What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-05-27 compared with 2021-06-02 · 291 added, 326 removed, 852 unchanged (42% of the section changed)

6 unchanged sentences

Loans receivable, net 985,515,154 733,659,389

Right-of-use asset 90,055,572 101,686,918

Operating lease right‐of‐use assets, net 85,631,304 90,055,572

Finance lease right‐of‐use assets, net 607,512 1,013,901

Property and equipment, net 24,476,231 25,326,136

7 unchanged sentences

Senior notes payable $ 396,972,746 $ 405,007,500

Senior unsecured notes payable, net 295,393,991 —

Income taxes payable 7,384,169 11,575,861

Lease liability 91,718,075 102,759,386

Operating lease liability 87,399,049 91,132,722

Finance lease liability 80,067 585,353

Accounts payable and accrued expenses 58,042,139 41,040,287

10 unchanged sentences

See accompanying notes to Consolidated Financial Statements.

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CONSOLIDATED STATEMENTS OF OPERATIONS

1 unchanged sentence

2022 2021 2020

Continuing operations

Interest and fee income $ 485,666,579 $ 451,113,502 $ 508,326,771

Insurance income, net and other income 74,419,765 81,702,244 75,388,648

Insurance and other income, net 96,720,966 74,419,765 81,702,244

Total revenues 582,387,545 525,533,267 590,029,015

9 unchanged sentences

Total expenses 516,808,226 414,129,840 555,119,572

Income from continuing operations before income taxes 111,403,427 34,909,443 89,878,572

Income before income taxes 65,579,319 111,403,427 34,909,443

Income taxes 11,659,482 23,120,599 6,751,965

Income from continuing operations 88,282,828 28,157,478 73,897,515

Discontinued operations (Note 18)

Income from discontinued operations before disposal of discontinued operations and income taxes — — 2,341,825

Loss on disposal of discontinued operations — — ( 38,377,623 )

Income taxes (benefit) — — 626,583

Income (loss) from discontinued operations — — ( 36,662,381 )

Net income $ 53,919,837 $ 88,282,828 $ 28,157,478

Net income per common share from continuing operations:

Basic $ 13.59 $ 3.66 $ 8.22

Diluted $ 13.23 $ 3.54 $ 8.03

Net income (loss) per common share from discontinued operations:

Basic $ — $ — $ ( 4.08 )

Diluted $ — $ — $ ( 3.98 )

Net income per common share:

1 unchanged sentence

Diluted $ 8.47 $ 13.23 $ 3.54

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Weighted average common shares outstanding:

2 unchanged sentences

See accompanying notes to Consolidated Financial Statements.

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Years Ended March 31,

2021 2020 2019

Net income $ 88,282,828 28,157,478 37,235,134

Foreign currency translation adjustments — — ( 5,235,838 )

Reclassification of cumulative foreign currency translation adjustments due to sale of Mexico business — — 31,290,918

Comprehensive income $ 88,282,828 28,157,478 63,290,214

See accompanying notes to Consolidated Financial Statements.

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CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

Year ended March 31, 2022

Shares Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss, net Total Shareholders' Equity

Shares Additional Paid-in Capital Retained Earnings Total Shareholders' Equity

Balances at March 31, 2021 6,805,294 $ 255,590,674 149,336,767 404,927,441

4 unchanged sentences

Stock option expense — 3,473,913 — 3,473,913

Cumulative effect of adoption of ASC 326 — — ( 21,242,249 ) — ( 21,242,249 )

Net income — — 53,919,837 53,919,837

1 unchanged sentence

Year ended March 31, 2021

Shares Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss, net Total Shareholders' Equity

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

4 unchanged sentences

Stock option expense — 3,804,674 — 3,804,674

Cumulative effect of adoption of ASC 326 — — ( 21,242,249 ) ( 21,242,249 )

Net income — — 88,282,828 88,282,828

Balances at March 31, 2021 6,805,294 $ 255,590,674 149,336,767 404,927,441

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Year ended March 31, 2020

Shares Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss, net Total Shareholders' Equity

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

4 unchanged sentences

Stock option expense — 5,522,883 — 5,522,883

Other comprehensive loss — — — ( 5,235,838 ) ( 5,235,838 )

Reclassification of cumulative foreign currency translation adjustments due to sale of Mexico business — — — 31,290,918 31,290,918

Net income — — 28,157,478 28,157,478

1 unchanged sentence

See accompanying notes to Consolidated Financial Statements.

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CONSOLIDATED STATEMENTS OF CASH FLOWS

4 unchanged sentences

Adjustments to reconcile net income to net cash provided by operating activities:

Loss on sale of discontinued operations — — 38,377,623

Loss on assets held for sale 38,633 37,579 251,263

1 unchanged sentence

Amortization of historic tax credits 3,930,753 1,736,384 868,192

Amortization of deferred loan costs 16,911,599 17,101,722 23,057,541

Amortization of debt issuance costs 1,095,325 659,292 517,499

1 unchanged sentence

Depreciation 6,253,175 6,537,957 6,800,263

Amortization of finance leases 407,624 407,624 347,703

Loss on sale of property and equipment 419,975 2,812,404 339,259

1 unchanged sentence

Compensation related to stock option and restricted stock plans, net of taxes and adjustments 17,582,995 19,281,278 28,952,161

Gain on sale of finance receivables ( 24,667 ) — —

Gain on sale of loans receivable — ( 24,667 ) —

Gain on company-owned life insurance ( 106,885 ) ( 1,064,897 ) —

11 unchanged sentences

Proceeds from the sale of assets held for sale 1,104,895 2,810,391 —

Proceeds from the sale of finance receivables 449,327 — —

Proceeds from sale of discontinued operations — — 37,494,505

Proceeds from the sale of loans receivable — 449,327 —

Proceeds from company-owned life insurance — 1,997,279 —

3 unchanged sentences

Payments on senior notes payable ( 523,350,000 ) ( 357,076,750 ) ( 341,531,400 )

