What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-06 compared with 2025-02-06 · 90 added, 116 removed, 178 unchanged (54% of the section changed)

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The following table sets forth certain information derived from the Company's Consolidated Statements of Operations and Consolidated Balance Sheets (unaudited), as well as operating data and ratios, for the periods indicated:

Three months ended December 31, Nine months ended December 31,

2024 2023 2024 2023

Three months ended June 30,

(Dollars in thousands)

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Operating income as a % of total revenue (4)

19.7 % 22.7 % 22.1 % 21.6 %

Loan volume (5)

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It does not include loans purchased through acquisitions.

Comparison of three months ended December 31, 2024 versus three months ended December 31, 2023

Gross loans outstanding decreased to $1.38 billion as of December 31, 2024, a 1.4% decrease from the $1.40 billion of gross loans outstanding as of December 31, 2023.

During the most recent quarter, gross loans outstanding increased sequentially 6.6%, or $85.6 million, from $1.30 billion as of September 30, 2024, compared to an increase of 1.5%, or $21.1 million, in the comparable quarter of the prior year.

During the most recent quarter, we saw improvement in borrowing from new, former and existing customers compared to the same quarter of fiscal year 2024.

Specifically, new, former and refinance loan customer volume during the quarter increased 22.6%, 13.9% and 1.5%, respectively, compared to the same quarter of fiscal year 2024.

Our customer base increased by 3.7% during the twelve-month period ended December 31, 2024, compared to a decrease of 2.4% for the comparable period ended December 31, 2023.

During the three months ended December 31, 2024 our unique borrowers increased by 6.2% compared to an increase of 2.4% during the three months ended December 31, 2023.

We continued to improve the gross yield to expected loss ratio for all new, former and refinance customer originations and will continue to monitor performance indicators and intend to adjust underwriting accordingly.

Net income for the three months ended December 31, 2024 decreased to $13.4 million, a 19.7% decrease from net income of $16.7 million for the same period of the prior year.

Comparison of three months ended June 30, 2025 versus three months ended June 30, 2024

Gross loans outstanding decreased to $1.26 billion as of June 30, 2025, a 0.8% decrease from the $1.27 billion of gross loans outstanding as of June 30, 2024, which is a substantial improvement from the 4.0% year over year decrease as of March 31, 2025.

During the most recent quarter, gross loans outstanding increased sequentially 3.2%, or $38.7 million, from $1.23 billion as of March 31, 2025, compared to a decrease of 0.2%, or $2.3 million, in the comparable quarter of the prior year.

During the most recent quarter, our new, former and current customer borrowing increased when comparing the same quarter of fiscal 2025.

Specifically, during the quarter, new, former and refinance customer loan volume increased 30.8%, 6.3% and 9.6%, respectively, compared to the same quarter of fiscal 2025.

Our customer base increased by 4.0% during the twelve-month period ended June 30, 2025, compared to a decrease of 2.6% for the comparable period ended June 30, 2024.

During the three months ended June 30, 2025 our unique borrowers increased by 0.8% compared to an increase of 0.5% during the three months ended June 30, 2024.

Net income for the three months ended June 30, 2025 decreased to $1.3 million, a 86.5% decrease from net income of $9.9 million for the same period of the prior year.

Operating income, which is revenue less provision for credit losses and general and administrative expenses, decreased by $11.1 million, or 49.0%, compared to the same period of the prior year.

Revenues for the three months ended December 31, 2024 increased by $0.9 million, or 0.6%, to $138.6 million from $137.7 million for the same period of the prior year.

Interest and fee income for the three months ended December 31, 2024 increased by $3.7 million, or 3.1%, from the same period of the prior year mostly due to an increase in interest yields.

Insurance and other income for the three months ended December 31, 2024 decreased by $2.8 million, or 14.9%, from the same period of the prior year.

Insurance income decreased by approximately $2.0 million, or 14.1%, during the three months ended December 31, 2024 when compared to the three months ended December 31, 2023.

Revenues for the three months ended June 30, 2025 increased by $2.9 million, or 2.3%, to $132.5 million from $129.5 million for the same period of the prior year.

Interest and fee income for the three months ended June 30, 2025 increased by $4.1 million, or 3.7%, from the same period of the prior year mostly due to an increase in interest yields.

