 1, Item 1, “Description of Business - Government Regulation.”
Overall stock market volatility may materially and adversely affect the market price of our common stock.
The Company’s common stock price has been and is likely to continue to be subject to significant volatility. Securities markets
worldwide experience significant price and volume fluctuations. This market volatility, as well as general economic, market, or
political conditions, could reduce the market price of shares of our common stock in spite of our operating performance.
Additionally, a variety of factors could cause the price of the common stock to fluctuate, perhaps substantially, including:
general market fluctuations resulting from factors not directly related to the Company’s operations or the inherent value of its
common stock; state or federal legislative or regulatory proposals, initiatives, actions or changes that are, or are perceived to be,
adverse to our operations or the broader consumer finance industry in general; announcements of developments related to our
business; fluctuations in our operating results and the provision for loan losses; low trading volume in our common stock;
decreased availability of our common stock resulting from stock repurchases and concentrations of ownership by large or
institutional investors; general conditions in the financial service industry, the domestic or global economy, including
inflationary pressures, or the domestic or global credit or capital markets; changes in financial estimates by securities analysts;
our failure to meet the expectations of securities analysts or investors; negative commentary regarding our Company and
corresponding short-selling market behavior; adverse developments in our relationships with our customers; investigations or
legal proceedings brought against the Company or its officers; or significant changes in our senior management team.
Changes to accounting rules, regulations or interpretations could significantly affect our financial results.
New accounting rules or regulations, changes to existing accounting rules or regulations, and changing interpretations of
existing rules and regulations have been issued or occurred and may continue to be issued or occur in the future. Our
methodology for valuing our receivables and otherwise accounting for our business is subject to change depending upon the
changes in, and interpretation of, accounting rules, regulations, or interpretations. Any such changes to accounting rules,
regulations, or interpretations could negatively affect our reported results of operations and could negatively affect our financial
condition through increased cost of compliance.
In addition, the FASB is currently reviewing or proposing changes to several financial accounting and reporting standards that
govern key aspects of our financial statements, including areas where assumptions or estimates are required. As a result of
changes to financial accounting or reporting standards, whether promulgated or required by the FASB or other regulators, we
could be required to change certain assumptions or estimates we previously used in preparing our financial statements, which
could negatively impact how we record and report our results of operations and financial condition.
If assumptions or estimates we use in preparing our financial statements are incorrect or are required to change, our
reported results of operations and financial condition may be adversely affected.
We are required to use certain assumptions and estimates in preparing our financial statements under GAAP, including
determining allowances for credit losses, the fair value of financial instruments, asset impairment, reserves related to litigation
and other legal matters, the fair value of share-based compensation, valuation of income, and other taxes and regulatory
exposures. In addition, significant assumptions and estimates are involved in determining certain disclosures required under
GAAP, including those involving the fair value of our financial instruments. If the assumptions or estimates underlying our
financial statements are incorrect, the actual amounts realized on transactions and balances subject to those estimates will be
different, and this could have a material adverse effect on our results of operations and financial condition.
28
In addition, the FASB is currently reviewing or proposing changes to several financial accounting and reporting standards that
govern key aspects of our financial statements, including areas where assumptions or estimates are required. As a result of
changes to financial accounting or reporting standards, whether promulgated or required by the FASB or other regulators, we
could be required to change certain assumptions or estimates we previously used in preparing our financial statements, which
could negatively impact how we record and report our results of operations and financial condition.
The future issuance of additional shares of our common stock in connection with potential acquisitions or otherwise will
dilute all other shareholders.
Except in certain circumstances, we are not restricted from issuing additional shares of common stock, including any securities
that are convertible into or exchangeable for, or that represent the right to receive, common stock. The market price of shares of
our common stock could decline as a result of sales of a large number of shares of common stock in the market or the
perception that such sales could occur. We intend to continue to evaluate acquisition opportunities and may issue shares of
common stock in connection with these acquisitions. Any shares of common stock issued in connection with acquisitions, the
exercise of outstanding stock options, or otherwise would dilute the percentage ownership held by our existing shareholders.
The coronavirus (COVID-19) pandemic has adversely affected and is expected to continue adversely affecting our business,
liquidity, results of operations and financial position.
The COVID-19 pandemic has resulted in widespread volatility and deterioration in household, business, economic, and market
conditions. The ultimate extent of the impact of the COVID-19 global pandemic on our capital, liquidity, and other financial
positions and on our business, results of operations, and prospects will depend on a number of evolving factors, including the
duration of the pandemic and emergence of new variants or additional waves of cases, the government's response including
public health directives and/or economic and fiscal stimulus measures, the effect on customers and their spending and saving
abilities and the effect on markets and economies such as volatile interest rates, inflation and higher insurance costs. The
COVID-19 pandemic could also have an adverse impact on our labor force if key personnel or a significant number of
employees become unavailable due to the effects and restrictions of the pandemic or if we experience labor shortages or other
difficulties hiring and retaining labor. Additionally, we rely on service providers to help us conduct aspects of our business and
if any of these providers are unable to continue to provide us with their services, due to the COVID-19 pandemic or otherwise,
it could negatively impact our ability to serve our customers.
Given the unprecedented nature of the COVID-19 pandemic, our financial and economic models may be unable to accurately
predict and respond to the impact of the economic contraction or lasting changes to customer behaviors, which in turn may limit
our ability to manage credit risk and avoid higher charge-off rates. Additionally, our credit and economic models may not be
able to adequately predict or forecast credit losses, loan receivables or other financial metrics during and after the crisis, which
could result in our reserves being too large or insufficient. We do not yet know the full extent of the impacts on our business,
our operations or the global economy as a whole and there may be consequences that we do not anticipate at this time or that
develop in unexpected ways. Additionally, many of the other risk factors described herein are heightened by the effects of the
COVID-19 pandemic and related economic conditions, which in turn could materially adversely affect our business, financial
condition, results of operations, access to financing and liquidity.
The extent to which the pandemic will ultimately impact our business and financial condition will depend on future events that
are impossible to predict, including, but not limited to, the duration and severity of the pandemic, the success of actions taken to
contain, treat, and prevent the spread of the virus, the effectiveness of our borrower assistance initiatives and government
economic stimulus measures, and the speed at which normal economic and operating conditions return.
Item 1B. Unresolved Staff Comments
None.
Item 2.
Properties
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. The Company leases approximately
45,000 square feet at this location. This lease expires on January 31, 2030 and includes two five-year options. The Company’s
previous corporate headquarters, which consisted of approximately 42,000 square feet in Greenville, South Carolina, was
classified as held for sale as of March 31, 2020. During the second quarter of fiscal 2021 the Company completed the sale of
two of the three buildings. The remaining third building was sold during the second quarter of fiscal 2022.
29
The Company owns all of the furniture, fixtures and computer terminals located in each of its branches. As of March 31, 2022,
the Company had 1,167 branches, most of which are leased and are classified as operating leases. During the fiscal year ended
March 31, 2022, operating lease cost for office space was approximately $27.1 million, or an average of approximately $22.6
thousand per branch. The Company's leases generally provide for an initial three- to five-year term with renewal options. The
Company's branches are typically located in shopping centers, malls and the first floors of downtown buildings. Branches have
an average size of 1,600 square feet.
Item 3.
Legal Proceedings
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 previously disclosed, and
summarized below under Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of
Operations - Regulatory Matters,” 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.
For these reasons, we are currently unable to predict the ultimate timing or outcome of, or reasonably estimate the possible
losses or a range of possible losses resulting from, currently pending claims. Based on information currently available, the
Company does not believe that any reasonably probable losses arising from currently pending legal matters will be material to
the Company’s results of operations or financial conditions. However, in light of the inherent uncertainties involved in such
matters, 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.
Item 4.
Mine Safety Disclosures
None.
PART II.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
Market Information
Since November 26, 1991, the Company’s common stock has traded on NASDAQ and is currently listed on the NASDAQ
Global Select Market (“NASDAQ”) under the symbol WRLD.
Holders
As of May 19, 2022, there were 24 holders of record of our common stock and a significant number of persons or entities who
hold their stock in nominee or “street” names through various brokerage firms.
30
Dividends
Since April 1989, the Company has not declared or paid any cash dividends on its common stock. Its policy has been to retain
earnings for use in its business and selectively use cash to repurchase its common stock on the open market. In addition, the
Company’s credit agreements contain certain restrictions on the payment of cash dividends on its capital stock. See Part II, Item
7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Liquidity and Capital Resources.”
In the future, the Company’s Board of Directors may determine whether to pay cash dividends based on conditions then
existing, including the Company’s earnings, financial condition, capital requirements and other relevant factors.
Issuer Purchases of Equity Securities
On February 24, 2022, 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 remained available for repurchase under prior repurchase
authorizations. As of March 31, 2022, the Company had $15.4 million in aggregate remaining repurchase capacity under its
current share repurchase program. The timing and actual number of shares 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 repurchase program may be
suspended or discontinued at any time.
The repurchase authorization does not have a stated expiration date. The following table details purchases of the Company's
common stock, if any, made by the Company during the three months ended March 31, 2022:
(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
January 1 through January
31, 2022
February 1 through February
28, 2022
March 1 through March 31,
2022
Total for the quarter
100,703 $
121,315
78,357
300,375 $
218.53
201.07
185.14
202.77
100,703 $
24,297,325
121,315
78,357
300,375
30,000,000
15,435,424
31
Stock Performance Graph
32
Item 6.
[Reserved]
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
General
The Company's financial performance continues to be dependent in large part upon the growth in its outstanding loans
receivable, the maintenance of loan quality and acceptable levels of operating expenses. Since March 31, 2018, gross loans
receivable have increased at a 10.97% annual compounded rate from $1.00 billion to $1.52 billion at March 31, 2022. We
believe we were able to improve our gross loans receivable growth rates through acquisitions, improved marketing processes,
and analytics. The Company plans to enter into new markets through opening new branches and acquisitions as opportunities
arise.
The Company offers an income tax return preparation and electronic filing program in all but a few of its branches. The
Company prepared approximately 81,000, 77,000, and 84,000 returns in each of the fiscal years 2022, 2021, and 2020,
respectively. Revenues from the Company’s tax preparation business in fiscal 2022 amounted to approximately $21.7 million, a
19.9% increase over the $18.1 million earned during fiscal 2021.
The following table sets forth certain information derived from the Company's consolidated statements of operations and
balance sheets, as well as operating data and ratios, for the periods indicated:
Gross loans receivable
Average gross loans receivable (1)
Net loans receivable (2)
Average net loans receivable (3)
Expenses as a percentage of total revenue:
Provision for credit losses
General and administrative
Interest expense
Operating income as a % of total revenue (4)
2022
Years Ended March 31,
2021
(Dollars in thousands)
2020
$ 1,522,789
$ 1,377,740
$ 1,119,758
$ 1,014,984
$ 1,104,746
$ 1,143,186
$
825,382
$
848,732
$ 1,209,871
$ 1,256,389
$
900,891
$
928,408
32.0 %
51.0 %
5.7 %
17.0 %
16.4 %
57.5 %
4.9 %
26.1 %
30.8 %
58.9 %
4.4 %
10.3 %
Loan volume (5)
3,267,860
2,371,981
2,929,265
Net charge-offs as percent of average net loans receivable
14.2 %
14.1 %
18.0 %
Return on average assets (trailing 12 months)
Return on average equity (trailing 12 months)
4.8 %
9.1 %
13.4 %
22.8 %
2.7 %
6.1 %
Branches opened or acquired (merged or closed), net
(38)
(38)
50
Branches open (at period end)
_______________________________________________________
(1) Average gross loans receivable have 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 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 loan balances originated by the Company. It does not include loans purchased through acquisitions.
1,167
1,205
1,243
33
Comparison of Fiscal 2022 Versus Fiscal 2021
Net income for fiscal 2022 was $53.9 million, a 38.9% decrease from the $88.3 million earned during fiscal 2021. The decrease
in net income from was primarily due to a $100.0 million increase in the provision for credit losses partially offset by a $56.9
million increase in revenue.
Operating income (revenues less provision for credit losses and general and administrative expenses) during fiscal 2022
decreased $38.1 million.
Total revenues increased $56.9 million, or 10.8%, to $582.4 million in fiscal 2022, from $525.5 million in fiscal 2021. At
March 31, 2022, the Company had 1,167 branches in operation, a decrease of 38 branches from March 31, 2021.
Interest and fee income during fiscal 2022 increased by $34.6 million, or 7.7%, from fiscal 2021. The increase was primarily
due to an increase in average net loans receivable. Net loans receivable outstanding at March 31, 2022 increased 35.7%
compared to March 31, 2021, and average net loans receivable outstanding increased 19.6% during fiscal 2022 compared to
fiscal 2021. Interest and fee income was also impacted by decreasing yields as the portfolio mix shifted to larger lower rate
loans during the year. We expect the portfolio to continue to shift towards larger lower rate loans in the near term which should
continue to decrease interest and fee yields in the future.
Insurance commissions and other income increased by $22.3 million, or 30.0%, from fiscal 2021 to fiscal 2022. Insurance
commissions increased by $12.1 million, or 27.3%, from fiscal 2021 to fiscal 2022 due to an increase in loan volume in states
where we offer our insurance products along with the shift towards larger loans. The sale of insurance products is limited to
large loans in several states in which we operate. Other income increased by $10.2 million, or 33.9%, from fiscal 2021 to fiscal
2022 primarily due to an increase in tax preparation income of $3.6 million and increase in revenue from the Company's motor
club product of $6.9 million.