Issuance of senior unsecured notes payable 300,000,000 — —

Loan costs associated with senior unsecured notes payable ( 5,119,647 ) — —

Debt issuance costs associated with senior notes payable — ( 784,250 ) ( 991,400 )

2 unchanged sentences

Repurchase of common stock ( 111,139,261 ) ( 102,452,302 ) ( 197,399,964 )

Excess tax expense from exercise of stock options — — —

Repayment of finance lease ( 505,286 ) ( 594,024 ) ( 510,916 )

Net cash provided by (used in) financing activities 182,934,468 ( 140,828,257 ) 394,487

Effects of foreign currency fluctuations on cash and cash equivalents — — 2,667,447

Net change in cash and cash equivalents 3,489,868 4,127,532 2,283,489

Cash and cash equivalents at beginning of year from continuing operations 11,618,922 9,335,433 12,473,833

Cash and cash equivalents at beginning of year from discontinued operations — — 19,612,471

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Cash and cash equivalents at beginning of year 15,746,454 11,618,922 9,335,433

Cash and cash equivalents at end of year $ 19,236,322 $ 15,746,454 $ 11,618,922

Cash and cash equivalents at end of year from continuing operations 15,746,454 11,618,922 9,335,433

Supplemental Disclosures:

2 unchanged sentences

See accompanying notes to Consolidated Financial Statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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(1) Summary of Significant Accounting Policies

6 unchanged sentences

Branches in the aforementioned states operate under one of the following names:

Amicable Finance, Colonial Finance, Freeman Finance, General Credit, Midwestern Loans, World Acceptance, or World Finance.

On August 3, 2018 the Company and its affiliates completed the sale of the Company's Mexico operating segment in its entirety, effective as of July 1, 2018.

Thus, the Company operated no branches in Mexico as of March 31, 2021 or 2020.

During the first quarter of fiscal 2019, branches in Mexico operated under the name Préstamos Avance or Pr é stamos Viva.

The Company is subject to numerous lending regulations that vary by jurisdiction.

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, ParaData Financial Systems (a software company acquired during fiscal 1994), and WAC Insurance Company, Ltd.

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.

The financial statements of the Company’s former foreign subsidiaries in Mexico were prepared using the local currency as the functional currency.

Assets and liabilities of these subsidiaries were translated into U.S.

dollars at the then-current exchange rate while income and expense are translated at an average exchange rate for the applicable period.

The resulting translation gains and losses were recognized as a component of equity in “Accumulated Other Comprehensive Loss, net.”

Use of Estimates in the Preparation of Consolidated Financial Statements

10 unchanged sentences

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

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network in conjunction with or as a complement to the lending operations.

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.

23 unchanged sentences

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.

3 unchanged sentences

Nonaccrual Policy

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The accrual of interest is discontinued when a loan is 61 days or more past the contractual due date.

3 unchanged sentences

Allowance for Credit Losses

Refer to Note 2, “Allowance for Credit Losses and Credit Quality Indicators,” in this Annual Report on Form 10-K for information regarding the Company's adoption of the CECL allowance model on April 1, 2020 and a description of the methodology it utilizes.

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.

Impaired Loans

1 unchanged sentence

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, 2021, bankrupt accounts that had not been charged off were approximately $ 3.2 million.

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.

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

5 unchanged sentences

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 or the term of the lease.

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 the consolidated statement of operations.

Operating Leases

The Company’s branch leases typically have a lease term of three to five years and contain lessee renewal options and cancellation clauses in the event of regulatory changes.

The Company typically renews its leases for one or more option periods.

Accordingly, the Company amortizes its leasehold improvements over the shorter of their economic lives, which are generally five years , or the lease term that considers renewal periods that are reasonably assured.

Other assets include cash surrender value of life insurance policies, prepaid expenses, debt issuance costs, and other deposits.

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.

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 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

5 unchanged sentences

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.

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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.

12 unchanged sentences

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 year ended 2021, 2020, or 2019.

The Company did not record any impairment charges for the fiscal years ended March 31, 2022, 2021, or 2020.

Fair Value of Financial Instruments

2 unchanged sentences

The Company’s financial instruments for the periods reported consist of the following:

cash and cash equivalents, loans receivable and senior notes payable.

Fair value approximates carrying value for all of these instruments.

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 revolving credit facility has a variable rate based on a margin over LIBOR and reprices with any changes in LIBOR.

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

8 unchanged sentences

Any remaining losses are charged to the allowance for credit losses.

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Income taxes are accounted for under the asset and liability method.

19 unchanged sentences

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 March 12, 2020, 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, 2021, the Company had $ 21.4 million in aggregate remaining repurchase capacity.

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 limits share repurchases to 50% of consolidated adjusted net income in any fiscal year commencing with the fiscal year ending March 31, 2017 without prior written consent of the lenders.

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.

Comprehensive Income

Total comprehensive income consists of net income and other comprehensive income (loss).

The Company’s other comprehensive income (loss) and accumulated other comprehensive income (loss) are composed of foreign currency translation adjustments.

Concentration of Risk

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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 the years ended March 31, 2021, 2020, and 2019, total revenue within the Company's four largest states (Texas, Georgia, Tennessee, and South Carolina) accounted for approximately 53 %, 56 % and 57 %, respectively, of the Company's total revenues.

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.

4 unchanged sentences

Advertising costs were approximately $ 18.3 million, $ 17.2 million, and $ 24.3 million for fiscal years 2022, 2021, and 2020, respectively.