Insurance and other income for the three months ended June 30, 2025 decreased by $1.2 million, or 6.6%, from the same period of the prior year.

Insurance income decreased by approximately $1.4 million, or 10.8%, during the three months ended June 30, 2025 when compared to the three months ended June 30, 2024.

Insurance commissions decreased primarily due to a decrease in loans where our insurance products are available to our customer.

The large loan portfolio decreased from 55.2% of the overall portfolio as of December 31, 2023, to 48.2% as of December 31, 2024.

Other income decreased by $0.8 million primarily due to lower motor club sales driven by fewer large loan customers.

The provision for credit losses increased $3.5 million, or 8.5%, to $44.1 million from $40.6 million when comparing the third quarter of fiscal 2025 to the third quarter of fiscal 2024.

The large loan portfolio decreased from 54.5% of the overall portfolio as of June 30, 2024, to 46.6% as of June 30, 2025.

Other income increased $0.2 million, or 3.4%, to $5.6 million in the first quarter of fiscal 2026, compared to $5.4 million in the first quarter of fiscal 2025.

Revenues from our tax return preparation business increased by $0.4 million, or 21.6%, in the first quarter of fiscal 2026, compared to the first quarter of fiscal 2025 due to an increase in our average preparation fee.

The provision for credit losses increased $5.1 million, or 11.2%, to $50.5 million from $45.4 million when comparing the first quarter of fiscal 2026 to the first quarter of fiscal 2025.

The table below itemizes the key components of the CECL allowance and provision impact during the quarter.

CECL Allowance and Provision (Dollars in millions) Q1 FY 2026 Q1 FY 2025 Difference Reconciliation

Beginning Allowance - September 30 $114.4 $128.9 $(14.5)

Beginning Allowance - March 31 $103.4 $103.0 $0.4

Change due to Growth $3.3 $(0.2) $3.5 $3.5

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Change due to 90 day past due $(3.3) $0.1 $(3.4) $(3.4)

Ending Allowance - December 31 $116.1 $121.1 $(5.0) $9.5

Ending Allowance - June 30 $109.1 $109.7 $(0.6) $(1.0)

Net Charge-offs $44.8 $38.7 $6.1 $6.1

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The change in allowance for the quarter plus net charge-offs for the quarter equals the provision for the quarter (see above reconciliation).

The provision was negatively impacted by loan growth and a smaller decrease in expected loss rates during the quarter.

Specifically, expected loss rates were negatively impacted by an increase in our 0-5 month customers, our riskiest customers, as a percentage of the portfolio during the current quarter.

Net charge-offs for the quarter decreased $6.0 million, from $48.4 million in the third quarter of fiscal 2024 to $42.4 million in the third quarter of fiscal 2025.

Net charge-offs as a percentage of average net loan receivables on an annualized basis decreased from 19.1% in the third quarter of fiscal 2024 to 17.2% in the third quarter of fiscal 2025.

The Company's allowance for credit losses as a percentage of net loans was 11.4% at December 31, 2024 compared to 11.8% at December 31, 2023.

Accounts that were 61 days or more past due on a recency basis decreased to 5.7% at December 31, 2024 compared to 5.8% at December 31, 2023.

We experienced an improvement in recency delinquency on accounts at least 90 days past due, improving from 3.7% at December 31, 2023, to 3.4% at December 31, 2024.

G&A expenses for the three months ended December 31, 2024 increased by $1.3 million, or 2.0%, from the corresponding period of the previous year.

As a percentage of revenues, G&A expenses increased from 47.8% during the three months ended December 31, 2023 to 48.5% during the three months ended December 31, 2024.

The provision was negatively impacted by growth, a seasonality adjustment that occurs in the first quarter of each fiscal year, and net charge-offs.

The improved quarter over quarter growth resulted in a $3.5 million increase in the provision.

The seasonality adjustment negatively impacted the provision by approximately $5.0 million.

As a reminder, the seasonality adjustment that occurs in the first quarter is removed in the December quarter due to the benefit of tax refunds that occurs in the March quarter.

There was also a $1.0 million increase in our tax advance loans reserve during the quarter.

This increase in reserve should be isolated to the first quarter.