The provision for losses during fiscal 2022 increased by $100.0 million, or 115.9%, from the previous year. This increase can
mostly be attributed to overall growth in the portfolio along with an increase in delinquency and charge-off rates during the
year. Accounts that were 91 days or more past due represented 4.5% and 3.1% of our loan portfolio on a recency basis at
March 31, 2022 and March 31, 2021, respectively. The Company's year-over-year charge-off ratio (net charge-offs as a
percentage of average net loans receivable) increased from 14.1% for the year ended March 31, 2021 to 14.2% for the year
ended March 31, 2022.
Customers who are new borrowers to the Company (less than two years since their first origination at the time of their current
loan) as a percentage of the year-end portfolio have increased a relative 2.2% year over year. These "new to World" customers
now account for 31.7% of the portfolio, an increase from 31.0% last year. Customers who were with the Company for less than
five months have increased 56.0% from 8.4% to 13.1%. This increased weighting of new borrowers, our riskiest customer type,
in the portfolio contributed to the increase in delinquency and charge-off rates of the overall portfolio. In addition to the
increase in portfolio weighting towards less tenured customers during the last 12 months.
Charge-off rate for the past ten fiscal years averaged 15.0%, with a high of 18.0% (fiscal 2020) and a low of 12.8% (fiscal
2015). In fiscal 2022 the charge-off rate was 14.2%. The following table presents the Company's charge-off ratios since 2012.
34
_______________________________________________________
2015 In fiscal 2015 the Company's net charge-off rate decreased to 12.8%. The net charge-off rate benefited from a change in branch
level incentives during the year, which allows managers to continue collection efforts on accounts that are 91 days or more past due
without having their monthly bonus negatively impacted. As expected, the change resulted in an increase in accounts 91 days or
more past due and fewer charge-offs during fiscal 2015. We estimate the net charge-off rate would have been approximately 14.0%
for fiscal 2015 excluding the impact of the change.
General and administrative expenses during fiscal 2022 decreased by $5.0 million, or 1.7%, over the previous fiscal year.
General and administrative expenses, when divided by average open branches, decreased 1.0% from fiscal 2021 to fiscal 2022
and, overall, general and administrative expenses as a percent of total revenues decreased to 51.0% in fiscal 2022 from 57.5%
in fiscal 2021. The change in general and administrative expense is explained in greater detail below.
Personnel expense totaled $183.1 million for fiscal 2022, a $1.6 million, or 0.8%, decrease over fiscal 2021. The
decrease was largely due to a $2.5 million decrease related to the deferred origination payroll expense under ASC 310
as a result of higher originations during the year. Regular payroll expense decreased $1.7 million year over year
primarily due to decreases in headcount and benefit expense increased $0.2 million.
Occupancy and equipment expense totaled $52.1 million for fiscal 2022, a $4.1 million, or 7.3%, decrease over fiscal
2021. Occupancy and equipment expense is generally a function of the number of branches the Company has open
throughout the year. In fiscal 2022 the expense per average open branch decreased to $43.4 thousand, down from
$45.5 thousand in fiscal 2021. Occupancy and equipment expense decreased by $2.5 million due to the timing of write
down of signage as a result of rebranding our branch offices beginning in fiscal 2021.
Advertising expense totaled $18.3 million for fiscal 2022, a $1.1 million, or 6.4%, increase over fiscal 2021. The
increase was primarily due to increased spending in our digital marketing.
Amortization of intangible assets totaled $5.0 million for fiscal 2022, a $0.5 million, or 8.5%, decrease over fiscal
2021, which primarily relates to a corresponding decrease in total intangible assets during the comparative periods due
to acquisition activity during the current and prior year.
Other expense totaled $38.7 million for fiscal 2022, remaining relatively flat when compared to fiscal year 2021.
35
Interest expense increased by $7.7 million, or 30.1%, during fiscal 2022 when compared to the previous fiscal year as a result
of an increase in average debt outstanding of 33.1% partially offset by a decrease in the effective interest rate from 5.8% to
5.7%.
Income tax expense decreased $11.5 million, or 49.6% for fiscal 2022 compared to the prior fiscal year. The effective tax rate
decreased to 17.8% for fiscal 2022 compared to 20.8% for fiscal 2021. The decrease was primarily due to an increase in the
permanent tax benefit related to non-qualified stock option exercises and vesting of restricted stock and state tax credits
recognized in the current fiscal year. This was partially offset by an increase in the disallowed executive compensation under
Section 162(m) in the current year.
Comparison of Fiscal 2021 Versus Fiscal 2020
For a comparison of our results of operations for the years ended March 31, 2021 and March 31, 2020, see Part II, Item 7,
"Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K
for the fiscal year ended March 31, 2021 (which was filed with the SEC on June 2, 2021), which comparison is incorporated
herein by reference.
Regulatory Matters
Mexico Investigation
As previously disclosed, the Company voluntarily contacted the SEC and DOJ in June 2017 to advise both agencies that an
internal investigation of its historical operations in Mexico was underway. The Company has fully cooperated with both
agencies. The Company sold its Mexican subsidiaries in 2018 and the Company and its subsidiaries no longer operate in
Mexico.
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
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 disgorgement, prejudgment interest and civil penalties totaling $21,726,000 to the SEC.
CFPB Rulemaking Initiative
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 originally required 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”), however the ability to repay requirements was rescinded in July 2020. 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”). 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.
In July 2020, the CFPB rescinded provisions of the Rule governing the ability to repay requirements. Currently, the payment
requirements are scheduled to take effect in June 2022. Any regulatory changes could have effects beyond those currently
contemplated that could further materially and adversely impact our business and operations. Unless rescinded or otherwise
36
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.
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
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. See Part I, Item 1,
“Business - Government Regulation - Federal 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,” for more information regarding these
regulatory and related risks.
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. The significant accounting policies used in the preparation of the Consolidated Financial Statements
are discussed in Note 1 to the Consolidated Financial Statements. Certain critical 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, revenues, 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.
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 1 to the 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 our 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 our 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
37
Internal Revenue Service or by 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 740, the Company includes 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 that considers 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.
Quarterly Information and Seasonality
The Company's loan volume and corresponding loans receivable follow seasonal trends. The Company's highest loan demand
typically occurs from October through December, its third fiscal quarter. Loan demand has generally been the lowest and loan
repayment highest from January to March, its fourth fiscal quarter. Loan volume and average balances typically remain
relatively level during the remainder of the year. This seasonal trend affects quarterly operating performance through
corresponding fluctuations in interest and fee income and insurance commissions earned and the provision for loan losses
recorded, as well as fluctuations in the Company's cash needs. Consequently, operating results for the Company's third fiscal
quarter generally are significantly lower than in other quarters and operating results for its fourth fiscal quarter are significantly
higher than in other quarters.
The following table sets forth, on a quarterly basis, certain items included in the Company's unaudited Consolidated Financial
Statements and shows the number of branches open during fiscal years 2022 and 2021.
At or for the Three Months Ended
2022
2021
June
30,
September
30,
December
31,
March
31,
June
30,
September
30,
December
31,
March
31,
(Dollars in thousands)
Total revenues $ 129,659 $ 137,827 $ 148,572 $ 166,329 $ 123,867 $ 124,441 $ 130,946 $ 146,280
Provision for
credit losses
56,459 $ 57,439 $ 25,661 $
26,090 $ 28,857 $
$ 30,266 $
42,044 $
5,636
General and
administrative
expenses
$ 73,351
$
74,989
$
74,229
$ 74,607
$ 71,608
$
75,293
$ 77,875
$ 77,411
Net income
$ 15,771 $
12,439 $
7,327 $ 18,382 $ 15,509 $
13,398 $ 14,491 $ 44,884
Gross loans
receivable
Number of
branches open
$ 1,223,139 $ 1,394,827 $ 1,606,111 $ 1,522,789 $ 1,067,877 $ 1,109,366 $ 1,264,530 $ 1,104,746
1,205
1,202
1,202
1,167
1,240
1,232
1,230
1,205
Liquidity and Capital Resources
The Company has financed and continues to finance its operations, acquisitions and branch expansion through a combination of
cash flows from operations and borrowings from its institutional lenders. 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. As
the Company's gross loans receivable increased from $1.13 billion at March 31, 2019 to $1.52 billion at March 31, 2022, net
cash provided by operating activities for fiscal years 2022, 2021, and 2020 was $281.5 million, $217.3 million, and $281.0
million, respectively.
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-
38
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.
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.
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.
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, our revolving credit facility and the Notes limit share
repurchases to $90.0 million from March 26, 2021 through June 30, 2022 plus up to 50% of consolidated adjusted net income
for the period commencing January 1, 2019. As of March 31, 2022, subject to further approval from our Board of Directors, we
could repurchase approximately $32.9 million of shares under the terms of our debt facilities. 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 did not acquire any branches during fiscal 2022. 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.
The Company has a revolving credit facility with a syndicate of banks. The revolving credit facility provides for revolving
borrowings of up to the lesser of (a) the aggregate commitments under the facility and (b) a borrowing base, and it includes a
$300,000 letter of credit under a $1.5 million subfacility. In March of 2021, the credit facility was amended and restated to,
among other things, (i) reduced the applicable margin to 3.50% rather than adjusting it from 3.50% to 4.50% based on the
Company's EBITDA ratio; (ii) permit the Company to purchase its equity securities or make other distributions in respect of its
equity securities in the amount of $90 million through June 30, 2022 plus up to 50% of consolidated adjusted net income for the
period commencing on January 1, 2019, subject to certain restrictions; and (iii) extend the maturity date of the amended and
restated revolving credit agreement to June 7, 2024. In September of 2021, the credit facility was amended in connection with
the Company’s Notes offering to permit the issuance of the Notes.
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 phasing out of LIBOR and will work to limit
any negative impacts that could result during any transition away from LIBOR. At March 31, 2022, 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, 2022; 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, and (b) an advance rate percentage that ranges from 74% to 80% based on a collateral performance
indicator, as more completely described below. Further, under the amended and restated revolving credit agreement, the
administrative agent has the right 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.
For the year ended March 31, 2022, the effective interest rate, including the commitment fee, on borrowings under the
revolving credit facility was 5.0%. The Company pays a commitment fee equal to 0.50% per annum of the daily unused portion
of the commitments. On March 31, 2022 $397.0 million was outstanding under this facility, and there was $287.7 million of
unused borrowing availability under the borrowing base limitations.
39
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 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 agreement governing the Company’s revolving credit facility contains affirmative and negative covenants, including
covenants that 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 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 agreement's
financial covenants include (i) a minimum consolidated net worth of $325.0 million on and after December 31, 2020; (ii) a
maximum ratio of total debt to consolidated adjusted net worth of 2.5 to 1.0; (iii) a maximum collateral performance indicator
of 24% as of the end of each calendar month; and (iv) a minimum fixed charges coverage ratio as further discussed below.
As further discussed in Note 18 to the Consolidated Financial Statements, on May 3rd, 2022, the Company entered into the
Seventh Amendment to its Amended and Restated Revolving Credit Agreement (the “Seventh Amendment”) to, among other
things, reduce the required ratio for Net Income Available for Fixed Charges to Fixed Charges from 2.75 to 1.0 to 2.10 to 1.0
for each fiscal quarter from March 31, 2022 to June 30, 2023, with the ratio increasing to 2.75 to 1.0 for each fiscal quarter
thereafter.
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 these covenants
at March 31, 2022 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 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,
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.
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
and for the foreseeable future beyond that). Except as otherwise discussed in this report including, but not limited to, any
discussions in Part 1, Item 1A, "Risk Factors" (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
On February 24, 2022, 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.
As of March 31, 2022, the Company had $15.4 million in aggregate remaining repurchase capacity under its current share
repurchase program. 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, restrictions under the Company's debt agreements and other
market and economic conditions.
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 total share repurchases of at least $90.0 million from March 26, 2021
through June 30, 2022. Additional share repurchases can be made subject to compliance with, among other things, applicable
40
restricted payment covenants under the revolving credit 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 March 31, 2022, the Company's debt outstanding was $697.0 million and its shareholders' equity
was $373.0 million resulting in a debt-to-equity ratio of 1.9:1.0. 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 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 materially 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. It
is reasonable to anticipate that such a change in customer preference would result in an increase in total loan receivables and an
increase in absolute revenues to be generated from that larger amount of loans receivable. The Company believes that this
increase in absolute revenues should offset any increase in operating costs. In addition, because the Company’s loans have a
relatively short contractual term and average life, it is unlikely that loans made at any given point in time will be repaid with
significantly inflated dollars.
Legal Matters
From time to time the Company is involved in litigation relating to claims arising out of its operations in the normal course of
business. See Part I, Item 3, “Legal Proceedings” and Note 16 to our audited Consolidated Financial Statements for further
discussion of legal matters.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Our operations expose us to a variety of market risks, including the effects of changes in interest rates. We monitor and manage
these financial exposures as an integral part of our overall risk management program.
Interest Rate Risk
The Company’s outstanding debt under its revolving credit facility was $397.0 million at March 31, 2022. Interest on
borrowings under this facility is based on the greater of 4.5% or one month LIBOR plus an applicable margin of 3.5%.
Based on the outstanding balance under the Company's revolving credit facility at March 31, 2022, a change of 1% in the
LIBOR interest rate would cause a change in interest expense of approximately $4.0 million on an annual basis.