Recently Adopted Accounting Standards

Measurement of Credit Losses on Financial Instruments

ASU 2016-13 (and all subsequent ASUs on this topic) introduce the CECL model, a new credit loss methodology, replacing multiple existing impairment methods in current GAAP, which generally require that a loss be incurred before it is recognized.

The amendments in this ASU require loss estimates be determined over the lifetime of the asset and broaden the information that an entity must consider in developing its expected credit losses.

The ASU does not specify a method for measuring expected credit losses and allows an entity to apply methods that reasonably reflect its expectations of the credit loss estimate based on the entity’s size, complexity, and risk profile.

In addition, the disclosures of credit quality indicators in relation to the amortized cost of financing receivables, a current disclosure requirement, are further disaggregated by year of origination.

The Company adopted this ASU (and all subsequent ASUs on this topic) as of April 1, 2020 using the modified retrospective approach.

The adoption of this pronouncement resulted in the recognition of a $ 28.6 million increase in the allowance for credit losses on our opening balance sheet as of April 1, 2020, with a corresponding net-of-tax $ 21.2 million reduction in retained earnings and a $ 7.4 million increase to deferred income taxes, net.

Recently Issued Accounting Standards Not Yet Adopted

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

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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 March 31, 2021

Customer Tenure March 31, 2022 March 31, 2021

0 to 5 months $ 198,740,475 $ 92,378,097

6 unchanged sentences

During the first quarter of fiscal 2021, we adopted ASU 2016-13, which replaces the incurred loss methodology for determining our provision for credit losses and allowance for credit losses with an expected loss methodology that is referred to as the CECL model, using the modified retrospective approach.

Upon adoption, the total allowance for credit losses increased by $ 28.6 million, with no impact to the consolidated statement of operations.

Upon adoption, the total allowance for credit losses increased by $ 28.6 million, with no impact to the Consolidated Statements of Operations.

Based on the Company’s loan products, the purpose and the term, current payment performance is used to assess the capability of the borrower to repay contractual obligations of the loan agreements as scheduled.

4 unchanged sentences

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:

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Term Loans By Origination

17 unchanged sentences

Years Ago More than

Years Ago Total

Current $ 4,737,741 $ 7,033 $ — $ — $ — $ — $ 4,744,774

4 unchanged sentences

Total gross loans $ 1,522,788,860

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

Year Ago Between

Years Ago Between

Years Ago More than

Years Ago Total

Current $ 970,526,682 $ 45,769,052 $ 2,102,732 $ 154,890 $ 14,444 $ 831 $ 1,018,568,631

30 - 60 days past due 21,862,634 2,011,261 153,417 21,426 3,500 2,069 24,054,307

61 - 90 days past due 18,039,010 1,208,936 88,119 11,800 571 — 19,348,436

91 or more days past due 31,126,328 3,120,210 183,434 14,028 14,708 168 34,458,876

Total $ 1,041,554,654 $ 52,109,459 $ 2,527,702 $ 202,144 $ 33,223 $ 3,068 $ 1,096,430,250

Term Loans By Origination

Tax advance loans Up to

Year Ago Between

Years Ago Between

Years Ago More than

Years Ago Total

Current $ 7,583,075 $ 9,360 $ — $ — $ — $ — $ 7,592,435

30 - 60 days past due 686,667 1,423 — — — — 688,090

61 - 90 days past due — — 321 — — — 321

91 or more days past due — 34,509 656 — — — 35,165

Total $ 8,269,742 $ 45,292 $ 977 $ — $ — $ — $ 8,316,011

Total gross loans $ 1,104,746,261

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:

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Term Loans By Origination

24 unchanged sentences

Total gross loans $ 1,522,788,860

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

Year Ago Between

Years Ago Between

Years Ago More than

Years Ago Total

Current $ 948,353,853 $ 39,661,944 $ 1,522,148 $ 83,073 $ 1,790 $ 831 $ 989,623,639

30 - 60 days past due 29,300,148 1,872,816 72,187 1,322 — — 31,246,473

61 - 90 days past due 23,075,264 1,363,196 75,343 567 — — 24,514,370

91 or more days past due 40,825,388 9,211,503 858,024 117,183 31,433 2,237 51,045,768

Total $ 1,041,554,653 $ 52,109,459 $ 2,527,702 $ 202,145 $ 33,223 $ 3,068 $ 1,096,430,250

Term Loans By Origination

Tax advance loans Up to

Year Ago Between

Years Ago Between

Years Ago More than

Years Ago Total

Current $ 7,583,075 $ — $ — $ — $ — $ — $ 7,583,075

30 - 60 days past due 686,667 — — — — — 686,667

61 - 90 days past due — — — — — — —

91 or more days past due — 45,292 977 — — — 46,269

Total $ 8,269,742 $ 45,292 $ 977 $ — $ — $ — $ 8,316,011

Total gross loans $ 1,104,746,261

The allowance for credit losses is applied to amortized cost, which is defined as the amount at which a financing receivable is originated, and net of deferred fees and costs, collection of cash, and charge-offs.

3 unchanged sentences

In estimating the allowance for credit losses, loans with similar risk characteristics are aggregated into pools and collectively assessed.

The Company’s loan products have generally the same terms therefore the Company looked to borrower characteristics as a way to disaggregate loans into pools sharing similar risks.

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.

3 unchanged sentences

Customer Tenure

To determine how well each metric predicts default risk the Company uses loss rate data over an observation period of twelve months at the loan level.The information value was then calculated for each metric.

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.

