What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2024-05-23 compared with 2023-06-01 · 230 added, 190 removed, 949 unchanged (31% of the section changed)

6 unchanged sentences

Loans receivable, net 847,440,309 887,788,486

Operating lease right‐of‐use assets, net 81,289,240 85,631,304

Finance lease right‐of‐use assets, net — 607,512

Income taxes receivable 3,091,229 —

Operating lease ROU assets, net

79,501,238 81,289,240

Property and equipment, net 22,897,197 23,926,080

9 unchanged sentences

Operating lease liability 81,920,865 83,735,002

Finance lease liability — 80,067

Accounts payable and accrued expenses 53,974,198 50,559,920

40 unchanged sentences

Balances at March 31, 2023 6,231,082 $ 288,071,839 $ 97,154,898 $ 385,226,737

Proceeds from exercise of stock options, net of cancellations 7,569 654,920 — 654,920

Proceeds from exercise of stock options 34,649 2,867,974 — 2,867,974

Common stock repurchases ( 295,201 ) — ( 36,505,861 ) ( 36,505,861 )

Restricted common stock expense under stock option plan, net of cancellations ($ 2,543,001 )

Stock-based compensation (reversal) related to restricted stock, net of cancellations ($ 2,823,774 )

( 31,865 ) ( 752,652 ) — ( 752,652 )

Stock option expense — 2,442,309 — 2,442,309

Cumulative effect of adoption of ASU 2023-02 — — ( 1,880,346 ) ( 1,880,346 )

Stock-based compensation (reversal) related to stock options — ( 3,754,209 ) — ( 3,754,209 )

Net income — — 77,345,227 77,345,227

3 unchanged sentences

Balances at March 31, 2022 6,348,314 $ 280,907,085 $ 92,117,343 $ 373,024,428

Proceeds from exercise of stock options 154,699 12,805,646 — 12,805,646

Proceeds from exercise of stock options, net of cancellations

7,569 654,920 — 654,920

Common stock repurchases ( 73,643 ) — ( 14,314,089 ) ( 14,314,089 )

Restricted common stock expense under stock option plan, net of cancellations ($ 5,072,230 )

Stock-based compensation related to restricted stock, net of cancellations ($ 2,543,001 )

( 51,158 ) 4,067,525 — 4,067,525

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

Stock-based compensation related to stock options

— 2,442,309 — 2,442,309

Cumulative effect of adoption of ASU 2023-02 — — ( 1,880,346 ) ( 1,880,346 )

Net income — — 21,231,990 21,231,990

3 unchanged sentences

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

Proceeds from exercise of stock options, net 165,237 12,268,554 — 12,268,554

Proceeds from exercise of stock options 154,699 12,805,646 — 12,805,646

Common stock repurchases ( 589,533 ) — ( 111,139,261 ) ( 111,139,261 )

Restricted common stock expense under stock option plan, net of cancellations ($ 3,173,735 )

Stock-based compensation related to restricted stock, net of cancellations ($ 5,072,230 )

( 22,146 ) 9,036,852 — 9,036,852

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

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

Stock-based compensation related to stock options

— 3,473,913 — 3,473,913

Net income — — 53,919,837 53,919,837

17 unchanged sentences

Amortization of finance leases — 204,552 407,624

Gain on asset acquisition, net of income tax ( 3,993,168 ) — —

Loss on sale of property and equipment 11,837 419,975 2,812,404

Gain on asset acquisitions, net of income tax

( 112,683 ) ( 3,993,168 ) —

Loss (gain) on sale of property and equipment

( 57,100 ) 11,837 419,975

Deferred income tax expense (benefit) 10,737,604 ( 2,102,085 ) ( 14,808,715 )

Compensation related to stock option and restricted stock plans, net of taxes and adjustments 9,052,835 17,582,995 19,281,278

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

Stock-based compensation (reversal) related to equity classified awards

( 1,683,087 ) 9,052,835 17,582,995

Gain on company-owned life insurance ( 154,140 ) ( 104,113 ) ( 106,885 )

10 unchanged sentences

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

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

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

Net cash used in investing activities ( 135,137,818 ) ( 180,583,800 ) ( 451,891,141 )

18 unchanged sentences

Income taxes paid during the year $ 8,952,124 $ 10,783,143 $ 30,941,852

Finance lease right-of-use assets, net transferred to property and equipment, net $ 402,960 $ — $ —

Finance lease ROU assets, net transferred to property and equipment, net

$ — $ 402,960 $ —

Non-cash excise tax on stock repurchases

$ 301,330 $ — $ —

See accompanying notes to Consolidated Financial Statements.

19 unchanged sentences

Reclassification

Certain prior period amounts have been reclassified to conform to the current presentation.

Such reclassifications had no impact on previously reported net income or shareholders' equity.

From time to time, prior period amounts may be reclassified to conform to the current presentation.

Such reclassifications have no impact on previously reported net income or shareholders' equity.

Business Segments

34 unchanged sentences

Management believes that the carrying value approximates the fair value of its loan portfolio.

From time to time, the Company will sell charged off loans receivable, which are accounted for as a sale in accordance with ASC 860, Transfers and Servicing .

See Note 2, “Allowance for Credit Losses and Credit Quality Information," for further information.

Nonaccrual Policy

4 unchanged sentences

Allowance for Credit Losses

Refer to Note 2, “Allowance for Credit Losses and Credit Quality Information”, for information regarding the Company's adoption of the CECL allowance model on April 1, 2020 and a description of the methodology it utilizes.

Impaired Loans

The Company defines impaired loans as bankrupt accounts and accounts 91 days or more past due on a recency basis.

In accordance with the Company’s charge-off policy, once a loan is deemed uncollectible, 100% of the net investment is charged off, except in the case of a borrower who has filed for bankruptcy.

As of March 31, 2023 and 2022, bankrupt accounts that had not been charged off were approximately $ 6.8 million and $ 5.4 million, respectively.

Bankrupt accounts 91 days or more past due on a recency basis are reserved at 100% of the gross loan balance.

The Company also considers any accounts 91 days or more past due on a recency basis to be impaired, and such accounts are reserved at 100% of the gross loan balance, less a rehab rate for defaulted loans that do not charge-off.

Refer to Note 2, “Allowance for Credit Losses and Credit Quality Information”, for information regarding the Company's CECL allowance model and a description of the policies and methodology utilized.

Property and Equipment

10 unchanged sentences

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 ROU assets and lease liabilities for its leases, which are initially recognized based on the discounted future lease payments over the term of the lease.

The Company uses its effective annual or fourth quarter interest rate as the discount rate when evaluating leases.

Lease liability is measured as of the lease commencement date based on the present value of the remaining minimum lease payments.

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.

A lease's ROU asset equals its lease liability, net of any prepaid rent.

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.

1 unchanged sentence

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.