41
Part II
Item 8.
Financial Statements and Supplementary Data
CONSOLIDATED BALANCE SHEETS
ASSETS
Cash and cash equivalents
Gross loans receivable
Less:
Unearned interest, insurance and fees
Allowance for credit losses
Loans receivable, net
Operating lease right‐of‐use assets, net
Finance lease right‐of‐use assets, net
Property and equipment, net
Deferred income taxes, net
Other assets, net
Goodwill
Intangible assets, net
Assets held for sale (Note 17)
Total assets
LIABILITIES & SHAREHOLDERS' EQUITY
Liabilities:
Senior notes payable
Senior unsecured notes payable, net
Income taxes payable
Operating lease liability
Finance lease liability
Accounts payable and accrued expenses
Total liabilities
Commitments and contingencies (Notes 9 and 16)
Shareholders' equity:
March 31,
2022
2021
$ 19,236,322 $ 15,746,454
1,522,788,860 1,104,746,261
(403,030,844) (279,364,584)
(134,242,862)
(91,722,288)
985,515,154 733,659,389
90,055,572
85,631,304
1,013,901
607,512
25,326,136
24,476,231
24,992,742
39,801,457
31,423,134
35,901,704
7,370,791
7,370,791
23,537,517
19,756,114
1,143,528
—
$ 1,218,296,589 $ 954,269,164
$ 396,972,746 $ 405,007,500
—
295,393,991
11,575,861
7,384,169
91,132,722
87,399,049
585,353
80,067
41,040,287
58,042,139
845,272,161 549,341,723
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
6,348,314 and 6,805,294 shares at March 31, 2022 and March 31, 2021, respectively
Additional paid-in capital
Retained earnings
Total shareholders' equity
—
—
—
—
280,907,085 255,590,674
92,117,343 149,336,767
373,024,428 404,927,441
Total liabilities and shareholders' equity
$ 1,218,296,589 $ 954,269,164
See accompanying notes to Consolidated Financial Statements.
42
CONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended March 31,
2021
2020
2022
Revenues:
Interest and fee income
Insurance and other income, net
Total revenues
Expenses:
Provision for credit losses
General and administrative expenses:
Personnel
Occupancy and equipment
Advertising
Amortization of intangible assets
Other
Total general and administrative expenses
Interest expense
Total expenses
$ 485,666,579 $ 451,113,502 $ 508,326,771
81,702,244
582,387,545 525,533,267 590,029,015
74,419,765
96,720,966
186,207,341
86,244,714 181,730,182
183,058,343 184,620,515 203,774,574
54,237,835
24,304,023
5,010,626
60,166,202
297,176,097 302,186,290 347,493,260
56,160,268
17,190,676
5,474,240
38,740,591
52,084,641
18,298,212
5,010,275
38,724,626
33,424,788
25,896,130
516,808,226 414,129,840 555,119,572
25,698,836
Income before income taxes
65,579,319 111,403,427
34,909,443
Income taxes
Net income
Net income per common share:
Basic
Diluted
Weighted average common shares outstanding:
Basic
Diluted
11,659,482
23,120,599
6,751,965
$ 53,919,837 $ 88,282,828 $ 28,157,478
$
$
8.88 $
8.47 $
13.59 $
13.23 $
3.66
3.54
6,072,170
6,364,066
6,493,898
6,672,110
7,688,242
7,952,900
See accompanying notes to Consolidated Financial Statements.
43
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Year ended March 31, 2022
Common
Stock
Additional
Paid-in
Capital
Retained
Earnings
Total
Shareholders
' Equity
Shares
Balances at March 31, 2021
6,805,294 $ 255,590,674 149,336,767 404,927,441
Proceeds from exercise of stock
options
Common stock repurchases
Restricted common stock expense
under stock option plan, net of
cancellations ($5,072,230)
Stock option expense
Net income
Balances at March 31, 2022
154,699 12,805,646
(589,533)
— 12,805,646
— (111,139,261) (111,139,261)
(22,146)
—
—
9,036,852
3,473,913
—
6,348,314 $ 280,907,085
—
—
9,036,852
3,473,913
53,919,837 53,919,837
92,117,343 373,024,428
Year ended March 31, 2021
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
Common stock repurchases
Restricted common stock expense
under stock option plan, net of
cancellations ($3,173,735)
Stock option expense
Cumulative effect of adoption of ASC
326
Net income
Balances at March 31, 2021
165,237 12,268,554
(1,129,875)
— 12,268,554
— (102,452,302) (102,452,302)
(37,902) 12,302,869
3,804,674
—
— 12,302,869
3,804,674
—
—
—
(21,242,249) (21,242,249)
88,282,828 88,282,828
6,805,294 $ 255,590,674 149,336,767 404,927,441
—
—
Year ended March 31, 2020
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
Common stock repurchases
Restricted common stock expense
under stock option plan, net of
cancellations ($4,476,159)
Stock option expense
Net income
Balances at March 31, 2020
69,481
(1,520,679)
4,612,926
4,612,926
—
— (197,399,964) (197,399,964)
(25,086) 18,953,119
5,522,883
—
— 18,953,119
5,522,883
—
28,157,478 28,157,478
7,807,834 $ 227,214,577 184,748,490 411,963,067
—
—
See accompanying notes to Consolidated Financial Statements.
44
CONSOLIDATED STATEMENTS OF CASH FLOWS
Cash flow from operating activities:
Net income
Adjustments to reconcile net income to net cash provided by operating activities:
Loss on assets held for sale
Amortization of intangible assets
Amortization of historic tax credits
Amortization of deferred loan costs
Amortization of debt issuance costs
Provision for credit losses
Depreciation
Amortization of finance leases
Loss on sale of property and equipment
Deferred income tax expense (benefit)
Compensation related to stock option and restricted stock plans, net of taxes and
adjustments
Gain on sale of loans receivable
Gain on company-owned life insurance
Change in accounts:
Other assets, net
Income taxes payable and receivable
Accounts payable and accrued expenses
Net cash provided by operating activities
Cash flows from investing activities:
Increase in loans receivable, net
Net assets acquired from business combinations and asset acquisitions, primarily loans
Increase in intangible assets from acquisitions
Purchases of property and equipment
Proceeds from sale of property and equipment
Proceeds from the sale of assets held for sale
Proceeds from the sale of loans receivable
Proceeds from company-owned life insurance
Net cash used in investing activities
Cash flow from financing activities:
Borrowings from senior notes payable
Payments on senior notes payable
Issuance of senior unsecured notes payable
Loan costs associated with senior unsecured notes payable
Debt issuance costs associated with senior notes payable
Proceeds from exercise of stock options
Payments for taxes related to net share settlement of equity awards
Repurchase of common stock
Repayment of finance lease
Net cash provided by (used in) financing activities
Net change in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Supplemental Disclosures:
Interest paid during the year
Income taxes paid during the year
Years Ended March 31,
2021
2022
2020
$ 53,919,837 $ 88,282,828 $ 28,157,478
38,633
5,010,275
3,930,753
16,911,599
1,095,325
186,207,341
6,253,175
407,624
419,975
(14,808,715)
37,579
5,474,240
1,736,384
17,101,722
659,292
251,263
5,010,626
868,192
23,057,541
517,499
86,244,714 181,730,182
6,800,263
6,537,957
347,703
407,624
339,259
2,812,404
5,651,362
572,914
17,582,995
—
(106,885)
19,281,278
(24,667)
(1,064,897)
28,952,161
—
—
(8,193,529)
(4,191,692)
17,001,850
(8,959,922)
(6,584,895)
19,917,429
281,478,561 217,255,053 280,977,693
(4,234,933)
6,610,559
(18,258,393)
(445,343,593)
(9,631,112)
(1,228,872)
(6,070,414)
245,935
1,104,895
—
—
(460,923,161)
(46,445,094) (206,539,808)
(47,100,694)
(15,210,973)
(14,455,279)
(4,563,279)
(11,277,779)
(11,683,858)
284,869
346,943
—
2,810,391
449,327
—
—
1,997,279
(72,299,264) (279,088,691)
—
—
(784,250)
12,268,554
(3,173,735)
515,315,246 310,984,250 540,691,400
(523,350,000) (357,076,750) (341,531,400)
—
300,000,000
(5,119,647)
—
(991,400)
—
4,612,926
12,805,646
(4,476,159)
(5,072,230)
(111,139,261) (102,452,302) (197,399,964)
(510,916)
394,487
2,283,489
9,335,433
$ 19,236,322 $ 15,746,454 $ 11,618,922
(594,024)
182,934,468 (140,828,257)
4,127,532
11,618,922
3,489,868
15,746,454
(505,286)
$ 21,318,911 $ 24,993,898 $ 23,942,122
$ 30,941,852 $ 14,857,555 $ 15,711,692
See accompanying notes to Consolidated Financial Statements.
45
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) Summary of Significant Accounting Policies
The Company's accounting and reporting policies are in accordance with GAAP and conform to general practices within
the finance company industry. The following is a description of the more significant of these policies used in preparing the
Consolidated Financial Statements.
Nature of Operations
The Company is a small-dollar consumer finance (installment loan) 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. It also offers income tax return
preparation services to its customer base and to others.
As of March 31, 2022, the Company operated 1,167 branches in Alabama, Georgia, Idaho, Illinois, Indiana, Kentucky,
Louisiana, Mississippi, Missouri, New Mexico, Oklahoma, South Carolina, Tennessee, Texas, Utah, and
Wisconsin. Branches in the aforementioned states operate under one of the following names: World Finance Corporation
or World Finance.
Principles of Consolidation
The Consolidated Financial Statements include the accounts of World Acceptance Corporation and its wholly-owned
subsidiaries (the “Company”). Subsidiaries consist of operating entities in various states and WAC Insurance Company,
Ltd. (a captive reinsurance company established in fiscal 1994). All significant inter-company balances and transactions
have been eliminated in consolidation.
Use of Estimates in the Preparation of Consolidated Financial Statements
The preparation of 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 financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results
could differ from those estimates. The most significant item subject to such estimates and assumptions that could
materially change in the near term is the allowance for credit losses.
Reclassification
Certain prior period amounts have been reclassified to conform to the current presentation. Such reclassifications had no
impact on previously reported net income or shareholders' equity.
Business Segments
The Company reports operating segments in accordance with FASB ASC Topic 280. Operating segments are components
of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating
decision maker in deciding how to allocate resources and assess performance. FASB ASC Topic 280 requires that a public
enterprise report a measure of segment profit or loss, certain specific revenue and expense items, segment assets,
information about the way that the operating segments were determined and other items.
The Company has one reportable segment. The other revenue generating activities of the Company, including the sale of
insurance products, income tax preparation, and the automobile club, are done within the existing branch network in
conjunction with or as a complement to the lending operations. There is no discrete financial information available for
these activities, and they do not meet the criteria under FASB ASC Topic 280 to be considered operating segments.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all highly liquid investments with a maturity of three
months or less from the date of original issuance to be cash equivalents. As of March 31, 2022 and 2021 the Company had
$7.8 million and $7.0 million, respectively, in restricted cash associated with its captive insurance subsidiary that
reinsures a portion of the credit insurance sold in connection with loans made by the Company.
46
Loans and Interest and Fee Income
The Company is licensed to originate consumer loans in the states of Alabama, Georgia, Idaho, Illinois, Indiana,
Kentucky, Louisiana, Mississippi, Missouri, New Mexico, Oklahoma, South Carolina, Texas, Tennessee, Utah, and
Wisconsin. During fiscal 2022, 2021, and 2020 the Company originated loans generally ranging up to $6,000, with terms
of 60 months or fewer. Experience indicates that a majority of the consumer loans are refinanced, and the Company
accounts for the majority of the refinancings as new loans. Generally, a customer must make multiple payments in order
to qualify for refinancing. Furthermore, the Company's lending policy has predetermined lending amounts so that in most
cases a refinancing will result in advancing additional funds. The Company believes that the advancement of additional
funds constitutes more than a minor modification to the terms of the existing loan if the present value of the cash flows
under the terms of the new loan will be 10% or more of the present value of the remaining cash flows under the terms of
the original loan.
The following table sets forth information about our loan products for fiscal 2022:
Small loans
Large loans
Tax advance loans
Minimum
Origination
$
Maximum
Origination
2,450
25,000
5,000
500 $
2,500
500
Minimum
Term
(Months)
7
9
8
Maximum
Term
(Months)
36
60
8
Gross loans receivable at March 31, 2022 and 2021 consisted of the following:
Small loans
Large loans
Tax advance loans
Total gross loans
2022
727,852,627 $
789,112,912
5,823,321
1,522,788,860 $
2021
620,959,979
475,470,271
8,316,011
1,104,746,261
$
$
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.
Loans 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. Net unamortized deferred origination fees and costs
were $6.9 million and $5.1 million as of March 31, 2022 and 2021, respectively.
The Company recognizes interest and fee income using the interest method. Charges for late payments are credited to
income when collected.
With the exception of tax advance loans, which are interest free, the Company offers its loans at the prevailing statutory
rates for terms not to exceed 60 months. Management believes that the carrying value approximates the fair value of its
loan portfolio.
Nonaccrual Policy
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.
Allowance for Credit Losses
Refer to Note 2, “Allowance for Credit Losses and Credit Quality Information”, for information regarding the Company's
adoption of the CECL allowance model on April 1, 2020 and a description of the methodology it utilizes.