Net charge-offs for the quarter increased $6.1 million, from $38.7 million in the first quarter of fiscal 2025 to $44.8 million in the first quarter of fiscal 2026.

Net charge-offs as a percentage of average net loan receivables on an annualized basis increased to 19.4% in the first quarter of fiscal 2026 from 16.4% in the first quarter of fiscal 2025.

The Company's allowance for credit losses as a percentage of net loans was 11.6% at each of June 30, 2025 and June 30, 2024.

Accounts that were 61 days or more past due on a recency basis decreased to 5.4% at June 30, 2025 compared to 5.6% at June 30, 2024.

We experienced an improvement in recency delinquency on accounts at least 90 days past due, improving from 3.4% at June 30, 2024, to 3.3% at June 30, 2025.

G&A expenses for the three months ended June 30, 2025 increased by $8.9 million, or 14.6%, from the corresponding period of the previous year.

As a percentage of revenues, G&A expenses increased from 47.4% during the three months ended June 30, 2024 to 53.1% during the three months ended June 30, 2025.

G&A expenses per average open branch increased by 17.6% when comparing the two three-month periods.

The change in G&A expense is explained in greater detail below.

Personnel expense totaled $41.1 million for the three months ended December 31, 2024, a $1.2 million, or 3.0%, increase over the three months ended December 31, 2023.

Salary expense increased approximately $0.4 million, or 1.1%, during the quarter ended December 31, 2024, compared to the quarter ended December 31, 2023.

Our headcount as of December 31, 2024, decreased 3.1% compared to December 31, 2023.

Benefit expense decreased approximately $0.7 million, or 8.8%, when comparing the quarterly periods ended December 31, 2024 and 2023.

Incentive expense increased $1.9 million in the third quarter of fiscal 2025 compared to the third quarter of fiscal 2024.

The increase in incentive expense is mostly due to an increase in bonuses paid.

Occupancy and equipment expense totaled $12.3 million for the three months ended December 31, 2024, a $0.2 million, or 1.7%, increase over the three months ended December 31, 2023.

Personnel expense totaled $45.8 million for the three months ended June 30, 2025, a $8.8 million, or 23.8%, increase over the three months ended June 30, 2024.

Salary expense increased approximately $1.1 million, or 3.6%, during the quarter ended June 30, 2025, compared to the quarter ended June 30, 2024.

Our headcount as of June 30, 2025 decreased 1.4% compared to June 30, 2024.

Benefit expense increased approximately $2.2 million, or 31.7%, when comparing the quarterly periods ended June 30, 2025 and 2024.

The increase in benefit expense is primarily the result of several large health claims experienced during the quarter.

Incentive expense increased $5.7 million in the first quarter of fiscal 2026 compared to the first quarter of fiscal 2025.

The increase in incentive expense is primarily due to

a $4.2 million increase in share based compensation expense and a $1.6 million increase in field bonus expense.

Share based compensation expense increased due to share grants in December of 2024 and June of 2025.

The prior year quarter also included a $1.8 million reversal of share based compensation expense related to the retirement of an officer.

Occupancy and equipment expense totaled $11.8 million for the three months ended June 30, 2025, a $0.4 million, or 3.1%, decrease over the three months ended June 30, 2024.

Occupancy and equipment expense is generally a function of the number of branches the Company has open throughout the period.

Advertising expense increased $0.7 million, or 19.5%, in the third quarter of fiscal 2025 compared to the third quarter of fiscal 2024 due to increased spending on customer acquisition programs.

Amortization of intangible assets totaled $0.9 million for the three months ended December 31, 2024, a $0.1 million, or 10.7%, decrease over the three months ended December 31, 2023.

Other expense totaled $8.5 million for the three months ended December 31, 2024, a $0.7 million, or 7.5%, decrease over the three months ended December 31, 2023.

Interest expense for the three months ended December 31, 2024 decreased by $0.4 million, or 3.4%, from the corresponding three months of the previous year.

For the three months ended June 30, 2025, the average open branches decreased 2.6% compared to the three months ended June 30, 2024.

Advertising expense increased $0.6 million, or 38.8%, in the first quarter of fiscal 2026 compared to the first quarter of fiscal 2025 due to increased spending on customer acquisition programs.