Variable lease costs are payments that vary because of changes in facts or circumstances occurring after a lease's commencement date, other than the passage of time, and can include expenses such as common area maintenance, utilities, and repairs and maintenance.

Other assets include cash surrender value of life insurance policies, HTC investments, prepaid expenses, debt issuance costs related to the senior notes payable, and other deposits and receivables.

5 unchanged sentences

Intangible Assets and Goodwill

Intangible assets include the cost of acquiring existing customers ("customer lists") and the fair value assigned to non-compete agreements.

Customer lists are amortized on a straight line or accelerated basis over their estimated period of benefit, ranging from 8 to 23 years with a weighted average of approximately 9.4 years.

Non-compete agreements are amortized on a straight line basis over the term of the agreement, ranging from 3 to 5.3 years with a weighted average of approximately 4.7 years.

Customer lists are allocated at a branch level and are evaluated for impairment at a branch level when a triggering event occurs, in accordance with FASB ASC Topic 360-10-05.

If a triggering event occurs, the impairment loss to the customer list is generally the remaining unamortized customer list balance.

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

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

Intangible assets include the fair value of acquired customer lists and the fair value assigned to non-compete agreements.

Customer lists are amortized on a straight line or accelerated basis over their estimated period of benefit.

As of March 31, 2024, the useful life of customer lists ranged from 8 to 23 years with a weighted average of approximately 9.3 years.

Non-compete agreements are amortized on a straight line basis over the term of the agreement.

As of March 31, 2024, the useful life of non-compete agreements ranged from 3 to 5 years with a weighted average of approximately 4.6 years.

The fair value of the customer lists is based on a valuation model that utilizes the Company’s historical data to estimate the value of any acquired customer lists.

In a business combination, the remaining excess of the purchase price over the fair value of the tangible assets, customer list, and non-compete agreements is allocated to goodwill.

The branches the Company acquires are small, privately-owned branches, which do not have sufficient historical data to determine customer attrition.

2 unchanged sentences

This estimation method is re-evaluated periodically.

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.

In a business combination, the remaining excess of the purchase price over the fair value of the tangible assets, customer list, and non-compete agreements is allocated to goodwill.

The Company evaluates goodwill annually for impairment in the fourth quarter of the fiscal year using the market value-based approach.

11 unchanged sentences

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 less than twelve months.

Loans receivable are originated at prevailing market rates and have an average life of up to twelve months.

Given the short-term nature of these loans, they are continually repriced at current market rates.

6 unchanged sentences

Non-filing Insurance

Non-filing insurance premiums are charged on certain loans in lieu of recording and perfecting the Company's security interest in the assets pledged.

The premiums and recoveries are remitted to a third party insurance company and are not reflected in the accompanying Consolidated Financial Statements (see Note 8).

Claims paid by the third party insurance company result in a reduction to credit losses.

Non-filing insurance premiums are charged to certain customers on certain loans in lieu of recording and perfecting the Company's security interest in the assets pledged.

The premiums are passed through to a third-party insurance company, and any recoveries from customers after a receipt of an insurance payment are remitted to the third-party insurance company.

Neither non-filing insurance premiums nor recoveries are reflected in the accompanying Consolidated Statements of Operations (see Note 8).

Certain losses related to such loans, which are not recoverable through life, accident and health, property, or unemployment insurance claims, are reimbursed through non-filing insurance claims subject to policy limitations.

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

Paid claims are applied to customers' accounts, typically prior to charge-off, and are not reflected in net charge-offs.

Non-filing insurance claims do not impact our allowance for credit losses.

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

9 unchanged sentences

Diluted EPS reflects the potential dilution of securities that could share in the earnings of the Company.

Potential common stock included in the diluted EPS computation consists of stock options and restricted stock, which are computed using the treasury stock method.

Potential common stock included in the diluted EPS computation consists of Service Options and Restricted Stock, which are computed using the treasury stock method.

See Note 11 for the reconciliation of the numerators and denominators for basic and dilutive EPS calculations.

13 unchanged sentences

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’s stock repurchase program may be suspended or discontinued at any time.

The Company continues to believe stock repurchases are a viable component of the Company’s long-term financial strategy and an excellent use of excess cash when the opportunity arises.

As of March 31, 2023 our debt outstanding was $ 595.3 million, net of $ 3.5 million unamortized debt issuance costs related to the unsecured senior notes payable, and our shareholders' equity was $ 385.2 million resulting in a debt-to-equity ratio of 1.6 :1.0.

Additional share repurchases can be made subject to compliance with, among other things, applicable restricted payment covenants under the revolving credit facility and the Notes.

As of March 31, 2024, subject to further approval from our Board of Directors, we could repurchase approximately $ 30.1 million of shares under the terms of our debt facilities.

To the extent we have excess capital, we may repurchase stock, if appropriate and as authorized by our Board of Directors.

Concentration of Risk

The Company generally serves individuals with limited access to other sources of consumer credit such as banks, credit unions, other consumer finance businesses and credit card lenders.

Substantially all new customers are

required to submit a listing of personal property that will serve as collateral to secure the loan;

however, the Company does not rely on the value of such collateral in the loan approval process and generally does not perfect its security interest in that collateral.

During the year ended March 31, 2024, the Company operated in sixteen states in the United States.

7 unchanged sentences

Recently Adopted Accounting Standards

Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method

In March 2023, the FASB issued ASU No.

2023-02, Investments- Equity Method and Joint Venture (Topic 323) .

The amendments in this ASU permit reporting entities to elect to account for their tax equity investments, regardless of the tax credit program from which the income tax credits are received, using the proportional amortization method if certain conditions are met.

For public business entities, the amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years.

Early adoption is permitted in any interim period.

If an entity adopts the amendments in an interim period, it shall adopt them as of the beginning of the fiscal year that includes that interim period.

The amendments in this pronouncement must be applied on either a modified retrospective or retrospective basis.

The Company adopted this ASU as of April 1, 2022 using the modified retrospective approach.

The adoption of this ASU resulted in a $ 1.9 million cumulative adjustment to the opening balance of retained earnings.

Refer to Note 10 for further details.

Recently Issued Accounting Standards Not Yet Adopted

Troubled Debt Restructurings and Vintage Disclosures

2 unchanged sentences

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.

The adoption of ASU 2022-02 on April 1, 2023 expanded our write-off disclosures, but had no other impact on the Company’s Consolidated Financial Statements.

Recently Issued Accounting Standards Not Yet Adopted

Improvements to Reportable Segment Disclosures

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

The amendments are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

We are currently evaluating the impact the adoption of this update will have on our Consolidated Financial Statements.

The amendments should be applied retrospectively to all prior periods presented in the financial statements.

Management is currently evaluating this ASU to determine its impact on the Company's Consolidated Financial Statements and related disclosures.

Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , which modifies the rules on income tax disclosures to require entities to expand annual disclosures to 1) include specific categories in the rate reconciliation and additional information for reconciling items that meet a quantitative threshold and 2) disclose the amount of income taxes paid (net of refunds received) disaggregated by federal, state and foreign taxes.

ASU 2023-09 also requires entities to disclose income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign, and income tax expense (or benefit) from continuing operations disaggregated by federal, state and foreign, among other changes.

The amendments are effective for annual periods beginning after December 15, 2024.

Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance.

ASU 2023-09 should be applied on a prospective basis, but retrospective application is permitted.

Management is currently evaluating this ASU to determine its impact on the Company's Consolidated Financial Statements and related disclosures.

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.

9 unchanged sentences

Total gross loans $ 1,277,149,256 $ 1,390,015,568

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

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

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.

The Company uses current payment performance to assess the capability of the borrower to repay contractual obligations of the loan agreements as scheduled.

Current payment performance is monitored by management on a daily basis.

On an as needed basis, qualitative information may be taken into consideration if new information arises related to the customer’s ability to repay the loan.

The Company’s payment performance buckets are as follows:

current, 30-60 days past due, 61-90 days past due, 91 days or more past due.

All loans, except for TALs, that are greater than 90 days past due on a recency basis and not written off as of the reporting date are reserved for at 100% of the outstanding balance, net of a calculated Rehab Rate.

The weighted average Rehab Rate at March 31, 2024 and 2023 was 4.9 % and 7.1 %, respectively.

A loan is charged off within the allowance for credit losses in the month following when an account reaches 120 days past due on a recency basis, subject to certain exceptions.

Specifically, the Company’s customer accounts in a confirmed bankruptcy are charged off in the month after they reach 60 days past due on a recency basis.

The accounts of deceased or incarcerated customers are also charged off in the month after they reach 60 days past due on a recency basis, with the exception of deceased customers with credit life insurance.

Subsequent recoveries of amounts charged off, if any, are credited to the allowance.

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, 2024:

106 unchanged sentences

Total gross loans $ 1,390,015,568

The following table provides a breakdown of the Company’s gross charge-offs by fiscal year of origination for the years ended March 31, 2024 and 2023:

Gross Charge-offs by Origination

Origination Year

Loans Tax advance loans Total

2019 and prior

$ 17,352 $ — $ 17,352

2020 53,791 — 53,791

2021 301,162 — 301,162

2022 11,095,208 5,197 11,100,405

2023 132,745,783 1,287,512 134,033,295

2024 65,038,754 — 65,038,754

Total $ 209,252,050 $ 1,292,709 $ 210,544,759

Gross Charge-offs by Origination

Origination Year

Loans Tax advance loans Total

2018 and prior

$ 7,940 $ 7,940

2019 33,698 33,698

2020 313,337 313,337

2021 4,663,908 18,716 4,682,624

2022 193,167,575 2,473,341 195,640,916

2023 101,668,877 32,753 101,701,630

Total $ 299,855,335 $ 2,524,810 $ 302,380,145

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.

19 unchanged sentences

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

Management estimates an allowance for each Customer Tenure bucket by performing a historical migration analysis of loans in that bucket for the twelve most recent historical twelve-month migration periods, adjusted for seasonality.

All loans that are greater than 90 days past due on a recency basis and not written off as of the reporting date are reserved for at 100% of the outstanding balance, net of a calculated Rehab Rate.

Management considers whether current credit conditions might suggest a change is needed to the allowance for credit losses by monitoring trends in first pay success for new borrowers, 60-89 day delinquencies on a recency basis, FICO scores, percent of loan balances that are paying and percentage of gross loans that are acquired loans.

From time to time, the Company will make changes, as deemed appropriate, to our new borrower (NB) underwriting guidance.

As a result, management also considers whether a change in our NB underwriting might suggest a change is needed to the allowance for credit losses.

As of March 31, 2023, there were no current credit conditions or other factors considered significant enough to warrant a change to the allowance for credit losses.

Due to the short term nature of the loan portfolio, forecasted changes in macro-economic variables such as unemployment do not have a significant impact on loans outstanding at the end of a particular reporting period.

Therefore, management develops a reasonable and supportable forecast of losses by comparing the most recent 6-month loss curves as compared to historical loss curves to see if there are significant changes in borrower behavior that may indicate the historical migration rates should be adjusted.

If an adjustment is made as a result of the forecast, then the Company has elected to immediately revert back to historical experience past the forecast period.

Management considers whether current credit conditions might suggest a change is needed to the allowance for credit losses by monitoring trends in first pay success for NBs, 60-89 day delinquencies on a recency basis, FICO scores at origination, percent of loan balances that are paying and percentage of gross loans that are acquired loans.

If management determines that historical migration rates should be adjusted to reflect expected credit losses, a qualitative adjustment is made to reflect management's judgment regarding observable changes in recent or expected economic trends and conditions, portfolio composition, or other significant events or conditions that affect the current estimate.

The decrease in the allowance for credit losses from March 31, 2023 to March 31, 2024 was primarily due to lower expected loss rates on performing loans resulting from improvement in net charge-offs and a decrease in the loan portfolio.

Due to the short term nature of the loan portfolio, forecasted changes in macro-economic variables, such as unemployment levels, general inflation and commodity prices, typically do not have a significant impact on loans outstanding at the end of a particular reporting period, unless those changes are particularly severe and sudden in nature.

Therefore, management develops a reasonable and supportable forecast of losses by comparing the most recent six-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.

From time to time, the Company will also make changes, as deemed appropriate, to its NB underwriting guidance.

As a result, management also considers whether a change in its NB underwriting might suggest a change is needed to the allowance for credit losses.

If a change is determined necessary, then the Company has elected to immediately revert back to historical experience past the forecast period.

As of March 31, 2024 and 2023, there were no conditions or other factors considered significant enough to warrant a forecast adjustment.

The following table is an aging analysis on a recency basis at amortized cost of the Company’s gross loans receivable at March 31, 2024:

56 unchanged sentences

Once a loan moves to nonaccrual status, it remains in nonaccrual status until it is paid out, charged off or refinanced.

During the twelve months ended March 31, 2023 and March 31, 2022, the Company reversed a total of $ 36.5 million and $ 30.6 million, respectively of unpaid accrued interest against interest income.