4 unchanged sentences

36 to 59 months

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

18 unchanged sentences

Percentage of period-end gross loans receivable 3.5 % 2.5 % 4.5 % 10.4 %

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:

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

Days Past Due - Recency Basis

Customer Tenure Current 30 - 60 61 - 90 Over 90 Total Past Due Total Loans

0 to 5 months $ 72,702,970 $ 4,799,102 $ 5,680,380 $ 9,195,642 $ 19,675,124 $ 92,378,094

6 to 17 months 94,466,209 3,187,347 2,798,411 6,290,155 12,275,913 106,742,122

18 to 35 months 158,217,605 3,570,696 2,592,402 4,981,208 11,144,306 169,361,911

36 to 59 months 123,542,346 2,432,489 1,753,291 2,927,501 7,113,281 130,655,627

60+ months 569,639,500 10,064,674 6,523,952 11,064,370 27,652,996 597,292,496

Tax advance loans 7,592,435 688,090 321 35,165 723,576 8,316,011

Total gross loans 1,026,161,065 24,742,398 19,348,757 34,494,041 78,585,196 1,104,746,261

Unearned interest, insurance and fees ( 259,492,219 ) ( 6,256,776 ) ( 4,892,850 ) ( 8,722,739 ) ( 19,872,365 ) ( 279,364,584 )

Total net loans $ 766,668,846 $ 18,485,622 $ 14,455,907 $ 25,771,302 $ 58,712,831 $ 825,381,677

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

The following table 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

10 unchanged sentences

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 Current 30 - 60 61 - 90 Over 90 Total Past Due Total Loans

0 to 5 months $ 70,532,439 $ 5,245,878 $ 6,019,264 $ 10,580,514 $ 21,845,656 $ 92,378,095

6 to 17 months 90,679,304 3,936,937 3,267,446 8,858,434 16,062,817 106,742,121

18 to 35 months 153,922,334 4,471,202 3,488,629 7,479,745 15,439,576 169,361,910

36 to 59 months 120,168,698 3,229,253 2,337,625 4,920,052 10,486,930 130,655,628

60+ months 554,320,865 14,363,203 9,401,406 19,207,022 42,971,631 597,292,496

Tax advance loans 7,583,075 686,667 — 46,269 732,936 8,316,011

Total gross loans $ 997,206,715 $ 31,933,140 $ 24,514,370 $ 51,092,036 $ 107,539,546 $ 1,104,746,261

Unearned interest, insurance and fees $ ( 252,170,339 ) $ ( 8,075,147 ) $ ( 6,199,113 ) $ ( 12,919,985 ) $ ( 27,194,245 ) $ ( 279,364,584 )

Total net loans $ 745,036,376 $ 23,857,993 $ 18,315,257 $ 38,172,051 $ 80,345,301 $ 825,381,677

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

The Company elected not to record an allowance for credit losses for accrued interest as outlined in ASC 326-20-30-5A.

5 unchanged sentences

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, 2021, the Company reversed a total of $ 22.4 million of unpaid accrued interest against interest income.

The following table presents the amortized cost basis of loans on nonaccrual status as of the beginning of the reporting period and the end of the reporting period and the amortized cost basis of nonaccrual loans without related expected credit loss.

It also shows year-to-date interest income recognized on nonaccrual loans:

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, 2021 As of March 31, 2020 Financial Assets 61 Days or More Past Due, Not on Nonaccrual Status Nonaccrual Financial Assets With No Allowance as of March 31, 2021 Interest Income

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

0 to 5 months $ 45,227,510 $ — $ — $ 1,485,356

6 unchanged sentences

Total $ 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

0 to 5 months $ 17,191,922 $ — $ — $ 1,705,371

6 to 17 months 13,211,641 — — 2,433,144

18 to 35 months 12,088,377 — — 2,195,160

36 to 59 months 8,161,951 — — 1,609,059

60+ months 31,925,232 — — 6,747,722

Tax advance loans 46,269 — — —

Unearned interest, insurance and fees ( 20,894,036 )

Total $ 61,731,356 $ — $ — $ 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:

Table o f C o ntent s

2022 2021 2020

1 unchanged sentence

Impact of ASC 326 adoption — 28,628,368 —

Provision for loan losses 86,244,714 181,730,182 148,426,578

Loan losses ( 141,270,125 ) ( 183,439,199 ) ( 148,308,199 )

Provision for credit losses 186,207,341 86,244,714 181,730,182

Charge-offs ( 164,747,550 ) ( 141,270,125 ) ( 183,439,199 )

Recoveries 21,060,785 21,631,475 16,677,249

Balance at end of period $ 134,242,862 91,722,288 96,487,856

Under the prior incurred loss methodology, loss contingencies were evaluated as:

probable, reasonably possible, or remote.

If, at the date of financial statement presentation, information was available that indicated an asset had been impaired and the amount of loss could be reasonably estimated, then an allowance for that loss could be recorded.

Recording an allowance for a loss that was considered reasonably possible or remote was not permitted.

With the adoption of ASC 326, the Company considers the lifetime potential for losses at the point of origination and records an allowance for that potential, at that point in time, removing the necessity of differentiation between the three loss contingency concepts and impairment.

The following disclosures are presented under previously applicable GAAP.

March 31, 2020 Loans individually

evaluated for

(impaired loans) Loans collectively

evaluated for

impairment Total

Gross loans in bankruptcy, excluding contractually delinquent $ 5,165,752 — 5,165,752

Gross loans contractually delinquent 70,719,727 — 70,719,727

Loans not contractually delinquent and not in bankruptcy — 1,133,985,887 1,133,985,887

Gross loan balance 75,885,479 1,133,985,887 1,209,871,366

Unearned interest and fees ( 16,848,762 ) ( 292,131,962 ) ( 308,980,724 )

Net loans 59,036,717 841,853,925 900,890,642

Allowance for loan losses ( 54,090,509 ) ( 42,397,347 ) ( 96,487,856 )

Loans, net of allowance for loan losses $ 4,946,208 799,456,578 804,402,786

The average net balance of impaired loans was $ 57.2 million, and $ 47.0 million, respectively, for the years ended March 31, 2020, and 2019.