Amortization of intangible assets totaled $0.8 million for the three months ended June 30, 2025, a $0.2 million, or 17.4%, decrease over the three months ended June 30, 2024.

Other expense totaled $9.7 million for the three months ended June 30, 2025, a $0.1 million, or 0.8%, increase over the three months ended June 30, 2024.

Interest expense for the three months ended June 30, 2025 decreased by $0.1 million, or 1.4%, from the corresponding three months of the previous year.

The decrease in interest expense was due to a 7.2% decrease in the average debt outstanding from $491.6 million to $456.2 million and a 2.7% decrease in the effective interest rate from 8.6% to 8.3%.

The Company’s debt-to-equity ratio decreased from 1.4:1 at December 31, 2023 to 1.3:1 at December 31, 2024.

The Company’s debt-to-equity ratio decreased from 1.2:1 at June 30, 2024 to 1.1:1 at June 30, 2025.

The Company repurchased and extinguished $15.6 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 $15.5 million during the third quarter of fiscal 2025.

Other key return ratios for the three months ended December 31, 2024 included a 7.5% return on average assets and a return on average equity of 19.2% (both on a trailing 12-month basis), as compared to a 6.0% return on average assets and a return on average equity of 17.3% (both on a trailing 12-month basis) for the three months ended December 31, 2023.

The Company’s effective income tax rate increased to 16.4% for the three months ended December 31, 2024 compared to 14.6% for the corresponding period of the previous year.

The increase is primarily due to the effects of provision to return adjustments treated as discrete items in the prior year quarter, which were partially offset by pretax book earnings relative to the effects of various permanent items including a decrease in the disallowed executive compensation under Section 162(m) and the recognition of additional HTCs when compared to the prior year.

Comparison of nine months ended December 31, 2024 versus nine months ended December 31, 2023

Gross loans outstanding decreased to $1.38 billion as of December 31, 2024, a 1.4% decrease from the $1.40 billion of gross loans outstanding as of December 31, 2023.

Net income for the nine months ended December 31, 2024 increased to $45.5 million from the $42.3 million net income reported for the same period of the prior year.

Operating income, which is revenue less provision for credit losses and general and administrative expenses, decreased by $0.9 million, or 1.0%.

Revenues decreased by $14.4 million, or 3.5%, to $399.6 million during the nine months ended December 31, 2024 from $413.9 million for the same period of the prior year.

The decrease was primarily due to a decrease in average net loans outstanding.

Interest and fee income for the nine months ended December 31, 2024 decreased by $4.8 million, or 1.4%, from the same period of the prior year.

Net loans outstanding at December 31, 2024 decreased by 0.8% over the balance at December 31, 2023.

Average net loans outstanding decreased by 5.3% for the nine months ended December 31, 2024 compared to the nine-month period ended December 31, 2023.

Insurance commissions and other income for the nine months ended December 31, 2024 decreased by $9.6 million, or 15.6%, from the same period of the prior year.

Insurance commissions decreased by approximately $8.3 million, or 18.1%, during the nine months ended December 31, 2024 when compared to the nine months ended December 31, 2023.

Insurance commissions decreased primarily due to a decrease in loans where our insurance products are available to our customer.

Other income decreased by $1.3 million.

Sales of our motor club product decreased by $2.0 million as sales opportunities decreased with lower originations.

This decrease was offset by a $0.8 million increase in revenue from the Company's tax preparation.

The provision for credit losses increased $8.5 million, or 6.7%, to $136.2 million from $127.7 million when comparing the first three quarters of fiscal 2025 to the first three quarters of fiscal 2024.

Net charge-offs as a percentage of average net loans receivable on an annualized basis decreased from 17.4% in the first three quarters of fiscal 2024 to 17.1% in the first three quarters of fiscal 2025.

G&A expenses for the nine months ended December 31, 2024 decreased by $22.0 million, or 11.2%, from the corresponding period of the previous year.

As a percentage of revenues, G&A expenses decreased from 47.6% during the first nine months of fiscal 2024 to 43.8% during the first nine months of fiscal 2025.

G&A expenses per average open branch decreased by 10.1% when comparing the two nine-month periods.