The following table presents unpaid accrued interest reversed against interest income by Customer Tenure for the years ended March 31, 2024 and 2023:

Unpaid Accrued Interest Reversed Against Interest Income

Customer Tenure

0 to 5 months $ ( 5,337,159 ) $ ( 9,280,329 )

6 to 17 months ( 3,251,451 ) ( 5,790,516 )

18 to 35 months ( 3,381,665 ) ( 4,673,972 )

36 to 59 months ( 4,055,663 ) ( 4,596,229 )

60+ months ( 10,495,899 ) ( 12,191,199 )

Total $ ( 26,521,837 ) $ ( 36,532,245 )

The following table presents the amortized cost basis of loans on nonaccrual status as of March 31, 2024 and March 31, 2023, as well as interest income recognized on nonaccrual loans for the years ended March 31, 2024, 2023, and 2022:

1 unchanged sentence

Customer Tenure As of March 31, 2024 As of March 31, 2023 Interest Income

Fiscal 2023 Interest Income

Fiscal 2022 Interest Income

Interest Income

0 to 5 months $ 13,971,062 $ 15,781,494 $ 1,024,573 $ 2,032,098 $ 1,485,356

6 unchanged sentences

Total $ 70,989,174 $ 86,514,188 $ 13,189,848 $ 15,606,987 $ 12,657,746

As of March 31, 2023 and March 31, 2022, there were no loans receivable 61 days or more past due, not on nonaccrual status, and no loans receivable with no related allowance for credit losses.

As of March 31, 2024 and March 31, 2023, there were no loans receivable 61 days or more past due, not on nonaccrual status, and no loans receivable on nonaccrual status with no related allowance for credit losses.

The following is a summary of the changes in the allowance for credit losses for the years ended March 31, 2024, 2023, and 2022:

1 unchanged sentence

Balance at beginning of period $ 125,552,733 $ 134,242,862 $ 91,722,288

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

Provision for credit losses 156,973,220 259,463,199 186,207,341

3 unchanged sentences

Balance at end of period $ 102,962,811 $ 125,552,733 $ 134,242,862

1 The Company saw a significant increase in charge-offs in fiscal 2023 primarily due to the higher proportion of NBs at the beginning of the fiscal year.

Additionally, NBs originated in fiscal 2022 performed worse than expected as a result of the rapid rise in inflation during Q4 of fiscal 2022.

Fiscal 2024 saw a significant decrease in charge-offs primarily due to the Company's continued focus on credit quality and a conservative approach to its lending operations.

2 Recoveries for the year ended March 31, 2024 and March 31, 2023 include $ 19.3 million and $ 15.8 million, respectively, in proceeds related to the sale of charge-offs, which are included as a component of Provision for credit losses in the Consolidated Statements of Operations.

Of the $ 19.3 million in fiscal 2024, $ 5.7 million relates to bulk sales of charge-offs from prior periods and $ 13.6 million relates to recurring sales of charge-offs.

Of the $ 15.8 million in fiscal 2023, $ 8.4 million relates to bulk sales of charge-offs from prior periods and $ 7.4 million relates to recurring sales of charge-offs.

(3) Property and Equipment

16 unchanged sentences

Amortization Net Intangible Asset

Cost of customer lists $ 55,730,620 $ ( 40,950,350 ) $ 14,780,270 $ 55,730,620 $ ( 36,907,598 ) $ 18,823,022

Value assigned to non-compete agreements 10,528,143 ( 10,018,834 ) 509,309 10,528,143 ( 9,595,051 ) 933,092

Customer lists

$ 55,730,620 $ ( 44,796,996 ) $ 10,933,624 $ 55,730,620 $ ( 40,950,350 ) $ 14,780,270

Non-compete agreements

10,528,143 ( 10,392,034 ) 136,109 10,528,143 ( 10,018,834 ) 509,309

Total $ 66,258,763 $ ( 55,189,030 ) $ 11,069,733 $ 66,258,763 $ ( 50,969,184 ) $ 15,289,579

6 unchanged sentences

and an aggregate of $ 0.1 million for the years thereafter.

1 The Company saw a significant increase in charge-offs in fiscal 2023 primarily due to the higher proportion of new borrowers at the beginning of the current fiscal year.

Additionally, new borrowers originated in the prior fiscal year performed worse than expected due to macro-economic factors.

2 Recoveries for the year ended March 31, 2023 include $ 15.8 million in proceeds related to the sale of charge-offs, for which $ 8.4 million relates to bulk sales of charge-offs from prior periods and $ 7.4 million relates to recurring sales of charge-offs.

This gain on sale is included as a component of Provision for credit losses in the Consolidated Statements of Operations.

As of March 31, 2024 and 2023, goodwill was $ 7.4 million.

3 unchanged sentences

Revolving Credit Facility

On February 28, 2024, the Company amended its revolving credit agreement ("Twelfth Amendment") to (i) change the ratio of Net Income Available for Fixed Charges from not less than 2.25 to 1 to not less than 2.00 to 1 for the quarters ending March 31, 2024, June 30, 2024, September 30, 2024 and December 31, 2024 and (ii) change the ratio of Total Debt to Consolidated Adjusted Net Worth limit to 225 % for the remainder of the Amended and Restated Credit Agreement.

At March 31, 2024, the Company's senior notes payable consisted of a $ 580.0 million senior revolving credit facility, which has an accordion feature permitting the maximum aggregate commitments to increase to $ 730.0 million provided that certain conditions are met.

At March 31, 2023, $ 307.9 million was outstanding under the facility, not including a $ 300.0 thousand outstanding standby letter of credit related to workers compensation.

To the extent that the letter of credit is drawn upon, the disbursement will be funded by the credit facility.

There are no amounts due related to the letter of credit as of March 31, 2023.

The letter of credit expires on December 31, 2023;

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

At March 31, 2024, the Company had $ 223.4 million outstanding under the facility, not including $ 725.8 thousand in outstanding standby letters of credit which include (i) $ 300.0 thousand related to worker's compensation expiring on December 31, 2024 and (ii) $ 425.8 thousand related to the Company's investment in captive insurance expiring on April 12, 2024.

Both letters of credit automatically extend for one year on their expiration dates.

To the extent that a letter of credit is drawn upon, the disbursement will be funded by the credit facility.

There are no amounts due related to the letters of credit as of March 31, 2024.

Subject to a borrowing base formula, the Company may borrow at the rate of one month SOFR plus 0.10 % and an applicable margin of 3.5 %, with a minimum rate of 4.5 %.

5 unchanged sentences

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”).

On September 27, 2021, we issued $ 300 million in aggregate principal amount of 7.0 % senior notes due 2026.

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

1 unchanged sentence

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 prior to November 1, 2023, the Company could have redeemed 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.

In addition, at any time prior to November 1, 2023, the Company could have used 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.

During fiscal 2024, the Company repurchased and extinguished $ 15.7 million of its Notes, net of $ 0.2 million unamortized debt issuance costs related to the extinguished debt, on the open market for a reacquisition price of $ 14.1 million.

In accordance with ASC 470, the Company recognized the $ 1.8 million gain on extinguishment as a component of interest expense in the Company's Consolidated Statements of Operations.

During fiscal 2023, the Company repurchased and extinguished $ 9.0 million of its Notes, net of $ 0.1 million unamortized debt issuance costs related to the extinguished debt, on the open market for a reacquisition price of $ 7.2 million.

As a result, the Company recognized a $ 1.6 million and $ 1.8 million gain on extinguishment for the years ended March 31, 2024 and 2023, respectively.