47
Impaired Loans
The Company defines impaired loans as bankrupt accounts and accounts 91 days or more past due on a recency basis. In
accordance with the Company’s charge-off policy, once a loan is deemed uncollectible, 100% of the net investment is
charged off, except in the case of a borrower who has filed for bankruptcy. As of March 31, 2022 and 2021, bankrupt
accounts that had not been charged off were approximately $5.4 million and $3.2 million, respectively. Bankrupt
accounts 91 days or more past due on a recency basis are reserved at 100% of the gross loan balance. The Company also
considers any accounts 91 days or more past due on a recency basis to be impaired, and such accounts are reserved at
100% of the gross loan balance, less a rehab rate for defaulted loans that do not charge-off.
Property and Equipment
Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is recorded using
the straight-line method over the estimated useful life of the related asset as follows: buildings, 25 to 40 years; furniture
and fixtures, 5 to 10 years; equipment, 3 to 7 years; and vehicles, 3 years. Amortization of leasehold improvements is
recorded using the straight-line method over the lesser of the estimated useful life of the asset, which is generally five
years, or the lease term, which is generally three to five years. Additions to premises and equipment and major
replacements or improvements are added at cost. Maintenance, repairs, and minor replacements are charged to operating
expense as incurred. When assets are retired or otherwise disposed of, the cost and accumulated depreciation are removed
from the accounts and any gain or loss is reflected in Insurance and other income, net in the Consolidated Statements of
Operations.
Leases
For any new or modified lease, the Company, at the inception of the contract, determines whether a contract is or contains
a lease. The Company records right-of-use ("ROU") assets and lease obligations for its finance and operating leases,
which are initially recognized based on the discounted future lease payments over the term of the lease. The Company
uses its effective annual interest rate as the discount rate when evaluating leases. Refer to Note 9, "Leases", for further
discussion of the discount rate.
Lease term is defined as the non-cancelable period of the lease plus any options to extend or terminate the lease when it is
reasonably certain that the Company will exercise the option. The Company has elected not to recognize ROU asset and
lease obligations for its short-term equipment leases, which are defined as leases with an initial term of 12 months or less.
Further, the Company has elected to not separate lease from non-lease components. Variable lease costs include expenses
such as common area maintenance, utilities, and repairs and maintenance.
Other Assets
Other assets include cash surrender value of life insurance policies, prepaid expenses, debt issuance costs related to the
senior notes payable, and other deposits.
Debt Issuance Costs
In accordance with ASC 835, debt issuance costs related to the senior unsecured notes payable are presented as a direct
deduction from its carrying value in the Consolidated Balance Sheets. Unamortized debt issuance costs related to the
senior unsecured notes payable as of March 31, 2022 were $4.6 million. There were no debt issuance costs related to the
senior unsecured notes payable as of March 31, 2021.
As the Company intends to pay down the senior notes payable throughout the contractual arrangement, debt issuance
costs related to this arrangement are presented as an asset within Other assets in the Consolidated Balance Sheets as
discussed above. Unamortized debt issuance costs related to the senior notes payable as of March 31, 2022 and 2021 were
$0.7 million and $1.3 million, respectively.
Intangible Assets and Goodwill
Intangible assets include the cost of acquiring existing customers ("customer lists"), and the fair value assigned to non-
compete agreements. Customer lists are amortized on a straight line or accelerated basis over their estimated period of
benefit, ranging from 8 to 23 years with a weighted average of approximately 9.4 years. Non-compete agreements are
amortized on a straight line basis over the term of the agreement, ranging from 3 to 5.3 years with a weighted average of
approximately 4.7 years.
48
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
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.
Non-compete agreements are valued at the stated amount paid to the other party for these agreements, which the
Company believes approximates the fair value. The fair value of the customer lists is based on a valuation model that
utilizes the Company’s historical data to estimate the value of any acquired customer lists. In a business combination, the
remaining excess of the purchase price over the fair value of the tangible assets, customer list, and non-compete
agreements is allocated to goodwill. The branches the Company acquires are small, privately-owned branches, which do
not have sufficient historical data to determine customer attrition. The Company believes that the customers acquired have
the same characteristics and perform similarly to its customers. Therefore, the Company utilized the attrition patterns of
its customers when developing the estimate of attrition for acquired customers. This estimation method is re-evaluated
periodically.
The Company evaluates goodwill annually for impairment in the fourth quarter of the fiscal year using the market value-
based approach. The Company has one reporting unit, and the Company has multiple components, the lowest level of
which is individual branches. The Company’s components are aggregated for impairment testing because they have
similar economic characteristics.
Impairment of Long-Lived Assets
The Company assesses impairment of long-lived assets, including property and equipment and intangible assets,
whenever changes or events indicate that the carrying amount may not be recoverable. The Company assesses impairment
of these assets generally at the branch level based on the operating cash flows of the branch and the Company’s plans for
branch closings. The Company will write down such assets to fair value if, based on an analysis, the sum of the expected
future undiscounted cash flows is less than the carrying amount of the assets. The Company did not record any
impairment charges for the fiscal years ended March 31, 2022, 2021, or 2020.
Fair Value of Financial Instruments
FASB ASC Topic 825 requires disclosures about the fair value of all financial instruments, regardless of whether the
financial instrument is recognized on the balance sheet, for which it is practicable to estimate that value. In cases where
quoted market prices are not available, fair values are based on estimates using present value or other valuation
techniques. The Company’s financial instruments for the periods reported consist of the following: cash and cash
equivalents, loans receivable, senior notes payable, and senior unsecured notes payable.
Loans receivable are originated at prevailing market rates and have an average life of approximately 8 months. Given the
short-term nature of these loans, they are continually repriced at current market rates. The Company’s senior notes
payable 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.
Insurance Premiums and Commissions
Insurance premiums for credit life, accident and health, property and unemployment insurance written in connection with
certain loans, net of refunds and applicable advance insurance commissions retained by the Company, are remitted
monthly to an insurance company. All commissions are credited to unearned insurance commissions and recognized as
income over the life of the related insurance contracts. The Company recognizes insurance income using the Rule of 78s
method for credit life (decreasing term), credit accident and health, unemployment insurance and the Pro Rata method for
credit life (level term) and credit property.
Non-filing Insurance
Non-filing insurance premiums are charged on certain loans in lieu of recording and perfecting the Company's security
interest in the assets pledged. The premiums and recoveries are remitted to a third party insurance company and are not
reflected in the accompanying Consolidated Financial Statements (see Note 8).
49
Claims paid by the third party insurance company result in a reduction to loan losses. Certain losses related to such loans,
which are not recoverable through life, accident and health, property, or unemployment insurance claims, are reimbursed
through non-filing insurance claims subject to policy limitations. Any remaining losses are charged to the allowance for
credit losses.
Income Taxes
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for
the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates
is recognized in income in the period that includes the enactment date.
The Company recognizes the effect of income tax positions only if those positions are more likely than not of being
sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being
realized. Changes in recognition or measurement are reflected in the period in which the change in judgment related to
additional facts and circumstances occurs.
Earnings Per Share
Earnings per share (“EPS”) is computed in accordance with FASB ASC Topic 260. Basic EPS includes no dilution and is
computed by dividing net income by the weighted-average number of common shares outstanding for the period. Diluted
EPS reflects the potential dilution of securities that could share in the earnings of the Company. Potential common stock
included in the diluted EPS computation consists of stock options and restricted stock, which are computed using the
treasury stock method. See Note 11 for the reconciliation of the numerators and denominators for basic and dilutive EPS
calculations.
Stock-Based Compensation
FASB ASC Topic 718-10 requires companies to recognize in the income statement the grant-date fair value of stock
options and other equity-based compensation issued to employees. FASB ASC Topic 718-10 does not change the
accounting guidance for share-based payment transactions with parties other than employees provided in FASB ASC
Topic 718-10. Under FASB ASC Topic 718-10, the way an award is classified will affect the measurement of
compensation cost. Liability-classified awards are remeasured to fair value at each balance-sheet date until the award is
settled. Equity-classified awards are measured at grant-date fair value, amortized over the subsequent vesting period, and
are not subsequently remeasured. The fair value of non-vested stock awards for the purposes of recognizing stock-based
compensation expense is the market price of the stock on the grant date. The fair value of options is estimated on the grant
date using the Black-Scholes option pricing model (see Note 12). The Company accounts for forfeitures as they occur. At
March 31, 2022, the Company had several share-based employee compensation plans, which are described more fully in
Note 12.
Share Repurchases
On February 24, 2022, 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. As of March 31, 2022, the Company had $15.4 million in aggregate remaining repurchase
capacity under its current share repurchase program. 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,
restrictions under the revolving credit facility and other market and economic conditions.
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, our revolving credit agreement and the
Notes limit share repurchases to $90 million from March 26, 2021 through June 30, 2022 plus up to 50% of consolidated
adjusted net income for the period commencing January 1, 2019. As of March 31, 2022 our debt outstanding was $697.0
million and our shareholders' equity was $373.0 million resulting in a debt-to-equity ratio of 1.9:1.0.
50
Concentration of Risk
The Company generally serves individuals with limited access to other sources of consumer credit such as banks, credit
unions, other consumer finance businesses and credit card lenders. During the year ended March 31, 2022, the Company
operated in sixteen states in the United States. For fiscal years ended March 31, 2022, 2021, and 2020, gross loan
receivable within the Company's four largest states accounted for approximately 53% of the Company's gross loans
receivable balance.
The Company maintains amounts in bank accounts which, at times, may exceed federally insured limits. The Company
has not experienced losses in such accounts, which are maintained with large domestic banks. Management believes the
Company’s exposure to credit risk is minimal for these accounts.
Advertising Costs
Advertising costs are expensed when incurred. Advertising costs were approximately $18.3 million, $17.2 million, and
$24.3 million for fiscal years 2022, 2021, and 2020, respectively.
Recently Issued Accounting Standards Not Yet Adopted
Troubled Debt Restructurings and Vintage Disclosures
In March 2022, the FASB issued ASU 2022-02, Troubled Debt Restructurings and Vintage Disclosures. The amendments
in this update eliminate the accounting guidance for troubled debt restructurings by creditors in Subtopic 310-40,
Receivables—Troubled Debt Restructurings by Creditors, while enhancing disclosure requirements for certain loan
refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. Additionally, for public
business entities, the amendments in this update require that an entity disclose current-period gross write-offs by year of
origination for financing receivables and net investments in leases within the scope of Subtopic 326-20, Financial
Instruments—Credit Losses—Measured at Amortized Cost. For entities that have adopted the amendments in Update
2016-13, the amendments in this update are effective for fiscal years beginning after December 15, 2022, including
interim periods within those fiscal years and should be applied prospectively, with the exception of the transition method
related to the recognition and measurement of troubled debt restructurings in which an entity has the option to apply a
modified retrospective transition method. Early adoption is permitted. We are currently evaluating the impact the
adoption of this update will have on our Consolidated Financial Statements.
We reviewed all other 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.
(2) Allowance for Credit Losses and Credit Quality Information
$
The following is a summary of gross loans receivable by Customer Tenure as of:
Customer Tenure
0 to 5 months
6 to 17 months
18 to 35 months
36 to 59 months
60+ months
198,740,475 $
133,665,566
204,940,323
208,936,027
770,683,149
March 31, 2022
Tax advance loans
Total gross loans
$
5,823,320
1,522,788,860 $
March 31, 2021
92,378,097
106,742,121
169,361,910
130,655,627
597,292,495
8,316,011
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 Statements of Operations.
51
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.