The change in G&A expense is explained in greater detail below.

Personnel expense totaled $99.8 million for the nine months ended December 31, 2024, a $20.3 million, or 16.9%, decrease over the nine months ended December 31, 2023.

Salary expense decreased approximately $0.4 million, or 0.5%, when comparing the nine month periods ended December 31, 2024 and 2023.

Our headcount as of December 31, 2024, decreased 3.1% compared to December 31, 2023.

Benefit expense decreased approximately $2.7 million, or 10.7%, when comparing the nine month periods ended December 31, 2024 and 2023.

Incentive expense decreased $16.2 million, mostly due to the $18.5 million reversal of the expense associated with the $20.45 Performance Shares during the second quarter of fiscal 2025.

Occupancy and equipment expense totaled $36.8 million for the nine months ended December 31, 2024, a $0.3 million, or 0.9%, decrease over the nine months ended December 31, 2023.

Occupancy and equipment expense is generally a function of the number of branches the Company has open throughout the period.

Advertising expense totaled $8.9 million for the nine months ended December 31, 2024, a $0.2 million, or 2.4%, increase over the nine months ended December 31, 2023 due to increased spending on customer acquisition programs.

Amortization of intangible assets totaled $2.9 million for the nine months ended December 31, 2024, a $0.3 million, or 8.8%, decrease over the nine months ended December 31, 2023.

Other expense totaled $26.6 million for the nine months ended December 31, 2024, a $1.3 million, or 4.5% decrease over the nine months ended December 31, 2023.

Interest expense for the nine months ended December 31, 2024 decreased by $5.0 million, or 13.6%, from the corresponding nine months of the previous year.

The decrease in interest expense was due to a 12.6% decrease in the average debt outstanding, from $581.0 million to $507.5 million.

The Company repurchased and extinguished $49.3 million of its Notes, net of $0.4 million unamortized debt issuance costs related to the extinguished debt, on the open market for a reacquisition price of $48.1 million, during the nine months ended December 31, 2024.

Other key return ratios for the first nine months of fiscal 2025 included a 7.5% return on average assets and a return on average equity of 19.2% (both on a trailing 12-month basis), as compared to a 6.0% return on average assets and a return on average equity of 17.3% (both on a trailing 12-month basis) for the first nine months of fiscal 2024.

The Company’s effective income tax rate increased to 20.1% for the nine months ended December 31, 2024 compared to 19.9% for the corresponding period of the previous year.

The effective tax rate remained substantially unchanged from the prior year with the slight increase related to provision adjustments recorded as discrete items in the prior year.

Other key return ratios for the three months ended June 30, 2025 included a 7.7% return on average assets and a return on average equity of 19.0% (both on a trailing 12-month basis), as compared to a 7.1% return on average assets and a return on average equity of 18.9% (both on a trailing 12-month basis) for the three months ended June 30, 2024.

The Company’s effective income tax rate increased to 30.9% for the three months ended June 30, 2025 compared to 23.1% for the corresponding period of the previous year.

The Company finalized a settlement with various taxing authorities that resulted in an increase in the reserve under ASC 740-10 (unrecognized tax positions) which is treated as a discrete item in the current quarter, along with a decrease in pretax book income relative to an increase in disallowed executive compensation under Section 162(m) in the current quarter.

This was partially offset by the permanent tax benefit related to nonqualified stock option exercises and vesting of restricted stock treated as discrete items in the current quarter.

Regulatory Matters

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On October 5, 2017, the CFPB issued a final rule (the "Rule") imposing limitations on (i) short-term consumer loans, (ii) longer-term consumer installment loans with balloon payments, and (iii) higher-rate consumer installment loans repayable by a payment authorization.

The Rule originally required lenders originating short-term loans and longer-term balloon payment

loans to evaluate whether each consumer has the ability to repay the loan along with current obligations and expenses (“ability to repay requirements”);

The Rule originally required lenders originating short-term loans and longer-term balloon payment loans to evaluate whether each consumer has the ability to repay the loan along with current obligations and expenses (“ability to repay requirements”);

however, the ability to repay requirements was rescinded in July 2020.

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Constitution, reversing the judgment of the Court of Appeals, and remanding the cause for further proceedings.