In accordance with ASC 470, the Company recognized the gain on extinguishment as a component of interest expense in the Company's Consolidated Statements of Operations.

Debt Covenants

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

The agreement allows

the Company to incur subordinated debt that matures after the termination date for the revolving credit facility and that contains specified subordination terms, subject to limitations on amount imposed by the financial covenants under the agreement.

The agreement 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 (decreasing to 2.25 to 1.0 for the fiscal quarters ending March 31, 2023 and June 30, 2023, 2.0 to 1.0 for the fiscal quarter ending September 30, 2023, 2.25 to 1.0 for the fiscal quarter ending December 31, 2023);

(iii) a maximum collateral performance indicator of 26.0 % as of the end of each calendar month (increasing to 28 % for the calendar months ending October 31, 2022 through June 30, 2023);

and (iv) a minimum fixed charges coverage ratio of 1.25 to 1.0 for the fiscal quarter ended December 31, 2022, 1.15 to 1.0 for the fiscal quarters ending March 31, 2023 and June 30, 2023, 1.50 to 1.0 for the fiscal quarter ending September 30, 2023, 2.0 to 1.0 for the fiscal quarter ending December 31, 2023, and 2.75 to 1.0 for each fiscal quarter thereafter, where the ratio for the most recent four consecutive fiscal quarters must be at least 2.0 to 1.0 in order for the Company to declare dividends or purchase any class or series of its capital stock or other equity.

(ii) a maximum ratio of total debt to consolidated adjusted net worth of 2.25 to 1.0 for the fiscal quarter ended December 31, 2023 and each fiscal quarter thereafter);

(iii) a maximum collateral performance indicator of 26.0 % as of the end of each calendar month;

and (iv) a minimum fixed charges coverage ratio of 2.0 to 1.0 for the fiscal quarters ending December 31, 2023 through December 2024, and 2.25 to 1.0 for each fiscal quarter thereafter, where the ratio for the most recent four consecutive fiscal quarters (other than for the fiscal quarter ended September 30, 2023) must be at least 2.0 to 1.0 in order for the Company to declare dividends or purchase any class or series of its capital stock or other equity.

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.

13 unchanged sentences

2027 498,419,132

2027 290,860,000

Total future debt payments $ 498,419,132

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Accounting Policies and Matters Requiring Management's Judgment

The Company uses its effective annual or fourth quarter interest rate to determine the discount rate when evaluating leases under Topic 842.

The Company uses its effective annual interest rate to determine the discount rate when evaluating leases under Topic 842.

Management applies its effective interest rate to leases entered for the entirety of the subsequent year.

For example, fiscal 2022’s fourth quarter effective interest rate of 6.0 % was 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 2023.

Note that in fiscal 2023, it was determined most reasonable to use fiscal 2022's fourth quarter effective interest rate as the Notes was not effective until September 27, 2021.

For example, fiscal 2023’s annual effective interest rate of 7.1 % was 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 2024.

Based on its historical practice, the Company believes it is reasonably certain to exercise a given option associated with a given office space lease.

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During the second quarter of fiscal 2023, the lease terms associated with the Company's finance leases expired and the Company exercised its purchase option to acquire the IT equipment.

Because it was reasonably certain that the Company

would obtain the assets at the end of their lease terms, the right-of-use assets are amortized over the useful life of the assets, rather than over the lease terms.

Because it was reasonably certain that the Company would obtain the assets at the end of their lease terms, the ROU assets were amortized over the useful life of the assets, rather than over the lease terms.

As of March 31, 2024 and 2023, the Company had no finance leases.

The following table reports information about the Company's lease costs for the years ended March 31, 2024, 2023, and 2022:

1 unchanged sentence

Finance lease cost $ — $ 205,975 $ 427,619

Amortization of right-of-use assets 204,552 407,624 407,624

Amortization of ROU assets

— 204,552 407,624

Interest on lease liabilities — 1,423 19,995

10 unchanged sentences

Financing cash flows from finance leases — 80,067 505,286

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

Right-of-use assets obtained in exchange for new operating lease liabilities $ 16,924,511 $ 15,381,953 $ 12,482,167

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

ROU assets obtained in exchange for new finance lease liabilities

ROU assets obtained in exchange for new operating lease liabilities

$ 18,024,157 $ 16,924,511 $ 15,381,953

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

Weighted average remaining lease term — operating leases 6.8 years 7.1 years 7.3 years

1 unchanged sentence

Weighted-average discount rate — operating leases 6.3 % 6.0 % 6.1 %

The aggregate annual lease obligations as of fiscal year March 31, 2023, are as follows:

The aggregate annual lease obligations as of March 31, 2024, are as follows:

Operating Leases

2025 $ 22,595,008

7 unchanged sentences

Total discounted lease liability $ 81,920,865

The Company had no leases with related parties as of fiscal year March 31, 2023 or 2022.

The Company had no leases with related parties as of March 31, 2024 or 2023.

(10) Income Taxes

As discussed in Note 1, the Company adopted ASU 2023-02, Investments- Equity Method and Joint Ventures , on a modified retrospective basis effective April 1, 2022.

The Company adopted ASU 2023-02, Investments- Equity Method and Joint Ventures , on a modified retrospective basis in March 2023 with an effective date of April 1, 2022.

Prior to the adoption of this pronouncement, the Company recognized its HTC investment under the flow through method over the five-year investment period on a straight-line basis as a component of other expense.

With the adoption of this ASU, the Company now recognizes the investment of the HTC under the proportional amortization method which allows the investment to be recognized in proportion to the tax credit as a component of income tax expense.

During the current fiscal year, the Company recorded a cumulative adjustment of $ 1.9 million to the opening balance of retained earnings, which represents the net difference between the investment amortization under the two methods through the April 1, 2022 adoption date.

As of March 31, 2023, Investment in HTC was $ 23.0 million, which is included as a component of Other assets, net in the Consolidated Balance Sheets.

For the fiscal year ended March 31, 2023, the Company recognized net amortization of $ 2.1 million and $ 1.9 million of tax benefits from these investments in income tax expense and also recognized the $ 1.9 million of tax benefits from these investments in Income taxes payable in the Consolidated Statements of Cash Flows.

With the adoption of this ASU, the Company recognizes the investment of the HTC under the proportional amortization method which allows the investment to be recognized in proportion to the tax credit as a component of income tax expense.

In fiscal 2023, the Company recorded a cumulative adjustment of $ 1.9 million to the opening balance of retained earnings, which represents the net difference between the investment amortization under the two methods through the April 1, 2022 adoption date.

As of March 31, 2024 and 2023, investment in HTC was $ 24.8 million and $ 23.0 million, respectively, which is included as a component of Other assets, net and Accounts payable and accrued expenses in the Consolidated Balance Sheets.