It is not practicable to compute the amount of interest earned on impaired loans, nor is it practicable to compute the interest income recognized using the cash-basis method during the period such loans were impaired.

Table o f C o ntent s

The following is an assessment of the credit quality for March 31, 2020:

Consumer loans- non-bankrupt accounts $ 1,203,552,152

Consumer loans- bankrupt accounts 6,319,214

Total gross loans 1,209,871,366

Consumer credit exposure

Credit risk profile based on payment activity, performing 1,104,130,714

Contractual non-performing, 61 days or more delinquent (1)

Total gross loans 1,209,871,366

Credit risk profile based on customer type

New borrower 124,800,193

Former borrower 127,108,125

Refinance 935,448,882

Delinquent refinance 22,514,166

Total gross loans $ 1,209,871,366

_______________________________________________________

(1) Loans in non-accrual status

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

Contractual basis:

30-60 days past due $ 49,137,102

61-90 days past due 35,020,925

91 days or more past due 70,719,727

Total $ 154,877,754

Percentage of period-end gross loans receivable 12.8 %

Recency basis:

30-60 days past due $ 48,206,910

61-90 days past due 28,450,942

91 days or more past due 50,669,837

Total $ 127,327,689

Percentage of period-end gross loans receivable 10.5 %

Table o f C o ntent s

(3) Property and Equipment

19 unchanged sentences

Total $ 66,258,763 ( 46,502,649 ) 19,756,114 $ 65,029,892 ( 41,492,375 ) 23,537,517

The estimated amortization expense for intangible assets for future years ended March 31 is as follows:

The estimated amortization expense for intangible assets for future fiscal years ended March 31 is as follows:

$ 4.5 million for 2023;

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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.

Table o f C o ntent s

(6) Notes Payable

Senior Notes Payable;

Revolving Credit Facility

At March 31, 2021, the Company's 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 $ 685.0 million provided that certain conditions are met.

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.

3 unchanged sentences

however, it automatically extends for one year on the expiration date.

Subject to a borrowing base formula, the Company may borrow at the rate of LIBOR plus an applicable margin between 3.5 % and 4.5 % based on certain EBITDA related metrics set forth in the revolving credit agreement, which will be determined and adjusted on a monthly basis with a minimum rate of 4.5 %.

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.

3 unchanged sentences

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

Senior Unsecured Notes Payable

On September 27, 2021, we issued $ 300 million in aggregate principal amount of 7.0 % senior notes due 2026 (the “Notes”).

The Notes were sold in a private placement in reliance on Rule 144A and Regulation S under the Securities Act of 1933, as amended.

The Notes are unconditionally guaranteed, jointly and severally, on a senior unsecured basis by all of the Company’s existing and certain of its future subsidiaries that guarantee the revolving credit facility.

Interest on the notes is payable semi-annually in arrears on May 1 and November 1 of each year, commencing May 1, 2022.

At any time prior to November 1, 2023, the Company may redeem the Notes, in whole or in part, at a redemption price equal to 100 % of the principal amount plus a make-whole premium, as described in the indenture, plus accrued and unpaid interest, if any, to, but not including, the date of redemption.

At any time on or after November 1, 2023, the Company may redeem the Notes at redemption prices set forth in the indenture, plus accrued and unpaid interest, if any, to, but not including, the date of redemption.

In addition, at any time prior to November 1, 2023, the Company may use the proceeds of certain equity offerings to redeem up to 40.0 % of the aggregate principal amount of the Notes issued under the indenture at a redemption price equal to 107.0 % of the principal amount of Notes redeemed, plus accrued and unpaid interest, if any, to, but not including, the date of redemption.

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

Debt Covenants

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

The agreement also contains financial covenants, including (i) a minimum consolidated net worth of (a) $ 365.0 million through December 30, 2020 and (b) $ 325.0 million on and after December 31, 2020;

(ii) a minimum fixed charge coverage ratio of (a) 2.25 to 1.0 for the fiscal quarters ending March 31, 2020, June 30, 2020 and September 30, 2020 and (b) 2.75 to 1.0 for each fiscal quarter thereafter;

(iii) a maximum ratio of total debt to consolidated adjusted net worth of 2.0 to 1.0;

and (iv) a maximum collateral performance indicator of 24 % as of the end of each calendar month.

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.

1 unchanged sentence

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.

Table o f C o ntent s

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, 2021, the aggregate annual maturities of the notes payable for each of the five fiscal years subsequent to March 31, 2021 were as follows:

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:

2025 396,972,746

2027 300,000,000

Total future debt payments $ 696,972,746

20 unchanged sentences

Accounting Policies and Matters Requiring Management's Judgment

When determining the economic life of a lease the Company adopts a convention of applying an economic life equal to the useful life as specified in its accounting policy.

Refer to Note 1, “Property and Equipment,” in this Annual Report on Form 10-K for a description of the Company's accounting policy regarding useful lives.

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 2020’s annual effective interest rate of 5.8 % will be used in the determination of lease type as well as the

Table o f C o ntent s

discount rate when calculating the present value of lease payments for all leases entered into in fiscal 2020 or until a new annual effective interest rate is available for application.

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.

2 unchanged sentences

Periodic Disclosures

The Company's leases consist of real estate leases for office space as well as office equipment leases, all of which were classified as operating at March 31, 2021.

Both the branch real estate and office equipment leases range from three years to five years , and generally contain options to extend which mirror the original terms of the lease.

The following table reports information about the Company's lease cost for the years ended March 31, 2021 and 2020:

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.