The following tables provide a breakdown of the Company’s gross loans receivable by current payment performance on a
recency basis and year of origination at March 31, 2022:
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
$ 1,322,332,136 $ 34,273,199 $ 2,665,078 $
152,105 $
21,539 $
3,972 $ 1,359,448,029
30 - 60 days
past due
61 - 90 days
past due
91 or more days
past due
49,517,859
2,114,463
247,291
28,011
2,664
—
51,910,288
36,707,960
989,136
130,763
13,031
5,594
—
37,846,484
64,238,626
3,239,753
248,596
24,377
5,386
4,001
67,760,739
Total
$ 1,472,796,581 $ 40,616,551 $ 3,291,728 $
217,524 $
35,183 $
7,973 $ 1,516,965,540
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
$
4,737,741 $
7,033 $
— $
— $
— $
— $
4,744,774
30 - 60 days
past due
61 - 90 days
past due
1,060,811
1,334
—
—
—
—
1,062,145
—
432
—
—
—
—
432
91 or more days
past due
2,922
13,047
Total
$
5,801,474 $
21,846 $
—
— $
—
—
—
15,969
— $
— $
— $
5,823,320
Total gross
loans
$ 1,522,788,860
52
The following tables provide 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
61 - 90 days
past due
91 or more
days past due
21,862,634
2,011,261
153,417
21,426
3,500
2,069
24,054,307
18,039,010
1,208,936
88,119
11,800
571
—
19,348,436
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
61 - 90 days
past due
91 or more
days past due
Total
Total gross
loans
686,667
1,423
—
—
—
—
688,090
—
—
321
—
—
—
321
—
34,509
656
$ 8,269,742 $
45,292 $
977 $
—
— $
—
— $
—
35,165
— $
8,316,011
$ 1,104,746,261
53
The following tables provide a breakdown of the Company’s gross loans receivable by current payment performance on a
contractual basis and year of origination at March 31, 2022:
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
$ 1,290,448,366 $ 29,913,995 $ 1,994,474 $
68,836 $
9,586 $
699 $ 1,322,435,956
30 - 60 days
past due
61 - 90 days
past due
91 or more
days past
due
57,225,953
1,508,794
91,118
5,519
—
—
58,831,384
45,276,797
1,271,187
96,233
986
—
—
46,645,203
79,845,465
7,922,574
1,109,903
142,183
25,598
7,274
89,052,997
Total
$ 1,472,796,581 $ 40,616,550 $ 3,291,728 $
217,524 $
35,184 $
7,973 $ 1,516,965,540
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
$
4,737,741 $
— $
— $
— $
— $
— $
4,737,741
30 - 60 days
past due
61 - 90 days
past due
91 or more
days past
due
1,060,329
—
—
—
—
—
1,060,329
—
—
—
—
—
—
—
3,404
21,846
—
—
—
—
25,250
Total
$
5,801,474 $
21,846 $
— $
— $
— $
— $
5,823,320
Total gross
loans
$ 1,522,788,860
54
The following tables provide 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
61 - 90 days
past due
91 or more days
past due
29,300,148
1,872,816
72,187
1,322
—
—
31,246,473
23,075,264
1,363,196
75,343
567
—
—
24,514,370
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
61 - 90 days
past due
91 or more days
past due
686,667
—
—
—
—
—
686,667
—
—
—
—
—
—
—
—
45,292
977
—
—
—
46,269
Total
$
8,269,742 $
45,292 $
977 $
— $
— $
— $
8,316,011
Total gross
loans
$ 1,104,746,261
55
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 looks 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
To determine how well each metric predicts default risk, the Company used 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. The Customer
Tenure buckets used in the allowance for credit loss calculation are:
1. 0 to 5 months
2. 6 to 17 months
3. 18 to 35 months
4. 36 to 59 months
5. 60+ months
Management will continue to monitor this credit metric on a quarterly basis.
Management estimates an allowance for each 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.
56
The following table is an aging analysis on a recency basis at amortized cost of the Company’s gross loans receivable at
March 31, 2022:
Customer Tenure
Current
Days Past Due - Recency Basis
61 - 90
30 - 60
Over 90
Total Past Due Total Loans
0 to 5 months
6 to 17 months
18 to 35 months
36 to 59 months
60+ months
$ 145,168,588 $ 13,450,365 $ 14,196,717 $ 25,924,805 $ 53,571,887 $ 198,740,475
133,665,566
116,065,794
204,940,323
183,697,553
208,936,027
193,820,229
770,683,149
720,695,865
4,148,743
4,903,686
3,452,087
11,145,251
5,548,699
7,220,814
5,951,049
19,739,361
7,902,330
9,118,270
5,712,662
19,102,672
17,599,772
21,242,770
15,115,798
49,987,284
Tax advance loans
Total gross loans
4,744,774
1,364,192,803
1,062,145
52,972,433
432
37,846,916
15,969
5,823,320
1,078,546
67,776,708 158,596,057 1,522,788,860
Unearned interest,
insurance and fees
Total net loans
Percentage of period-
end gross loans
receivable
(361,055,818)
(403,030,844)
$ 1,003,136,985 $ 38,952,417 $ 27,830,114 $ 49,838,500 $ 116,621,031 $ 1,119,758,016
(10,016,802)
(14,020,016)
(17,938,208)
(41,975,026)
3.5%
2.5%
4.5%
10.4%
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:
Customer Tenure
0 to 5 months
6 to 17 months
18 to 35 months
36 to 59 months
60+ months
Tax advance loans
Total gross loans
Unearned interest,
insurance and fees
Total net loans
Percentage of period-
end gross loans
receivable
Current
$ 72,702,970 $
94,466,209
158,217,605
123,542,346
569,639,500
7,592,435
1,026,161,065
Total Past Due Total Loans
Days Past Due - Recency Basis
61 - 90
5,680,380 $
2,798,411
2,592,402
1,753,291
6,523,952
30 - 60
4,799,102 $
3,187,347
3,570,696
2,432,489
10,064,674
Over 90
9,195,642 $ 19,675,124 $
12,275,913
6,290,155
11,144,306
4,981,208
2,927,501
7,113,281
27,652,996
11,064,370
92,378,094
106,742,122
169,361,911
130,655,627
597,292,496
688,090
24,742,398
321
19,348,757
35,165
34,494,041
723,576
8,316,011
78,585,196 1,104,746,261
(259,492,219)
(279,364,584)
$ 766,668,846 $ 18,485,622 $ 14,455,907 $ 25,771,302 $ 58,712,831 $ 825,381,677
(19,872,365)
(4,892,850)
(8,722,739)
(6,256,776)
2.2%
1.8%
3.1%
7.1%
57
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, 2022:
Days Past Due - Contractual Basis
Loans
0 to 5 months
6 to 17 months
18 to 35 months
36 to 59 months
60+ months
Tax advance loans
Total gross loans
Unearned interest,
insurance and fees
Total Past
Due
30 - 60
Current
Over 90
61 - 90
$ 140,570,461 $ 14,090,712 $ 15,380,836 $ 28,698,466 $ 58,170,014 $
112,465,841
4,922,939 10,244,439 21,199,725
177,565,328
188,849,569
702,984,756
15,443,941 28,608,833 67,698,393
6,273,351 13,033,829 27,374,995
8,467,431 20,086,458
23,645,619
4,624,136
6,032,347
8,067,815
6,994,891
4,737,742
1,085,578
$ 1,327,173,697 $ 59,891,713 $ 46,645,203 $ 89,078,247 $ 195,615,163 $
1,060,329
25,249
—
Total Loans
198,740,475
133,665,566
204,940,323
208,936,027
770,683,149
5,823,320
1,522,788,860
$ (351,258,109) $ (15,851,316) $ (12,345,412) $ (23,576,007) $ (51,772,735) $
(403,030,844)
Total net loans
$ 975,915,588 $ 44,040,397 $ 34,299,791 $ 65,502,240 $ 143,842,428 $
1,119,758,016
Percentage of period-
end gross loans
receivable
3.9%
3.1%
5.8%
12.8%
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:
Days Past Due - Contractual Basis
Loans
0 to 5 months
6 to 17 months
18 to 35 months
36 to 59 months
60+ months
Tax advance loans
Total gross loans
Unearned interest,
insurance and fees
Current
$ 70,532,439 $
90,679,304
153,922,334
120,168,698
554,320,865
30 - 60
61 - 90
Over 90
Total Past
Due
Total Loans
5,245,878 $
6,019,264 $ 10,580,514 $ 21,845,656 $
92,378,095
3,936,937
3,267,446
8,858,434 16,062,817
106,742,121
4,471,202
3,488,629
7,479,745 15,439,576
169,361,910
3,229,253
2,337,625
4,920,052 10,486,930
130,655,628
14,363,203
9,401,406 19,207,022 42,971,631
597,292,496
7,583,075
732,936
$ 997,206,715 $ 31,933,140 $ 24,514,370 $ 51,092,036 $ 107,539,546 $
686,667
46,269
—
8,316,011
1,104,746,261
$ (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%
58
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 March 31, 2022, the Company reversed a total of $10.3 million of unpaid
accrued interest against interest income. During the twelve months ended March 31, 2022 and March 31, 2021, the
Company reversed a total of $30.6 million and $22.4 million, respectively of unpaid accrued interest against interest
income.
The following tables present the amortized cost basis of loans on nonaccrual status and the amortized cost basis of
nonaccrual loans without related expected credit loss as of March 31, 2022 and 2021. It also shows year-to-date interest
income recognized on nonaccrual loans for fiscal years ended March 31, 2022 and 2021:
Nonaccrual Financial Assets
Customer Tenure
As of March 31,
2022
Financial Assets 61
Days or More Past
Due, Not on
Nonaccrual Status
Nonaccrual Financial
Assets With No
Allowance as of
March 31, 2022
Interest Income
Recognized
Fiscal 2022
0 to 5 months
6 to 17 months
18 to 35 months
36 to 59 months
60+ months
Tax advance loans
$
45,227,510 $
— $
— $
1,485,356
15,879,250
20,745,106
14,232,388
47,565,819
25,249
—
—
—
—
—
—
—
—
—
—
1,662,082
2,292,776
1,602,011
5,615,521
—
Unearned interest, insurance and
fees
Total
(38,026,011)
105,649,311 $
$
— $
— $
12,657,746
Nonaccrual Financial Assets
Customer Tenure
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
March 31, 2021
Interest Income
Recognized
Fiscal 2021
0 to 5 months
6 to 17 months
18 to 35 months
36 to 59 months
60+ months
Tax advance loans
$
17,191,922 $
13,211,641
12,088,377
8,161,951
31,925,232
46,269
Unearned interest, insurance and
fees
Total
(20,894,036)
61,731,356 $
$
59
— $
—
—
—
—
—
—
—
—
—
—
—
$1,705,371
2,433,144
2,195,160
1,609,059
6,747,722
—
— $
—
$14,690,456
The following is a summary of the changes in the allowance for credit losses for the years ended March 31, 2022, 2021,
and 2020:
Balance at beginning of period
Impact of ASC 326 adoption
Provision for credit losses
Charge-offs
Recoveries
Balance at end of period
(3) Property and Equipment
Property and equipment consist of:
Land
Building and leasehold improvements
Furniture and equipment
Less accumulated depreciation and amortization
Total
2020
2021
2022
81,519,624
96,487,856
$ 91,722,288
28,628,368
—
—
186,207,341
86,244,714 181,730,182
(164,747,550) (141,270,125) (183,439,199)
16,677,249
96,487,856
21,060,785
$ 134,242,862
21,631,475
91,722,288
$
March 31,
2022
100,443
18,477,313
56,273,499
74,851,255
(50,375,024)
$ 24,476,231
March 31,
2021
100,443
17,882,214
52,889,741
70,872,398
(45,546,262)
25,326,136
Depreciation expense was approximately $6.3 million, $6.5 million, and $6.8 million for the years ended March 31, 2022,
2021, and 2020, respectively.
(4)
Intangible Assets
The following table provides the gross carrying amount and related accumulated amortization of definite-lived intangible
assets:
March 31, 2022
March 31, 2021
Cost of customer lists
Value assigned to non-
compete agreements
Total
Gross
Carrying
Amount
$ 55,730,620
Accumulated
Amortization
Gross
Carrying
Amount
(36,907,598) 18,823,022 $ 54,777,749 (32,322,607) 22,455,142
Accumulated
Amortization
Net
Intangible
Asset
Net
Intangible
Asset
10,528,143
$ 66,258,763
(9,595,051)
(9,169,768) 1,082,375
(46,502,649) 19,756,114 $ 65,029,892 (41,492,375) 23,537,517
933,092 10,252,143
The estimated amortization expense for intangible assets for future fiscal years ended March 31 is as follows: $4.5 million
for 2023; $4.2 million for 2024; $3.8 million for 2025; $3.2 million for 2026; $2.7 million for 2027; and an aggregate of
$1.4 million for the years thereafter.
60
(5) Goodwill
The following summarizes the changes in the carrying amount of goodwill for the years ended March 31, 2022 and 2021:
Balance at beginning of year:
Goodwill
Accumulated goodwill impairment losses
Goodwill, net
Goodwill acquired during the year
Impairment losses
Balance at end of year:
Goodwill
Accumulated goodwill impairment losses
Goodwill, net
2022
2021
7,450,422
(79,631)
7,370,791
7,450,422
(79,631)
7,370,791
—
—
—
—
7,450,422
(79,631)
7,370,791
7,450,422
(79,631)
7,370,791
$
$
$
$
$
The Company performed an annual impairment test during the fourth quarters of fiscal 2022 and 2021 and determined
none of its recorded goodwill was impaired.
(6) Debt
Revolving Credit Facility
At March 31, 2022, the Company's senior notes payable consisted of a $685.0 million senior revolving credit facility,
which has an accordion feature permitting the maximum aggregate commitments to increase to $785.0 million provided
that certain conditions are met. At March 31, 2022, $397.0 million was outstanding under the 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 March 31, 2022. The letter of credit expires on December 31, 2022; 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 of 3.5%, with a minimum rate of 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
$1.3 million, $1.3 million, and $1.0 million for the years ended March 31, 2022, 2021, and 2020, respectively.
Borrowings under the revolving credit facility mature on June 7, 2024.
For the years ended March 31, 2022, 2021, and 2020 the Company’s effective interest rate, including the commitment fee,
was 5.0%, 5.8%, and 5.8% respectively, and the unused amount available under the revolver at March 31, 2022 was
$287.7 million.
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.
61
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 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 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 agreement's financial covenants include (i) a minimum consolidated net worth of $325.0 million on and
after December 31, 2020; (ii) a maximum ratio of total debt to consolidated adjusted net worth of 2.5 to 1.0; (iii) a
maximum collateral performance indicator of 24% as of the end of each calendar month; and (iv) a minimum fixed
charges coverage ratio as further discussed below.
As further discussed in Note 18, on May 3rd, 2022, the Company entered into the Seventh Amendment to its Amended
and Restated Revolving Credit Agreement (the “Seventh Amendment”) to, among other things, reduce the required ratio
for Net Income Available for Fixed Charges to Fixed Charges from 2.75 to 1.0 to 2.10 to 1.0 for each fiscal quarter from
March 31, 2022 to June 30, 2023, with the ratio increasing to 2.75 to 1.0 for each fiscal quarter thereafter.