The Company recognized net amortization from these investments of $ 8.8 million and $ 2.1 million for the years ended March 31, 2024 and 2023, respectively, in income tax expense.

The Company recognized tax benefits from these investments of $ 9.7 million and $ 1.9 million during the years ended March 31, 2024 and 2023, respectively, in income tax expense and in Income taxes payable in the Consolidated Statements of Cash Flows.

The Company did not recognize any non-tax related activity or have any significant modifications to its investments during the current fiscal year.

22 unchanged sentences

Uncertain tax positions ( 16,802 ) ( 1,151,234 ) ( 555,252 )

Expiration of capital loss carryforward

7,773,559 — —

Executive compensation limitation under Section 162(m) 62,686 732,504 1,918,618

Excess tax benefits related to equity compensation ( 347,806 ) ( 73,644 ) ( 3,237,682 )

Decrease in valuation allowance related to capital loss carryforward ( 7,773,559 ) — —

Prior year adjustments ( 1,135,270 ) 238,187 ( 51,728 )

Other, net 384,352 502,153 ( 11,994 )

19 unchanged sentences

Prepaid expenses ( 1,662,717 ) ( 1,766,564 )

Right-of-use asset ( 20,072,506 ) ( 21,273,281 )

( 19,619,875 ) ( 20,072,506 )

Other ( 727,270 ) ( 841,468 )

5 unchanged sentences

Approximately $ 1,000 of the state net operating loss carryforward will expire in 2025 with the remaining carryforward expiring between 2031 and 2042.

The valuation allowance for deferred tax assets increased by $ 0.5 million for the year ended March 31, 2023 when compared to March 31, 2022.

The valuation allowance for deferred tax assets decreased by $ 7.1 million for the year ended March 31, 2024 when compared to March 31, 2023.

The valuation allowance at March 31, 2024 and 2023 was $ 8.1 million and $ 15.2 million, respectively.

The valuation allowance against the total deferred tax assets as of March 31, 2023 consisted of $ 4 million from state net operating loss carryforwards in the amount of $ 63 million which expire from 2025 to 2041, 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 valuation allowance against the total deferred tax assets as of March 31, 2024 consisted of $ 4.6 million from state net operating loss carryforwards in the amount of $ 73.6 million which expire from 2025 to 2042, 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 $ 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.

8 unchanged sentences

Gross increases for tax positions of current year 105,531 129,146 153,754

Settlements with tax authorities — — ( 1,968,702 )

Lapse of statute of limitations ( 175,467 ) ( 927,037 ) ( 348,882 )

2 unchanged sentences

The Company’s continuing practice is to recognize interest and penalties related to income tax matters in income tax expense.

As of March 31, 2023, 2022, and 2021, the Company had $ 0.3 million, $ 0.6 million, and $ 1.2 million accrued for gross interest, respectively, of which $ 0.1 million, $ 0.2 million, and $ 0.3 million represented the current period expense for the periods ended March 31, 2023, 2022, and 2021.

As of March 31, 2024, 2023, and 2022, the Company had $ 0.3 million, $ 0.3 million, and $ 0.6 million accrued for gross interest, respectively, of which $ 0.1 million, $ 0.1 million, and $ 0.2 million represented the current period expense for the periods ended March 31, 2024, 2023, and 2022, respectively.

The Company is subject to U.S.

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The executives have no rights under the agreements beyond those of a general creditor of the Company.

For the years ended March 31, 2023, 2022, and 2021, contributions of $ 0.5 million, $ 0.5 million, and $ 0.6 million, respectively, were charged to expense related to the SERP.

For the years ended March 31, 2024, 2023, and 2022, contributions of $ 0.5 million, respectively, were charged to expense related to the SERP.

The unfunded liability, which is included as a component of accounts payable and accrued expenses in the Company's Consolidated Balance Sheets was $ 5.5 million and $ 5.7 million as of March 31, 2024 and 2023, respectively.

8 unchanged sentences

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.

The Company maintains the 2008 Plan, the 2011 Plan, and the 2017 Plan for the benefit of certain directors, officers, and key employees.

Under these plans, a total of 3,350,000 shares of authorized common stock have been reserved for issuance pursuant to grants approved by the Compensation Committee.

Stock options granted under these plans have a maximum duration of ten years , may be subject to certain vesting requirements, which are generally three to six years for officers, non-employee directors, and key employees, and are priced at the market value of the Company's common stock on the option's grant date.

At March 31, 2023 there were a total of 145,031 shares of common stock available for grant under the plans.

At March 31, 2024 there were a total of 242,540 shares of common stock available for grant under the 2017 Plan.

Stock-based compensation is recognized as provided under FASB ASC Topic 718-10 and FASB ASC Topic 505-50.

FASB ASC Topic 718-10 requires all share-based payments to employees, including grants of employee stock options, to be recognized as compensation expense over the requisite service period (generally the vesting period) in the consolidated financial statements based on their grant date fair values.

The Company has applied the Black-Scholes valuation model in determining the grant date fair value of the stock option awards.

Compensation expense is recognized only for those options expected to vest.

Stock-based compensation related to restricted stock is based on the number of shares expected to vest and the fair market value of the common stock on the grant date.

Stock-based compensation related to stock option awards is based on the number of shares expected to vest and the estimated fair value of the awards on the grant date using the the Black-Scholes valuation model.

Long-term Incentive Program and Non-Employee Director Awards

On October 15, 2018, the Compensation Committee and Board approved and adopted a new long-term incentive program that seeks to motivate and reward certain employees and to align management’s interest with shareholders’ by focusing executives on the achievement of long-term results.

On October 15, 2018, the Compensation Committee and Board approved and adopted a long-term incentive program that seeks to motivate and reward certain employees and to align management’s interest with shareholders’ by focusing executives on the achievement of long-term results.

The program is comprised of four components:

Service Options, Performance Options, Restricted Stock, and Performance Shares.

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

Pursuant to this program, in fiscal 2019, the Compensation Committee approved certain grants of Service Options, Performance Options, Restricted Stock and Performance Shares under the 2011 Plan and the 2017 Plan to certain employee directors, vice presidents of operations, vice presidents, senior vice presidents, and executive officers.

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

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

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

The Performance Shares are eligible to vest over the Performance Share Measurement Period 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.

2 unchanged sentences

(Percentage of Award)

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

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

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

The Service Options typically vest in three equal annual installments, beginning on the first anniversary of the grant date, subject to each respective employee’s continued employment at the Company through each applicable vesting date or otherwise provided under the terms of the applicable award agreement or applicable employment agreement.

The option price is equal to the fair market value of the common stock on the grant date and the Service Options shall have a 10 -year term.

17 unchanged sentences

The expected stock price volatility is based on the historical volatility of the Company’s stock for a period approximating the expected life.

The expected life represents the period of time that options are expected to be outstanding after the grant date.