The following table reports information about the Company's lease costs for the years ended March 31, 2022, 2021, and 2020:

2022 2021 2020

Finance lease cost $ 427,619 $ 466,168 $ 430,744

Amortization of right-of-use assets 407,624 407,624 347,703

Interest on lease liabilities 19,995 58,544 83,041

Operating lease cost $ 27,529,425 $ 27,977,226 $ 26,244,323

2 unchanged sentences

Total lease cost $ 31,586,947 $ 32,066,942 $ 30,055,842

The following table reports other information about the Company's leases for years ended March 31, 2021 and 2020:

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 $ 27,936,317 $ 28,211,828 $ 26,212,843

Operating cash flows from finance leases 19,994 58,544 83,041

Operating cash flows from operating leases 27,411,037 27,559,260 25,618,886

Financing cash flows from finance leases 505,286 594,024 510,916

Right-of-use assets obtained in exchange for new finance lease liabilities $ — $ — $ 753,736

Right-of-use assets obtained in exchange for new operating lease liabilities $ 15,381,953 $ 12,482,167 $ 36,826,045

Weighted average remaining lease term — operating leases 7.3 years 8.4 years

Weighted-average remaining lease term — finance leases 0.4 years 0.8 years 1.5 years

Weighted average remaining lease term — operating leases 7.3 years 7.3 years 8.4 years

Weighted-average discount rate (monthly) — finance leases 6.0 % 6.4 % 6.5 %

Weighted-average discount rate — operating leases 6.1 % 6.3 % 6.7 %

The following table reports information about the maturity of the Company's operating leases as of March 31, 2021:

Operating lease liability maturity analysis

FY2022 25,697,140

FY2023 21,366,591

FY2024 17,262,768

FY2025 12,608,028

FY2026 8,874,883

The aggregate annual lease obligations as of fiscal year March 31, 2022, are as follows:

Operating Finance

2023 24,112,009 80,067

2024 20,140,680 —

2025 15,645,906 —

2026 12,034,692 —

2027 7,609,780 —

Thereafter 30,106,884 —

2 unchanged sentences

Total discounted lease liability $ 87,399,049 $ 80,067

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

Table o f C o ntent s

The Company had no leases with related parties as of fiscal year March 31, 2022 or 2021.

(10) Income Taxes

On December 22, 2017, the U.S.

government enacted comprehensive tax legislation commonly referred to as the TCJA.

The TCJA included significant changes to existing tax law, including a permanent reduction to the U.S.

federal corporate income tax rate from 35% to 21%, a one-time repatriation tax on deferred foreign income (“Transition Tax”), deductions, credits and business-related exclusions.

The impact of changes in federal tax rates on deferred tax amounts and the effect of the Transition Tax are significant unusual or infrequent events which are recognized as discrete items in the Company’s income tax expense in the period in which the event occurs.

The Company recorded a $ 10.5 million increase in tax expense related to the net impact of revaluing the U.S.

deferred tax assets and liabilities in the third quarter of fiscal 2018.

An adjustment was made in the third quarter of fiscal 2019 to record an $ 850.0 thousand tax benefit related to the revaluing of the U.S.

deferred tax assets and liabilities due to additional analysis and change in estimate from the original calculation.

The Company also recorded an increase in tax expense of $ 4.9 million related to the foreign Transition Tax during the final quarter of fiscal 2018.

Because of the Transition Tax, the Company's tax basis was greater than its book basis.

The recognition of the basis difference upon the sale of the Mexican operations in fiscal 2019 created a capital loss that the Company does not believe will be recognized in the carryforward period;

therefore, a full tax valuation allowance was recorded against the recognized loss carryforward.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted in response to the COVID-19 pandemic.

1 unchanged sentence

The CARES Act did not have a material impact on the Company's income tax position.

Income tax expense (benefit) from continuing operations consists of:

Income tax expense (benefit) consists of:

Current Deferred Total

Year ended March 31, 2022

Continuing Operations- Federal $ 16,443,592 4,077,609 20,521,201

Continuing Operations- State and local 1,025,645 1,573,753 2,599,398

Federal $ 22,262,110 ( 11,892,354 ) 10,369,756

State and local 4,206,087 ( 2,916,361 ) 1,289,726

$ 26,468,197 ( 14,808,715 ) 11,659,482

Year ended March 31, 2021

Continuing Operations- Federal $ 3,307,872 ( 224,604 ) 3,083,268

Continuing Operations- State and local 2,871,179 797,518 3,668,697

Federal $ 16,443,592 4,077,609 20,521,201

State and local 1,025,645 1,573,753 2,599,398

$ 17,469,237 5,651,362 23,120,599

Year ended March 31, 2020

Continuing Operations- Federal $ 20,508,247 ( 1,833,943 ) 18,674,304

Continuing Operations- State and local ( 871,439 ) ( 1,821,808 ) ( 2,693,247 )

Federal $ 3,307,872 ( 224,604 ) 3,083,268

State and local 2,871,179 797,518 3,668,697

$ 6,179,051 572,914 6,751,965

Table o f C o ntent s

The differences between income taxes expected at the U.S.

federal statutory income tax rate of 21 % and the reported income tax expense from continuing operations for March 31, 2021, 2020 and 2019 are summarized as follows:

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 2020

4 unchanged sentences

State tax credits ( 470,916 ) — ( 500,000 )

Revalue deferred tax assets and liabilities — — ( 852,523 )

Uncertain tax positions ( 555,252 ) ( 2,107,263 ) ( 167,455 )

5 unchanged sentences

$ 11,659,482 23,120,599 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 from discontinued operations for March 31, 2021, 2020 and 2019 are summarized as follows:

2021 2020 2019

Expected income tax $ — — 491,783

Increase (reduction) in income taxes resulting from:

Foreign income adjustments — — 187,974

Other, net — — ( 53,174 )

$ — — 626,583

Table o f C o ntent s

The tax effects of temporary differences from continuing operations that give rise to significant portions of the deferred tax assets and deferred tax liabilities at March 31, 2021 and 2020 are presented below:

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:

4 unchanged sentences

Lease liability 21,575,596 22,231,591

Intangible assets 254,986 —

Foreign tax credit carryforward 3,254,926 3,254,926

15 unchanged sentences

At March 31, 2022, the Company had state net operating loss carryforwards of approximately $ 63.8 million.