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
these covenants at March 31, 2022 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 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, 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.
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.
Debt Maturities
As of March 31, 2022, the aggregate annual maturities of the Company's debt arrangements for each of the five fiscal
years subsequent to March 31, 2022 were as follows:
2023
2024
2025
2026
2027
Total future debt payments
—
—
396,972,746
—
300,000,000
696,972,746
$
$
62
(7)
Insurance and Other Income
Insurance and other income for the years ending March 31, 2022, 2021, and 2020 consist of:
Insurance revenue
Tax return preparation revenue
Auto club membership revenue
Other
Insurance and other income
2022
$ 56,270,249
21,698,851
14,758,783
3,993,083
$ 96,720,966
2021
44,214,454
18,098,087
7,863,145
4,244,079
74,419,765
2020
50,360,730
20,936,447
6,254,748
4,150,319
81,702,244
The Company has a wholly-owned, captive insurance subsidiary that reinsures a portion of the credit insurance sold in
connection with loans made by the Company. Certain coverages currently sold by the Company on behalf of the
unaffiliated insurance carrier are ceded by the carrier to the captive insurance subsidiary, providing the Company with an
additional source of income derived from the earned reinsurance premiums. Insurance premiums are ceded to the
reinsurance subsidiary as written and revenue is recognized over the life of the related insurance contracts. As of
March 31, 2022, 2021, and 2020, the amount of net written premiums by the reinsurance subsidiary were $9.8 million,
$5.9 million, and $6.6 million, respectively, and the amount of earned premiums were $7.6 million, $6.0 million, and $6.2
million, respectively.
The Company maintains a cash reserve for claims in an amount determined by the ceding company, and as of March 31,
2022 and 2021, the cash reserves were $6.4 million and $4.3 million, respectively.
(8) Non-filing Insurance
The Company maintains non-filing insurance coverage with an unaffiliated insurance company. The following is a
summary of the non-filing insurance activity for the years ended March 31, 2022, 2021, and 2020:
Insurance premiums written
Recoveries on claims paid
Claims paid
(9) Leases
2022
8,804,046
982,025
6,336,549
$
$
$
2021
7,072,647
959,620
5,223,484
2020
8,251,927
1,001,288
7,570,126
Accounting Policies and Matters Requiring Management's Judgment
The Company uses its effective annual interest rate as the discount rate when evaluating leases under Topic 842.
Management applies its effective annual interest rate to leases entered for the entirety of the subsequent year. For
example, fiscal 2021’s annual effective interest rate of 5.8% will be used in the determination of lease type as well as the
discount rate when calculating the present value of lease payments for all leases entered into in fiscal 2022 or until a new
annual effective interest rate is available for application.
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 operating leases consist of real estate leases for office space as well as office equipment. Both the branch
real estate and office equipment lease terms generally range from three years to five years, and generally contain options
to extend which mirror the original terms of the lease. The Company's finance leases consist of IT equipment which have
a three year lease term and do not contain an option to extend the lease term.
63
The following table reports information about the Company's lease costs for the years ended March 31, 2022, 2021, and
2020:
2022
2021
2020
Lease Cost
Finance lease cost
Amortization of right-of-use assets
Interest on lease liabilities
Operating lease cost
Short-term lease cost
Variable lease cost
Total lease cost
$
$
$
427,619 $
407,624
19,995
27,529,425 $
—
3,629,903
31,586,947 $
466,168 $
407,624
58,544
27,977,226 $
1,800
3,621,748
32,066,942 $
430,744
347,703
83,041
26,244,323
4,500
3,376,275
30,055,842
The following table reports other information about the Company's leases for the years ended March 31, 2022, 2021, and
2020:
2022
2021
2020
Other Lease Information
Cash paid for amounts included in the
measurement of lease liabilities
$
Operating cash flows from finance leases
Operating cash flows from operating
l
Financing cash flows from finance leases
Right-of-use assets obtained in exchange
for new finance lease liabilities
Right-of-use assets obtained in exchange
for new operating lease liabilities
Weighted-average remaining lease term —
finance leases
Weighted average remaining lease term —
operating leases
Weighted-average discount rate (monthly)
— finance leases
Weighted-average discount rate —
operating leases
$
$
27,936,317
$
28,211,828
$
19,994
27,411,037
505,286
58,544
27,559,260
594,024
26,212,843
83,041
25,618,886
510,916
—
$
—
$
753,736
15,381,953
$
12,482,167
$
36,826,045
0.4 years
7.3 years
6.0 %
6.1 %
0.8 years
7.3 years
6.4 %
6.3 %
The aggregate annual lease obligations as of fiscal year March 31, 2022, are as follows:
Operating
2023
2024
2025
2026
2027
Thereafter
Total undiscounted lease liability
Imputed interest
Total discounted lease liability
24,112,009
20,140,680
15,645,906
12,034,692
7,609,780
30,106,884
109,649,951
22,250,902
87,399,049
$
$
The Company had no leases with related parties as of fiscal year March 31, 2022 or 2021.
64
1.5 years
8.4 years
6.5 %
6.7 %
Finance
80,06
$
$
(10) Income Taxes
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted in response to the
COVID-19 pandemic. The CARES Act, among other things, expands current benefits of net operating losses and
increases the allowable business interest deduction under Section 163(j). The CARES Act did not have a material impact
on the Company's income tax position.
Income tax expense (benefit) consists of:
Year ended March 31, 2022
Federal
State and local
Year ended March 31, 2021
Federal
State and local
Year ended March 31, 2020
Federal
State and local
Current
Deferred
Total
$ 22,262,110
4,206,087
$ 26,468,197
(11,892,354)
(2,916,361)
(14,808,715)
10,369,756
1,289,726
11,659,482
$ 16,443,592
1,025,645
$ 17,469,237
4,077,609
1,573,753
5,651,362
20,521,201
2,599,398
23,120,599
$
$
3,307,872
2,871,179
6,179,051
(224,604)
797,518
572,914
3,083,268
3,668,697
6,751,965
The differences between income taxes expected at the U.S. federal statutory income tax rate of 21% and the reported
income tax expense for March 31, 2022, 2021 and 2020 are summarized as follows:
2022
2021
$ 13,771,657 23,394,720
2020
7,330,983
1,489,800
(1,193,021)
(470,916)
(555,252)
2,866
1,918,618
(3,237,682)
(51,728)
(14,860)
2,053,524
(1,173,435)
—
(2,107,263)
8,274
1,203,203
(996,769)
(30,953)
769,298
$ 11,659,482 23,120,599
3,398,271
(7,616,236)
(500,000)
(167,455)
4,562,830
1,305,975
(612,987)
(672,358)
(277,058)
6,751,965
Expected income tax
Increase (reduction) in income taxes resulting from:
State tax (excluding state tax credits), net of federal benefit
Federal tax credits (net)
State tax credits
Uncertain tax positions
Nondeductible penalties
Executive compensation limitation under Section 162(m)
Excess tax benefits related to equity compensation
Prior year adjustments
Other, net
65
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax
liabilities at March 31, 2022 and 2021 are presented below:
Deferred tax assets:
Allowance for credit losses
Unearned insurance commissions
Accrued expenses primarily related to employee benefits
Reserve for uncollectible interest
Lease liability
Intangible assets
Foreign tax credit carryforward
Capital loss carryforward
State net operating loss carryforwards
Gross deferred tax assets
Less valuation allowance
Net deferred tax assets
Deferred tax liabilities:
Fair value adjustment for loans receivable
Property and equipment
Intangible assets
Deferred net loan origination costs
Prepaid expenses
Right-of-use asset
Other
Gross deferred tax liabilities
2022
2021
$ 33,481,188
15,453,501
12,549,474
1,261,035
21,575,596
254,986
3,254,926
7,966,326
3,849,158
99,646,190
(14,723,244)
84,922,946
22,908,670
10,080,766
13,676,701
645,113
22,231,591
—
3,254,926
7,928,184
78,358
80,804,309
(11,184,384)
69,619,925
(13,896,840)
(4,875,859)
—
(1,708,369)
(1,785,906)
(21,273,281)
(1,581,234)
(45,121,489)
(12,362,590)
(5,902,421)
(243,574)
(1,268,653)
(1,412,337)
(21,826,178)
(1,611,430)
(44,627,183)
Deferred income taxes, net
$ 39,801,457
24,992,742
At March 31, 2022, the Company had state net operating loss carryforwards of approximately $63.8 million. A deferred
tax asset of approximately $3.8 million has been recorded to reflect the benefit of these losses. Of this $3.8 million,
$0.3 million is expected to be recognized. Approximately $1,000 of the state net operating loss carryforward will expire
in 2025 with the remaining carryforward expiring between 2031 and 2040.
The valuation allowance for deferred tax assets increased by $3.5 million for the year ended March 31, 2022 when
compared to March 31, 2021. The valuation allowance at March 31, 2022 and 2021 was $14.7 million and $11.2 million,
respectively. The valuation allowance against the total deferred tax assets as of March 31, 2022 consisted of $3.5 million
from state net operating loss carryforwards in the amount of $55.4 million which expire from 2025 to 2040, a foreign tax
credit carryforward of $3.3 million arising in relation to the Section 965 calculation ("Transition Tax") during fiscal 2018
which expires in 2028, $7.7 million related to the $37.0 million capital loss carryforward from the sale of the Mexican
operations in fiscal 2019 which expires in 2024 and $0.2 million related to the $0.9 million capital loss on the sale of the
former headquarters buildings which expire from 2026 to 2027. The Company does not expect to generate enough
foreign source income, state taxable income in the respective jurisdictions or capital gains in future tax years to realize
these tax attributes. In assessing the realizability of deferred tax assets, management considers whether it is more likely
than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax
assets is dependent upon the generation of future taxable income during the periods in which those temporary differences
become deductible. In order to fully realize the deferred tax asset, the Company will need to generate future taxable
income of the appropriate character prior to the expiration of the deferred tax assets governed by the tax code.
As of March 31, 2022, 2021, and 2020, the Company had $2.2 million, $3.1 million, and $5.8 million of total gross
unrecognized tax benefits including interest, respectively. Of these totals, approximately $2.0 million, $2.6 million, and
$5.2 million, respectively, represents the amount of net unrecognized tax benefits that are permanent in nature and, if
recognized, would affect the annual effective tax rate.
66
A reconciliation of the beginning and ending amount of unrecognized tax benefits at March 31, 2022, 2021, and 2020 are
presented below:
Unrecognized tax benefit balance beginning of year
Gross increases for tax positions of current year
Gross increases (decreases) for tax positions of prior years
Settlements with tax authorities
Lapse of statute of limitations
Unrecognized tax benefit balance end of year
2022
2020
2021
$ 1,811,244 4,351,811 4,043,623
246,725
786,674
—
(725,211)
$ 1,616,116 1,811,244 4,351,811
36,541
153,754
—
—
— (1,968,702)
(608,406)
(348,882)
At March 31, 2022, approximately $1.3 million of gross unrecognized tax benefits are expected to be resolved during the
next 12 months through settlements with taxing authorities or the expiration of the statute of limitations. The Company’s
continuing practice is to recognize interest and penalties related to income tax matters in income tax expense. As of
March 31, 2022, 2021, and 2020, the Company had $0.6 million, $1.2 million, and $1.4 million accrued for gross interest,
respectively, of which $0.2 million, $0.3 million, and $(0.1) million represented the current period expense for the periods
ended March 31, 2022, 2021, and 2020.
The Company is subject to U.S. income tax, 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 2017, although carryforward attributes that were generated prior to 2017 may still be adjusted
upon examination by the taxing authorities if they either have been or will be used in a future period.
(11) Earnings Per Share
The following is a reconciliation of the numerators and denominators of the basic and diluted EPS calculations:
For the year ended March 31, 2022
Shares
(Denominator)
Income
(Numerator)
Per Share
Amount
Basic EPS
Net income available to common shareholders
$ 53,919,837
6,072,170 $
8.88
Effect of dilutive securities options and restricted stock
—
291,896
Diluted EPS
Net income available to common shareholders including dilutive
securities
$ 53,919,837
6,364,066 $
8.47
For the year ended March 31, 2021
Shares
(Denominator)
Income
(Numerator)
Per Share
Amount
Basic EPS
Net income available to common shareholders
$ 88,282,828
6,493,898 $
13.59
Effect of dilutive securities options and restricted stock
—
178,212
Diluted EPS
Net income available to common shareholders including dilutive
securities
$ 88,282,828
6,672,110 $
13.23
67
For the year ended March 31, 2020
Shares
(Denominator)
Income
(Numerator)
Per Share
Amount
Basic EPS
Net income available to common shareholders
$ 28,157,478
7,688,242 $
3.66
Effect of dilutive securities options and restricted stock
—
264,658
Diluted EPS
Net income available to common shareholders including dilutive
securities
$ 28,157,478
7,952,900 $
3.54
Options to purchase 412,015, 608,087, and 656,347 shares of common stock at various prices were outstanding during the
years ended March 31, 2022, 2021, and 2020, respectively, but were not included in the computation of diluted EPS
because the option exercise price was antidilutive.