The expected life represents the period of time that options are expected to be outstanding after the

The risk-free rate reflects the interest rate at grant date on zero coupon U.S.

11 unchanged sentences

Options exercisable, end of period 117,979 $ 108.47 4.93 $ 4,758,782

The aggregate intrinsic value reflected in the table above represents the total pre-tax intrinsic value (the difference between the closing stock price on March 31, 2023 and the exercise price, multiplied by the number of in-the-money options) that would have been received by option holders had all option holders exercised their options as of March 31, 2023.

The aggregate intrinsic value reflected in the table above represents the total pre-tax intrinsic value (the difference between the closing stock price on March 31, 2024 and the exercise price, multiplied by the number of in-the-money options that are currently exercisable) that would have been received by option holders had all option holders exercised their options as of March 31, 2024.

This amount will change as the stock's market price changes.

The total intrinsic value of options exercised during the years ended March 31, 2023, 2022, and 2021 was as follows:

The total intrinsic value and tax benefit of options exercised during the years ended March 31, 2024, 2023, and 2022 were as follows:

2024 2023 2022

Intrinsic value of options exercised $ 1,556,871 $ 493,418 $ 17,494,865

Tax benefit of options exercised

$ 120,557 $ 51,103 $ 2,454,039

The total fair value of stock options vested during the years ended March 31, 2024, 2023, and 2022 were $ 2,466,706 , $ 2,602,858 and $ 2,376,824 , respectively.

As of March 31, 2024, total unrecognized stock-based compensation expense related to non-vested stock options amounted to approximately $ 0.4 million, which is expected to be recognized over a weighted-average period of approximately 1.2 years.

Restricted Stock

During fiscal 2023, the Company granted 3,250 shares of restricted stock (which are equity classified), to certain vice presidents, senior vice presidents, executive officers, and non-employee directors with a grant date weighted average fair value of $ 129.85 per share.

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

During fiscal 2021, the Company granted 52,735 shares of restricted stock (which are equity classified) to certain executive officers, with a grant date weighted average fair value of $ 106.28 per share.

Compensation expense related to restricted stock is based on the number of shares expected to vest and the fair market value of the common stock on the grant date.

The Company recognized compensation expense of $ 6.6 million, $ 14.1 million, and $ 15.5 million for the years ended March 31, 2023, 2022, and 2021, respectively, which is included as a component of general and administrative expenses in the Company's Consolidated Statements of Operations.

During fiscal 2024, the Company granted 3,993 shares of restricted stock (which are equity classified), to certain vice presidents and senior vice presidents with a grant date weighted average fair value of $ 120.12 per share.

During fiscal 2023, the Company granted 3,250 shares of restricted stock (which are equity classified) to certain vice presidents with a grant date weighted average fair value of $ 129.85 per share.

During fiscal 2022, the Company granted 4,062 shares of restricted stock (which are equity classified) to certain non-employee directors with a grant date weighted average fair value of $ 188.38 per share.

The total fair value of restricted stock vested during the years ended March 31, 2024, 2023, and 2022 were $ 7,796,666 , $ 6,721,492 and $ 12,814,827 , respectively.

As of March 31, 2024, there was approximately $ 1.4 million of unrecognized compensation cost related to unvested restricted stock awards, which is expected to be recognized over the next 0.6 years based on current estimates.

9 unchanged sentences

Total Stock-Based Compensation

Total stock-based compensation included as a component of net income during the years ended March 31, 2023, 2022, and 2021 was as follows:

Total stock-based compensation included as a component of personnel expenses in the Company's Consolidated Statements of Operations during the years ended March 31, 2024, 2023, and 2022 was as follows:

2024 2023 2022

Stock-based compensation related to equity classified units:

Stock-based compensation related to stock options $ 2,442,309 $ 3,473,913 $ 3,804,674

Stock-based compensation (reversal) related to stock options 4

$ ( 3,754,209 ) $ 2,442,309 $ 3,473,913

Stock-based compensation related to restricted stock 2,071,122 6,610,526 14,109,082

Total stock-based compensation related to equity classified awards $ ( 1,683,087 ) $ 9,052,835 $ 17,582,995

4 During the second quarter of fiscal 2024, it was determined that the Performance Option performance target was no longer probable of being achieved.

As a result and in accordance with ASC 718, the Company reversed $ 4.9 million in previously recognized stock-based compensation related to these Performance Options.

(13) Acquisitions

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Acquired loans are valued at the net loan balance.

Given the short-term nature of these loans, generally twelve months , and that these loans are priced at current rates, management believes the net loan balances approximate their fair value.

Under CECL, acquired loans are included in the reserve calculations for all other loan types (excluding TALs).

Given the short-term nature of these loans, generally less than twelve months , and that these loans are priced at current rates, management believes the net loan balances approximate their fair value.

Under CECL, acquired loans are included in the reserve calculations for all loan types (excluding TALs).

Management includes recent acquisition activity compared to historical activity when considering reasonable and supportable forecasts as it relates to assessing the adequacy of the allowance for expected credit losses.

1 unchanged sentence

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

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

4 As a result of the asset purchases during fiscal 2023, the Company recorded a $ 5.2 million gain, net of $ 1.2 million income tax, which is included as a component of Insurance and other income, net in the Consolidated Statements of Operations.

The transactions resulted in a gain as the acquired loan portfolios were purchased at a discount.

As an immediate gain would be recognized on the net loans acquired if the cost below fair value was allocated, it was not determined appropriate to reduce the basis of the net loans acquired.

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

5 For the years ended March 31, 2024 and 2023, the Company recorded a $ 154.6 thousand gain, before income tax of $ 41.9 thousand, and a $ 5.2 million gain, before income tax of $ 1.2 million, respectively, on asset purchases, which are included as a component of Insurance and other income, net in the Consolidated Statements of Operations.

Because the loan portfolios were purchased at a discount and there were no other elements to the transactions that should be accounted for separately, the Company recognized a gain on the excess fair value.

As an immediate gain would be recognized on the acquired loans if the cost below fair value was allocated, it was not determined appropriate to reduce the basis of the acquired net loans receivable.

Customer lists are valued with a valuation model that utilizes the Company’s historical data to estimate the value of any acquired customer lists.

Customer lists are allocated at a branch level and are evaluated for impairment at a branch level when a triggering event occurs in accordance with FASB ASC Topic 360-10-05.

If a triggering event occurs, the impairment loss to the customer list is generally the remaining unamortized customer list balance.

In most acquisitions, the original fair value of the customer list allocated to an office is less than $100,000, and management believes that in the event a triggering event were to occur, the impairment loss to an unamortized customer list would be immaterial.

The results of all acquisitions have been included in the Company’s Consolidated Financial Statements since the respective acquisition date.

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The Company’s financial instruments consist of 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 less than twelve months.

Loans receivable are originated at prevailing market rates and have an average life of up to twelve months.