A deferred tax asset of approximately $ 0.1 million has been recorded to reflect the benefit of these losses that the Company expects to be recognized.

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 $ 144,125 for the year ended March 31, 2021 when compared to March 31, 2020.

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, 2021 consisted of $ 1,274 related to state of Colorado net operating loss carryforwards in the amount of $ 54,318 , which expire in 2025, 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, and $ 7.9 million related to the $ 37.1 million capital loss carryforward from the sale of the Mexican operations in fiscal 2019 which expires in 2024 and $ 0.7 million related to the sale of the former headquarters building which expires in 2026.

The Company does not expect to generate enough foreign source income or capital gains in future tax years to realize these tax attributes.

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.

Management considers the scheduled reversals of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment.

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.

Based upon the level of historical taxable income and projections for future taxable income over the periods in which the related temporary differences are deductible, management believes it is more likely than not the Company will realize the benefits of these deductible differences, net of the existing valuation allowances at March 31, 2021.

The amount of the deferred tax asset considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carryforward period are reduced.

Table o f C o ntent s

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 $ 2.6 million, $ 5.2 million, and $ 5.4 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.

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.

A reconciliation of the beginning and ending amount of unrecognized tax benefits at March 31, 2022, 2021, and 2020 are presented below:

14 unchanged sentences

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.

Table o f C o ntent s

(11) Earnings Per Share

The following is a reconciliation of the numerators and denominators of the basic and diluted EPS from continuing operations calculations:

The following is a reconciliation of the numerators and denominators of the basic and diluted EPS calculations:

For the year ended March 31, 2022

1 unchanged sentence

(Denominator) Per Share

Income from continuing operations available to common shareholders $ 88,282,828 6,493,898 $ 13.59

Net income available to common shareholders $ 53,919,837 6,072,170 $ 8.88

Effect of dilutive securities options and restricted stock — 291,896

Income from continuing operations available to common shareholders including dilutive securities $ 88,282,828 6,672,110 $ 13.23

Net income available to common shareholders including dilutive securities $ 53,919,837 6,364,066 $ 8.47

For the year ended March 31, 2021

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(Denominator) Per Share Amount

Income from continuing operations available to common shareholders $ 28,157,478 7,688,242 $ 3.66

Net income available to common shareholders $ 88,282,828 6,493,898 $ 13.59

Effect of dilutive securities options and restricted stock — 178,212

Income from continuing operations available to common shareholders including dilutive securities $ 28,157,478 7,952,900 $ 3.54

Net income available to common shareholders including dilutive securities $ 88,282,828 6,672,110 $ 13.23

For the year ended March 31, 2020

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(Denominator) Per Share Amount

Income from continuing operations available to common shareholders $ 73,897,515 8,994,036 $ 8.22

Net income available to common shareholders $ 28,157,478 7,688,242 $ 3.66

Effect of dilutive securities options and restricted stock — 264,658

Income from continuing operations available to common shareholders including dilutive securities $ 73,897,515 9,204,377 $ 8.03

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.

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(12) Benefit Plans

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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, 2021 and 2020 no executive or director had deferred compensation under this 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 and Stock Option Committee of the Board of Directors.

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.

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Separately, the Compensation Committee approved certain grants of Service Options and Restricted Stock to certain of the Company’s non-employee directors.

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Under the long-term incentive program, up to 100 % of the shares of restricted stock subject to the Performance Shares shall vest, if at all, based on the achievement of two trailing earnings per share performance targets established by the Compensation Committee that are based on earnings per share (measured at the end of each calendar quarter, commencing with the calendar quarter ending September 30, 2019) for the previous four calendar quarters.

The Performance Shares are eligible to vest over the Performance Share Measurement Period and subject to each respective employee’s continued employment at the Company through the last day of the applicable Performance Share Measurement Period (or as otherwise provided under the terms of the applicable award agreement or applicable employment agreement).

The Performance 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.

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governmental bonds having a remaining life similar to the expected option term.

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Option activity for the year ended March 31, 2022 was as follows:

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Forfeited ( 19,158 ) 99.25

Expired ( 1,130 ) 103.75

Options outstanding, end of period 348,566 1 $ 104.33 6.43 $ 30,551,741

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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.

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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.

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:

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Total stock-based compensation related to equity classified awards $ 17,582,995 19,281,278 28,952,161

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(13) Acquisitions

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Customer lists are allocated at a branch level and are evaluated for impairment at a branch level

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when a triggering event occurs in accordance with FASB ASC Topic 360-10-05.

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The Company’s financial instruments for the periods reported consist of the following:

cash and cash equivalents, loans receivable, and senior notes payable.

Fair value approximates carrying value for all of these instruments.

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 revolving credit facility has a variable rate based on a margin over LIBOR and reprices with any changes in LIBOR.

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.

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Loans receivable, net 3 985,515,154 985,515,154 733,659,389 733,659,389

Senior unsecured notes payable 2 300,000,000 264,639,000 — —

Senior notes payable 3 396,972,746 396,972,746 405,007,500 405,007,500

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Assets held for sale 2 $ — $ — $ 1,143,528 $ 1,143,528

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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.