(12) Benefit Plans
Retirement Plan
The Company provides a defined contribution employee benefit plan (401(k) plan) covering full-time employees,
whereby employees can invest up to the maximum designated for that year. The Company matches 50% of each
employee's contributions up to the first 6% of the employee's eligible compensation, providing a maximum employer
contribution of 3% of compensation. The Company's expense under this plan was $1.8 million, $1.6 million, and $1.6
million, for the years ended March 31, 2022, 2021, and 2020, respectively.
Supplemental Executive Retirement Plan
The Company has instituted two supplemental executive retirement plans, which are non-qualified executive benefit plans
in which the Company agrees to pay certain executives additional benefits in the future, usually at retirement, in return for
continued employment by the executives. The SERPs are unfunded plans, and, as such, there are no specific assets set
aside by the Company in connection with the establishment of the plans. The executives have no rights under the
agreements beyond those of a general creditor of the Company. For the years ended March 31, 2022, 2021, and 2020,
contributions of $0.5 million, $0.6 million, and $0.6 million, respectively, were charged to expense related to the SERP.
The unfunded liability, which is included as a component of accounts payable and accrued expenses in the Company's
Consolidated Balance Sheets was $5.9 million and $6.4 million as of March 31, 2022 and 2021, respectively.
For the three years presented, the unfunded liability was estimated using the following assumptions: an annual salary
increase of 3.5% for all 3 years; a discount rate of 6.0% for all 3 years; and a retirement age of 65.
Executive Deferred Compensation Plan
The Company has an Executive Deferral Plan. Eligible executives and directors may elect to defer all or a portion of their
incentive compensation to be paid under the Executive Deferral Plan. As of March 31, 2022 and 2021 no executive or
director had deferred any compensation under this plan.
Stock Incentive Plans
The Company has a 2008 Stock Option Plan, a 2011 Stock Option Plan, and a 2017 Stock Incentive Plan for the benefit of
certain directors, officers, and key employees. Under these plans, a total of 3,350,000 shares of authorized common stock
have been reserved for issuance pursuant to grants approved by the Compensation Committee. Stock options granted
under these plans have a maximum duration of ten 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 March 31, 2022 there were a total of 105,660 shares of
common stock available for grant under the plans.
68
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 seeks to motivate and reward certain employees and to align management’s interest with shareholders’ 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 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
$16.35
$20.45
Restricted Stock Eligible for Vesting
(Percentage of Award)
40%
60%
The Restricted Stock awards will vest in six 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 will vest in six 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 shall have a 10-year term.
The Performance Options shall 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 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 shall 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
$25.30
Options Eligible for Vesting
(Percentage of Award)
100%
69
Stock Options
The weighted-average fair value at the grant date for options issued during the years ended March 31, 2022, 2021, and
2020 was $99.14, $58.48, and $57.69 per share, respectively. This fair value was estimated at grant date using the
weighted-average assumptions listed below.
Dividend yield
Expected volatility
Average risk-free interest rate
Expected life
2022
0 %
57.82 %
1.02 %
6.0 years
2021
0 %
57.53 %
0.59 %
6.3 years
2020
0 %
52.28 %
1.58 %
6.3 years
The expected stock price volatility is based on the historical volatility of the Company’s 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 year ended March 31, 2022 was as follows:
Options outstanding, beginning of year
Granted
Exercised
Forfeited
Expired
Options outstanding, end of period
Options exercisable, end of period
Shares
$
500,168
22,255
(154,699)
(19,158)
—
348,566 (1) $
101,029
$
Weighted
Average
Exercise
Price
Weighted
Average
Remaining
Contractual
Term
Aggregate
Intrinsic
Value
93.89
184.76
82.78
99.25
—
104.33
89.77
6.43 $ 30,551,741
4.76 $ 10,312,456
(1) Of the 348,566 options outstanding, 126,853 are not yet exercisable based solely on fulfilling a service condition and
another 120,684 are not yet exercisable based solely on fulfilling the performance condition described further above.
The aggregate intrinsic value reflected in the table above represents the total pre-tax intrinsic value (the difference between
the closing stock price on March 31, 2022 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 March 31, 2022. This
amount will change as the stock's market price changes. The total intrinsic value of options exercised during the years
ended March 31, 2022, 2021, and 2020 was as follows:
2022
$17,494,865
2021
$9,996,167
2020
$5,083,094
As of March 31, 2022, total unrecognized stock-based compensation expense related to non-vested stock options amounted
to approximately $6.1 million, which is expected to be recognized over a weighted-average period of approximately 2.3
years.
Restricted Stock
During fiscal 2022, the Company granted 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 $188.38 per share.
During fiscal 2021, the Company granted 52,735 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 $106.28 per share.
70
During fiscal 2020, the Company granted 11,223 shares of restricted stock (which are equity classified) to certain executive
officers, with a grant date weighted average fair value of $90.23 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 $14.1 million, $15.5
million, and $23.4 million for the years ended March 31, 2022, 2021, and 2020, respectively, which is included as a
component of general and administrative expenses in the Company's Consolidated Statements of Operations.
As of March 31, 2022, there was approximately $13.9 million of unrecognized compensation cost related to unvested
restricted stock awards, which is expected to be recognized over the next 1.7 years based on current estimates.
A summary of the status of the Company’s restricted stock as of March 31, 2022 and changes during the year ended March
31, 2022, are presented below:
Outstanding at March 31, 2021
Granted during the period
Vested during the period
Forfeited during the period
Outstanding at March 31, 2022
Total Stock-Based Compensation
Shares
Weighted Average Fair
Value at Grant Date
614,739 $
4,062
(66,299)
—
552,502 $
101.99
188.38
102.93
—
102.51
Total stock-based compensation included as a component of net income during the years ended March 31, 2022, 2021, and
2020 was as follows:
Stock-based compensation related to equity classified units:
Stock-based compensation related to stock options
Stock-based compensation related to restricted stock
Total stock-based compensation related to equity classified awards
2022
2021
2020
$
3,473,913
3,804,674
14,109,082 15,476,604
$ 17,582,995 19,281,278
5,522,883
23,429,278
28,952,161
(13) Acquisitions
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 an asset purchase.
71
The following table sets forth the acquisition activity of the Company for the years ended March 31, 2022, 2021, and
2020:
2022
2021
2020
Number of branches acquired through business combinations
Number of asset purchases
Total acquisitions
—
50
50
—
50
50
38
140
178
Purchase price
Tangible assets:
Loans receivable, net
Property and equipment
Excess of purchase prices over fair value of net tangible assets
Customer lists
Non-compete agreements
Goodwill
$ 10,859,984 $ 19,774,252 $ 61,555,973
9,631,112
—
9,631,112
15,210,973
—
15,210,973
47,026,694
74,000
47,100,694
1,228,872 $
4,563,279 $ 14,455,279
952,872 $
276,000
—
4,365,779 $ 13,228,951
890,000
336,328
197,500
—
$
$
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 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 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 the fair value.
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 customer list allocated to an office 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.
72
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.
(14) Fair Value
Fair Value Disclosures
The Company may carry certain financial instruments and derivative assets and liabilities at fair value 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 determines 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 for the periods reported consist of the following: cash and cash equivalents, loans
receivable, the senior notes payable, and the senior unsecured notes payable. Loans receivable are originated at prevailing
market rates and have an average life of approximately 8 months. Given the short-term nature of these loans, they are
continually repriced at current market rates. The Company’s senior notes payable 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 considered its creditworthiness in its
determination of fair value.
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.
March 31, 2022
March 31, 2021
Input Level Carrying Value
Estimated Fair
Value
Carrying Value
Estimated Fair
Value
ASSETS
Cash and cash equivalents
Loans receivable, net
LIABILITIES
Senior unsecured notes
Senior notes payable
bl
1
3
2
3
$
19,236,322 $
985,515,154
19,236,322 $
985,515,154
15,746,454 $
733,659,389
15,746,454
733,659,389
300,000,000
396,972,746
264,639,000
396,972,746
—
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:
March 31, 2022
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
73
The Company re-valued its corporate headquarters in Greenville, SC as of March 31, 2020 in conjunction with its
reclassification of the related assets as held for sale. The revaluation resulted in an impairment loss of approximately
$251,000, which is included as a component of Other Expense in the Company's Consolidated Statements of Operations.
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 March 31, 2022
and 2021.
(15) Quarterly Information (Unaudited)
The following sets forth selected quarterly operating data:
Fiscal 2022
Fiscal 2021
First
Second Third
Fourth
First
Second Third
Fourth
(Dollars in thousands, except for earnings per share data)
$ 129,659 137,827 148,572 166,329 123,867 124,441 130,946 146,280
30,266 42,044 56,459 57,439 25,661 26,090 28,857
5,636
73,351 74,989 74,229 74,607 71,608 75,293 77,875 77,411
7,305
6,940
2,418 11,409
7,327 18,382 15,509 13,398 14,491 44,884
6,714 10,166 11,044
4,857
391
1,641
$ 15,771 12,439
5,893
3,767
5,501
4,770
5,562
5,527
$
$
2.56
2.44
2.04
1.94
1.20
1.14
3.10
2.97
2.26
2.24
2.01
1.96
2.32
2.25
7.25
6.96
Total revenues
Provision for credit
losses
General and
administrative expenses
Interest expense
Income tax expense
Net income
Net income per common
share:
Basic
Diluted
The Company's highest loan demand occurs generally 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. Consequently, the
Company experiences significant seasonal fluctuations in its operating results and cash needs. Operating results from 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.
(16) Commitments and Contingencies
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 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.
74
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. For these reasons, we are currently unable to predict the
ultimate timing or outcome of, or reasonably estimate the possible losses or a range of possible losses resulting from, any
currently pending claims. Based on information currently available, the Company does not believe that any reasonably
probable losses arising from currently pending legal matters will be material to the Company’s results of operations or
financial conditions. However, in light of the inherent uncertainties involved in such matters, 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.
(17) 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 of the three buildings held for sale,
resulting in an aggregate loss of $37.0 thousand. The loss on sale of assets held for sale is included as a component of
Insurance and other income, net in the Company's Consolidated Statement of Operations. During the second quarter of
fiscal 2022 the Company completed the sale of the last held for sale building, and recorded $39.0 thousand loss on sale
which is included as a component of Insurance and other income, net in the Consolidated Statements of Operations.
The following table reconciles the major classes of assets held for sale to the amounts presented in the Consolidated
Balance Sheets:
Assets held for sale:
Property and equipment, net
Total assets held for sale
(18) Subsequent Events
March 31, 2022
March 31, 2021
$
$
— $
— $
1,143,528
1,143,528
Seventh Amendment to Amended and Restated Revolving Credit Facility
On May 3rd, 2022, the Company entered into the Seventh Amendment among the Company, the lenders named therein, and
Wells Fargo Bank, National Association, as Administrative Agent and Collateral Agent. The Seventh Amendment amends its
Amended and Restated Revolving Credit Agreement to, among other things:
• Reduce the required ratio for Net Income Available for Fixed Charges to Fixed Charges to 2.10 to 1.0 for the fiscal
quarters ending March 31, 2022, June 30, 2022, September 30, 2022, December 31, 2022, March 31, 2023 and June
30, 2023, with the ratio increasing to 2.75 to 1.0 for each fiscal quarter thereafter.
• Allow the Company to form up to two SPV Subsidiaries for purposes of an anticipated warehouse facility or
securitization.
• Transition from a benchmark rate of 1-month LIBOR to a term rate based on SOFR.
75
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
We are responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a –
15(f) under the Securities Exchange Act of 1934. We have assessed the effectiveness of internal control over financial reporting
as of March 31, 2022. Our assessment was based on criteria established in the Internal Control – Integrated Framework (2013)
issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles. Our internal control over financial reporting includes those policies and procedures that:
(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect our transactions and
dispositions of our assets;
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in
accordance with authorizations of our management and board of directors; and
(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of
our assets that could have a material effect on our financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, any
assumptions regarding internal control over financial reporting in future periods based on an evaluation of effectiveness in a
prior period are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
Based on using the COSO criteria, we believe our internal control over financial reporting as of March 31, 2022 was effective.
Our independent registered public accounting firm has audited the Consolidated Financial Statements included in this Annual
Report and has issued an attestation report on the effectiveness of our internal control over financial reporting, as stated in their
report.
By: /s/ R. Chad Prashad
R. Chad Prashad
President and Chief Executive Officer
Date: May 26, 2022
By: /s/ John L. Calmes, Jr.
John L. Calmes, Jr.
Executive Vice President and Chief Financial and
Strategy Officer
Date: May 26, 2022
76
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of World Acceptance Corporation and subsidiaries
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of World Acceptance Corporation and its subsidiaries (the
Company) as of March 31, 2022 and 2021, the related consolidated statements of operations, comprehensive income,
shareholders' equity and cash flows for each of the three years in the period ended March 31, 2022, and the related notes to
the consolidated financial statements (collectively, the financial statements). In our opinion, the financial statements present
fairly, in all material respects, the financial position of the Company as of March 31, 2022 and 2021, and the results of its
operations and its cash flows for each of the three years in the period ended March 31, 2022, in conformity with accounting
principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States) (PCAOB), the Company's internal control over financial reporting as of March 31, 2022, based on criteria
established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission in 2013, and our report dated May 26, 2022 expressed an unqualified opinion on the effectiveness of
the Company's internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion
on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and
are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform
the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether
due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also
included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the
overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that
was communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that
are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The
communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole,
and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or
on the accounts or disclosures to which it relates.