Given the short-term nature of these loans, they are continually repriced at current market rates.

The Company’s senior notes payable has a variable rate based on a margin over SOFR and reprices with any changes in SOFR.

The Company’s senior notes payable, consisting of a senior revolving credit facility, has a variable rate based on a margin over SOFR and reprices with any changes in SOFR.

The fair value of the senior unsecured notes payable is estimated based on quoted prices in markets that are not active.

27 unchanged sentences

(16) Commitments and Contingencies

Derivative Litigation

On September 25, 2020, a shareholder filed a derivative complaint in South Carolina state court, Paul Parshall v.

World Acceptance et al., against the Company as the nominal defendant and certain current and former directors and officers as defendants.

Pointing to the Company’s resolution with the SEC and DOJ of the Mexico investigation previously disclosed, the complaint alleges violations of South Carolina law, including breaches of fiduciary duties and corporate waste, and that the Company has suffered damages as a result of those alleged breaches.

The complaint seeks unspecified monetary damages from the individual defendants, equitable and/or injunctive relief, disgorgement of compensation from the individual defendants, and attorneys’ fees and costs.

Because the complaint is derivative in nature, it does not seek monetary damages from the Company.

However, the Company may be required to advance, and ultimately be responsible for, the legal fees and costs incurred by the individual defendants.

On April 19, 2023, the Court preliminarily approved a Stipulation and Agreement of Settlement dated March 31, 2023 (the “Stipulation”), by and among:

the plaintiff, derivatively on behalf of the Company; (ii) the individual defendants;

and (iii) the Company.

If approved, the Stipulation will result in a non-material payment by the Company.

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.

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.

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However, in light of the inherent uncertainties involved in such matters, an adverse outcome in one or more of these matters could materially and adversely affect the Company’s financial condition, results of operations or cash flows in any particular reporting period.

(17) Assets Held for Sale

In the fourth quarter of fiscal 2020 the Company moved its corporate headquarters from properties it owned outright in Greenville, South Carolina to leased office space in downtown Greenville, South Carolina.

Under ASC 360-10, the properties met the criteria for classification as held for sale as of March 31, 2020.

During the second quarter of fiscal 2021 the Company completed the sale of two of the three buildings held for sale, resulting in an aggregate loss of $ 37.0 thousand.

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

During the second quarter of fiscal 2022 the Company completed the sale of the last held for sale building, and recorded $ 39.0 thousand loss on sale which is included as a component of Insurance and other income, net in the Consolidated Statements of Operations.

As of March 31, 2023 and 2022, there were no assets held for sale.

(17) 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.

On May 15, 2024, the Board of Directors of the Company approved a share repurchase program authorizing the Company to repurchase up to $ 20.0 million of its outstanding common stock inclusive of any amount that remains available for repurchase under prior repurchase authorizations.

The timing and actual number of shares repurchased will depend on a variety of factors, including the stock price, corporate and regulatory requirements, available funds, alternative uses of capital, restrictions under the Revolving Credit Agreement, and other market and economic conditions.

The Company’s stock repurchase program may be suspended or discontinued at any time.

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

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 1, 2023 Date:

May 23, 2024 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, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended March 31, 2024, 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, 2023, 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 1, 2023 expressed an unqualified opinion on the effectiveness of the Company's internal control over financial reporting.

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, 2024, 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 23, 2024 expressed an unqualified opinion on the effectiveness of the Company's internal control over financial reporting.

Basis for Opinion

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We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

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As described in Notes 1 and 2 to the financial statements, the Company established an allowance for credit losses of $103.0 million as of March 31, 2024, 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 also considers whether a change in new borrower underwriting might suggest a change is needed to the allowance for credit losses.

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, specifically the reasonable and supportable forecasts and qualitative factors, included the following, among others:

• 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) review and approval of the appropriateness of the assumptions of the CECL model and (b) the management review and approval of the computed allowance for credit losses including the assessment of reasonable and supportable forecasts and qualitative factors.

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

• We evaluated reasonable and supportable forecasts and qualitative factors for reasonableness by comparing to internal source data.

• We evaluated the accuracy of the delinquency amounts used within the CECL model by testing the recency aging calculation on a sample of loans.

The Company’s CECL model estimates the allowance for credit losses for each Customer Tenure bucket using a historical migration analysis for the 12 most recent historical 12-month migration periods.

The Company’s CECL model also includes a reserve at 100% of the outstanding balance of all loans, except for TAL loans, greater than 90 days past due on a recency basis and not written off as of the reporting date, net of a calculated Rehab Rate.

Management considers whether current credit conditions might suggest a change is needed to the allowance for credit losses by monitoring trends in first pay success for new borrowers, 60-89 day delinquencies on a recency basis, FICO scores at origination, percent of loan balances that are paying and percentage of gross loans that are acquired loans as compared to metrics in the historical migration period.

If management determines that historical migration rates should be adjusted to reflect expected credit losses, a qualitative adjustment is made to reflect management’s judgment regarding observable changes in recent or expected economic trends and conditions, portfolio composition, or other significant events or conditions that affect the current estimate.

Management also utilizes a reasonable and supportable forecast by comparing the most recent six-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 developing reasonable and supportable forecasts and qualitative factors.

We identified the reasonable and supportable forecasts and qualitative factors of the allowance for credit losses as a critical audit matter as auditing management’s judgments of reasonable and supportable forecasts and qualitative factors required a high degree of auditor judgment and increased extent of audit effort.

Our audit procedures related to the Company’s estimate of reasonable and supportable forecasts and qualitative factors of the allowance for credit losses, included the following, among others:

• We obtained an understanding of the relevant controls related to the allowance for credit losses as of March 31, 2024, and tested such controls for design and operating effectiveness, in particular, those controls over (a) quarterly review and approval of the appropriateness of the key assumptions of the CECL model, and (b) the quarterly management review control providing approval of the allowance for credit losses, both of which cover the Company’s estimate of reasonable and supportable forecasts and qualitative factors.

• We evaluated the reasonableness of management’s methodology, including the relevance of data inputs utilized, in determining adjustments for qualitative factors and reasonable and supportable forecasts.

• We tested the completeness and accuracy of data inputs utilized by management in determining adjustments for qualitative factors and reasonable and supportable forecasts by comparing to internal and external source data and documents.

• We evaluated the reasonableness of management’s conclusions regarding adjustments for reasonable and supportable forecasts, and qualitative factors.

/s/ RSM US LLP

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In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of March 31, 2024, 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, 2023 and 2022 and the related consolidated statements of operations, shareholders’ equity and cash flows for each of the three years in the period ended March 31, 2023, and our report dated June 1, 2023 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, 2024 and 2023 and the related consolidated statements of operations, shareholders’ equity and cash flows for each of the three years in the period ended March 31, 2024, and our report dated May 23, 2024 expressed an unqualified opinion.

Basis for Opinion

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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