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Income tax expense 4,770 1,641 391 4,857 5,527 3,767 2,418 11,409

Net income (loss) $ 15,509 13,398 14,491 44,884 8,608 2,513 ( 6,267 ) 23,303

Net income (loss) per common share:

Net income $ 15,771 12,439 7,327 18,382 15,509 13,398 14,491 44,884

Net income per common share:

Basic $ 2.56 2.04 1.20 3.10 2.26 2.01 2.32 7.25

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(16) Commitments and Contingencies

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.

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.

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, the matters described above.

Based on information currently available, the Company does not believe that any reasonably possible losses arising from currently pending legal matters will be material to the Company’s results of operations or financial conditions.

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.

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(17) Assets Held for Sale

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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 $ 37,579 .

The loss on sale of assets held for sale is included as a component of insurance income, net and other income in the Company's Consolidated Statement of Operations.

The Company expects to complete the sale of the third, and final, building held for sale within the next twelve months.

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:

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Total assets held for sale $ — $ 1,143,528

(18) Discontinued Operations

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 $ 44.4 million.

Under the terms of the stock purchase agreement, we are obligated to indemnify the Purchasers for claims and liabilities relating to certain investigations of WAC de Mexico, SWAC, or the Sellers by the DOJ or the SEC that commenced prior to July 1, 2018.

Additionally, the Company has provided limited ParaData systems and software training to the Purchasers, as requested.

The Company has not and will not have any other involvement with the Mexico operating segment subsequent to the sale's effective date.

The following table reconciles the major classes of line items constituting pre-tax income of discontinued operations to the amounts presented in the Consolidated Statements of Operations:

Year ended March 31,

2021 2020 2019

Revenues $ — $ — $ 9,693,367

Provision for loan losses — — 1,809,059

General and administrative expenses — — 5,542,483

Income from discontinued operations before disposal of discontinued operations and income taxes — — 2,341,825

Loss on disposal of discontinued operations — — ( 38,377,623 )

Income taxes — — 626,583

Loss from discontinued operations $ — $ — $ ( 36,662,381 )

The following table presents operating, investing and financing cash flows for the Company’s discontinued operations:

Year ended March 31,

2021 2020 2019

Cash provided by operating activities:

$ — $ — $ 3,553,854

Cash provided by (used in) investing activities:

— — 1,138,084

Cash provided by (used in) financing activities:

$ — $ — $ ( 17,126,000 )

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(18) Subsequent Events

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

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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.

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

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President and Chief Executive Officer Executive Vice President and Chief Financial and Strategy Officer

June 2, 2021 Date:

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May 26, 2022 Date:

Report of Independent Registered Public Accounting Firm

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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, 2021, 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 June 2, 2021 expressed an unqualified opinion on the effectiveness of the Company's internal control over financial reporting.

Emphasis of Matter

As discussed in Notes 1 and 2 to the financial statements, the Company has changed its method of accounting for the allowance for credit losses in the year ended March 31, 2021 due to the adoption of Accounting Standards Update 2016-13, Financial Instruments – Credit Losses (Topic 326) .

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

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Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

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 matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Allowance for Credit Losses and Adoption of ASC 326

As described in Notes 1 and 2 to the financial statements, the Company adopted Accounting Standards Codification (ASC) Topic 326 on April 1, 2020, which resulted in an increase to the allowance for credit losses of $28.6 million upon adoption, and the Company established an allowance for credit losses of $91.7 million as of March 31, 2021, which was estimated using the Company’s current expected credit Loss (CECL) model.

The Company’s CECL model calculates 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 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 utilizes a reasonable and supportable forecast to determine if migration rates should be adjusted based on the most recent 6-month loss curves and compares these values to historical loss curves for indications of significant changes.

Management also takes qualitative information into consideration concerning credit conditions on an as needed basis if new information arises related to the customer’s ability to repay the loan.

Qualitative information monitored

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includes trends in delinquencies, FICO scores, and average loan size, which are monitored against historical trends to determine if changes are needed to the historical migration analysis.

Management utilized significant judgment in determining to use customer tenure as the basis to calculate the allowance for credit losses in the development of the CECL model and in identifying and 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 developing the CECL model, specifically the use of customer tenure as the basis of calculation, and in identifying and 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.

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:

We obtained an understanding of the relevant controls related to the development of the CECL model, and tested such controls throughout the year for design and operating effectiveness, including those controls over (a) validation of data used in the CECL model, (b) information technology controls relating to the CECL model, and (c) the management review and approval of the CECL model.

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 adjustments applied for reasonable and supportable forecasts and qualitative factors.

We tested the completeness and accuracy of data inputs into the CECL model as of March 31, 2021 and the adoption date as of April 1, 2020.

We evaluated the appropriateness of the allowance for credit losses by testing the mathematical accuracy of the quantitative calculations used by the Company.

We evaluated key assumptions, reasonable and supportable forecasts, and qualitative factors, including customer tenure loss rate trends and delinquency, for reasonableness by comparing to internal and external source data.

We evaluated the reasonableness of management’s historical loss rates by customer tenure and loan type by testing that charge-offs had the correct customer tenure classification within the CECL model, which impacted both the development of the CECL model and the reasonable and supportable forecasts used.

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.

We tested the completeness and accuracy of data inputs into the CECL model by comparing to internal data sources.

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.

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 .

Las Vegas, Nevada

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Raleigh, North Carolina

Report of Independent Registered Public Accounting Firm

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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, 2021 and 2020 and 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, 2021, and our report dated June 2, 2021 expressed an unqualified opinion.

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

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/s/ RSM US LLP

Las Vegas, Nevada

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Raleigh, North Carolina

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data