Allowance for Credit Losses
As described in Notes 1 and 2 to the Consolidated Financial Statements, the Company established an allowance for credit
losses of $134.2 million as of March 31, 2022, which was estimated using the Company’s current expected credit loss
(CECL) model. The Company’s CECL model estimates the allowance for credit losses for each Customer Tenure bucket
using a historical migration analysis for the twelve most recent historical twelve-month migration periods, adjusted for
seasonality. The Company’s CECL model also includes a reserve at 100% of the outstanding balance of all loans greater than
90 days past due on a recency basis and not written off as of the reporting date, net of a calculated Rehab Rate. Management
considers whether current credit and economic 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 (qualitative factors). Management also utilizes a reasonable and supportable forecast 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. Management utilized significant judgment in
evaluating reasonable and supportable forecasts and qualitative factors.
We identified the Company’s allowance for credit losses as a critical audit matter as auditing management’s judgments in
evaluating reasonable and supportable forecasts and qualitative factors regarding the allowance for credit losses required a
high degree of auditor judgment and increased extent of audit effort.
Our audit procedures related to the Company’s allowance for credit losses included the following, among others:
a. We obtained an understanding of the relevant controls related to the allowance for credit losses, and tested such
controls for design and operating effectiveness, including those controls over (a) validation of data within the CECL
model and (b) the management review and approval of the computed allowance for credit losses including the
assessment of reasonable and supportable forecasts and qualitative factors.
b. We tested the completeness and accuracy of data inputs into the CECL model by comparing to internal data sources.
c. We evaluated reasonable and supportable forecasts and qualitative factors, including customer tenure loss rate trends
and delinquency, for reasonableness by comparing to internal source data.
d. We tested management’s historical loss rates by customer tenure and loan type by recalculating customer tenure for
a sample of charge-offs to ensure they had the correct customer tenure classification within the CECL model, which
impacted both the CECL model calculation and the reasonable and supportable forecasts used.
/s/ RSM US LLP
We have served as the Company's auditor since 2014.
Raleigh, North Carolina
May 26, 2022
77
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of World Acceptance Corporation and subsidiaries
Opinion on the Internal Control Over Financial Reporting
We have audited World Acceptance Corporation and subsidiaries’ (the Company) internal control over financial reporting as
of March 31, 2022, based on criteria established in Internal Control — Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission in 2013. In our opinion, the Company maintained, in all material
respects, effective internal control over financial reporting as of March 31, 2022, based on criteria established in Internal
Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in
2013.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the consolidated balance sheets of the Company as of March 31, 2022 and 2021 and the related consolidated
statements of operations, shareholders’ equity, and cash flows for each of the three years in the period ended March 31, 2022,
and our report dated May 26, 2022 expressed an unqualified opinion.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting in the accompanying Management’s Report on
Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over
financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be
independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in
all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the
risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control
based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the
circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the Company are being made only in accordance with authorizations of management and directors of the
Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or
disposition of the Company's assets that could have a material effect on the consolidated financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ RSM US LLP
Raleigh, North Carolina
May 26, 2022
78
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
The Company had no disagreements on accounting or financial disclosure matters with its independent registered public
accounting firm to report under this Item 9.
Item 9A.
Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Based on management’s evaluation (with the participation of our principal executive officer and principal financial officer, as
of the end of the period covered by this report, our principal executive officer and principal financial officer 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.
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.
Management Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined
in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) to provide reasonable assurance regarding the reliability of our
financial reporting and the preparation of financial statements for external purposes in accordance with GAAP.
Management assessed our internal control over financial reporting as of March 31, 2022, the end of our fiscal year.
Management based its assessment on criteria established in the Internal Control-Integrated Framework (2013) issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). Management’s assessment included
evaluation of elements such as the design and operating effectiveness of key financial reporting controls, process
documentation, accounting policies, and our overall control environment.
Based on our assessment, management has concluded that our internal control over financial reporting was effective as of the
end of the fiscal year to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external reporting purposes in accordance with GAAP. Management’s Report on Internal Control
over Financial Reporting is included in Part II, Item 8 of this Form 10-K. We reviewed the results of management’s
assessment with the Audit Compliance Committee of our Board of Directors.
Attestation Report of Public Accounting Firm
Our independent registered public accounting firm, RSM US LLP, independently assessed the effectiveness of the Company’s
internal control over financial reporting. RSM US LLP has issued an attestation report concurring with management’s
assessment, which is included at the end of Part II, Item 8 of this Form 10-K.
Inherent Limitations on Effectiveness of Controls
Our management, including the principal executive officer and principal financial officer, does not expect that our disclosure
controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control
system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control
system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and
the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control
systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or
that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that
judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can
also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override
79
of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future
events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future
conditions. Projections of any evaluation of the effectiveness of controls to future periods are subject to risks. Over time,
controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies
or procedures.
Item 9B. Other Information
None.
Item 9C.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not Applicable.
PART III.
Item 10.
Directors, Executive Officers and Corporate Governance
Information contained under the captions “Proposal 1 - Election of Directors,” “Corporate Governance,” and “Delinquent
Section 16(a) Reports” in the Proxy Statement is incorporated herein by reference in response to this Item 10. The
information in response to this Item 10 regarding the executive officers of the Company is contained in Item 1, Part I hereof
under the caption “Information about our Executive Officers.”
Item 11.
Executive Compensation
Information contained under the captions “Corporate Governance,” “Executive Compensation,” “Director Compensation,”
and “Compensation Discussion and Analysis” in the Proxy Statement is incorporated herein by reference in response to this
Item 11. The “Report of the Compensation Committee” in the Proxy Statement, which shall be deemed furnished, but not
filed herewith, is incorporated herein by reference in response to this Item 11.
Item 12.
Security Ownership of Certain Beneficial Owners, Management and Related Stockholder Matters
Information contained under the captions “Security Ownership of Certain Beneficial Owners and Management” and “Equity
Compensation Plan Information” in the Proxy Statement is incorporated by reference herein in response to this Item 12.
For additional information on our stock option plans, see Note 12 in the Notes to Consolidated Financial Statements for the
year ended March 31, 2022.
Item 13. Certain Relationships and Related Transactions and Director Independence
Information contained under the captions “Certain Relationships and Related Person Transactions” and “Corporate
Governance” in the Proxy Statement is incorporated by reference in response to this Item 13.
Item 14.
Principal Accountant Fees and Services
Information contained under the proposal captioned "Ratification of Appointment of Independent Registered Public
Accounting Firm” in the Proxy Statement is incorporated by reference in response to this Item 14.
80
PART IV.
Item 15.
Exhibits and Financial Statement Schedules
(a)(1) The following Consolidated Financial Statements of the Company and Report of Independent Registered
Public Accounting Firm are filed as part of this Annual Report under Item 8.
Consolidated Financial Statements:
Consolidated Balance Sheets at March 31, 2022 and 2021
Consolidated Statements of Operations for the fiscal years ended March 31, 2022, 2021, and 2020
Consolidated Statements of Shareholders' Equity for the fiscal years ended March 31, 2022, 2021, and 2020
Consolidated Statements of Cash Flows for the fiscal years ended March 31, 2022, 2021, and 2020
Notes to Consolidated Financial Statements
Reports of Independent Registered Public Accounting Firm (PCAOB ID: 49)
(a)(2) Financial Statement Schedules
All schedules for which provision is made in the applicable accounting regulations of the SEC are not required
under the related instructions, are inapplicable, or the required information is included elsewhere in the Consolidated
Financial Statements.
(a)(3) Exhibits
The list of exhibits filed as a part of this Form 10-K is set forth on the Exhibit Index immediately preceding the signatures to
this Form 10-K and is incorporated by reference in this Item 15(a)(3).
(b)
Exhibits
The exhibits listed in the accompanying Exhibit Index are filed as a part of this Annual Report on Form 10-K.
(c)
Separate Financial Statements and Schedules
Financial statement schedules have been omitted since the required information is included in our Consolidated Financial
Statements contained in Item 8 of this Annual Report on Form 10-K.
Item 16.
Form 10-K Summary
None.
81
Pursuant to the requirements of Section 13 or 15(d) 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.
SIGNATURES
WORLD ACCEPTANCE CORPORATION
By: /s/ R. Chad Prashad
R. Chad Prashad
President and Chief Executive Officer
Date: May 26, 2022
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on
behalf of the registrant and in the capacities and on the dates indicated.
/s/ R. Chad Prashad
R. Chad Prashad
President, Chief Executive Officer and Director
Signing on behalf of the registrant and as principal
executive officer
/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: May 26, 2022
Date: May 26, 2022
/s/ Scott McIntyre
Scott McIntyre
Senior Vice President of Accounting
Signing on behalf of the registrant and as principal
accounting officer
Date: May 26, 2022
/s/ Ken R. Bramlett, Jr.
Ken R. Bramlett, Jr.
Chairman of the Board of Directors and a Director
/s/ Scott J. Vassalluzzo
Scott J. Vassalluzzo
Director
Date: May 26, 2022
Date: May 26, 2022
/s/ Charles D. Way
Charles D. Way
Director
/s/ Beth Neuhoff
Beth Nuehoff
Director
/s/ Darrell Whitaker
Darrell Whitaker
Director
Date: May 26, 2022
Date: May 26, 2022
/s/ Benjamin Robinson
Benjamin Robinson
Director
Date: May 26, 2022
Date: May 26, 2022
82
BOARD OF DIRECTORS
Ken R. Bramlett Jr.
Private Investor
Elizabeth R. Neuhoff
President and CEO
Neuhoff Communications
R. Chad Prashad
President and Chief Executive Officer
World Acceptance Corporation
Benjamin E. Robinson, III
Private Investor
CORPORATE OFFICERS
R. Chad Prashad
President and Chief Executive Officer
John L. Calmes, Jr.
Executive Vice President, Chief Financial and
Strategy Officer and Treasurer
D. Clinton Dyer
Executive Vice President,
Chief Branch Operations Officer
Luke J. Umstetter
Senior Vice President, General Counsel,
Chief Compliance Officer and Secretary
Scott J. Vassalluzzo
Managing Member
Prescott General Partners, LLC
Charles D. Way
Private Investor
Darrell E. Whitaker
President and Chief Operating Officer
IMI Resort Holdings, Inc.
Zachary W. Denton
Vice President, Predictive Analytics
Katie Deuben
Deputy General Counsel
Robert D. Edwards
Vice President, Operations Performance
Brian D. Hoff
Vice President, IT Business Applications
Keith T. Littrell
Vice President, Tax and Assistant Secretary
Scott McIntyre
Senior Vice President, Accounting
Ryan Phillips
Vice President, Strategic Business Development
A. Lindsay Caulder
Senior Vice President, Human Resources
Thomas M. Wagner, Jr.
Vice President, Customer Success
Jason E. Childers
Senior Vice President, Information Technology
Rodney D. Ernest
Senior Vice President of Operations
Victoria G. Hammond
Senior Vice President, Marketing
Jeff L. Tinney
Senior Vice President of Operations
Chris M. Simonetti
Senior Vice President, Strategy and Analytics
Jackie C. Willyard
Senior Vice President of Operations
Denise Bice
Vice President, Strategic Initiatives
and Special Projects
83
Common Stock
Executive Offices
World Acceptance Corporation’s common stock trades on
the Nasdaq Global Select Market under the symbol: WRLD.
As of July 6, 2022, there were 24 shareholders of record and
the Company believes there are a significant number of
persons or entities who hold their stock in nominee or
“street” names through various brokerage firms. On this
date, there were 6,280,721 shares of common stock
outstanding.
The table below reflects the stock prices published by
Nasdaq by quarter for the last two fiscal years. The last
reported sales price on July 6, 2022, was $108.78.
World Acceptance Corporation
Post Office Box 6429 (29606)
104 South Main Street, Suite 400 (29601)
Greenville, South Carolina
(864) 298-9800
Transfer Agent
American Stock Transfer & Trust Company
6201 15th Avenue
Brooklyn, New York 11219
(718) 921-8200
Market Price of Common Stock
Fiscal 2022
Quarter
First
Second
Third
Fourth
Fiscal 2021
Quarter
First
Second
Third
Fourth
High
Low
$
175.00
$
123.17
209.00
265.00
243.00
156.92
150.26
162.89
High
Low
$
82.12
$
43.16
106.94
124.02
170.98
60.95
82.44
100.71
The Company has never paid a dividend on its Common
Stock. The Company presently intends to retain its earnings
to finance the growth and development of its business and
does not expect to pay cash dividends in the foreseeable
future. The Company’s debt agreements also contain certain
limitations on the Company’s ability to pay dividends.
Legal Counsel
Alston & Bird, LLP
The Atlantic Building
950 F Street, NW
Washington, DC 20004-1404
Independent Registered
Public Accounting Firm
RSM US LLP
5444 Wade Park Blvd, Suite 350
Raleigh, NC 27607
Annual Report on Form 10-K
A copy of the Company’s Annual Report on Form 10-K, as
filed with the Securities and Exchange Commission
(“SEC”), may be obtained without charge by writing to the
Corporate Secretary at the executive offices of the
Company, or may be viewed at the SEC’s website
(SEC.gov). In addition to the copy contained herein, the
Form 10-K can also be reviewed or downloaded from the
Company’s website: http://www.loansbyworld.com.
For Further Information
Secretary and General Counsel
World Acceptance Corporation
legal@worldacceptance.com
(864) 298-9800
84