In June 2024, the CFPB announced that the Rule would go into effect on March 30, 2025.

Such regulatory changes could have effects beyond those currently contemplated that could further materially and adversely impact our business and operations.

Unless rescinded or otherwise amended, the Company will have to comply with the Rule’s payment requirements if it continues to allow consumers to set up future recurring payments online for certain covered loans such that it meets the definition of having a “leveraged payment mechanism” under the Rule.

Subsequently, the U.S.

Court of Appeals for the Fifth Circuit set March 30, 2025 as the effective

date of the Rule.

On March 28, 2025, the CFPB announced that it will not prioritize enforcement or supervision of the remaining provisions of the Rule, which took effect on March 30, 2025.

Accordingly, the Company will have to comply with the Rule’s payment requirements if it continues to allow consumers to set up future recurring payments online for certain covered loans such that it meets the definition of having a “leveraged payment mechanism” under the Rule.

If the payment provisions of the Rule apply, the Company will have to modify its loan payment procedures to comply with the required notices and mandated timeframes set forth in the final rule.

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Pursuant to the terms of the Order, the CFPB has supervisory authority over the Company pursuant to section 1024(a)(1)(C) of the Consumer Financial Protection Act of 2010 until such time as the Order is terminated consistent with 12 C.F.R.

Importantly, while the Order establishes that the CFPB has supervisory authority over the Company, it does not constitute a finding that the Company has engaged in wrongdoing, nor does it require any immediate action on the part of the Company.

However, the outcome of such supervision could result in operational changes which could reduce our ability to operate profitably or increase compliance costs.

The supervision could also result in additional examinations, investigations, litigation, consent orders or administrative proceedings, which could require considerable resources, time, effort and attention from our management, and may result in operational changes, monetary penalties or declines in our stock price.

Importantly, on May 12, 2025, the CFPB withdrew the Order, indicating that the CFPB "is shifting its supervisory priorities to focus on pressing threats to consumers" and that supervision of the Company "is not consistent with these priorities."

See Part I, Item 1, “Business Government Regulation Federal legislation,” for a further discussion of these matters and the federal regulations to which the Company’s operations are subject and Part I, Item 1A, “Risk Factors,” in each case, in the Company’s fiscal 2025 Annual Report for more information regarding these regulatory and related risks.

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The Company has generally applied its cash flows from operations to fund its loan volume, fund acquisitions, repay long-term indebtedness, and repurchase its common stock.

Net cash provided by operating activities for the nine months ended December 31, 2024 was $163.2 million.

Net cash provided by operating activities for the three months ended June 30, 2025 was $58.2 million.

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

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

During the nine months ended December 31, 2024, the Company repurchased and extinguished $49.3 million of its Notes, net of $0.4 million unamortized debt issuance costs related to the extinguished debt, on the open market for a reacquisition price of $48.1 million.

During the three months ended June 30, 2025, the Company repurchased and extinguished $15.5 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 $15.5 million.

During fiscal 2025, the Company repurchased and extinguished $89.0 million of its Notes, net of $0.6 million unamortized debt issuance costs related to the extinguished debt, on the open market for a reacquisition price of $88.0 million.

The Company recognized a $50.0 thousand loss and a $0.5 million gain on extinguishment during the three months ended December 31, 2024 and 2023, respectively.

For each of the nine months ended December 31, 2024 and 2023, the Company recognized a $1.2 million gain on extinguishment.

For the three months ended June 30, 2025 and 2024, the Company recognized a $43.0 thousand loss and an $0.8 million gain on extinguishment, respectively.

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

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However, these covenants are subject to a number of important detailed qualifications and exceptions.

On July 22, 2025, the Company delivered an irrevocable notice of redemption to the holders of the Notes for the redemption of all of the outstanding Notes (the “Redemption”) on August 29, 2025 (the “Redemption Date”) at a redemption price equal to 101.75% of the principal amount of the Notes, plus accrued and unpaid interest, if any, to but not including, the Redemption Date.

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

However, our revolving credit facility and the Notes limit share repurchases to up to 50% of consolidated adjusted net income for the period commencing January 1, 2019.

As of December 31, 2024, subject to further approval from our Board of Directors, we could repurchase approximately $32.2 million of shares under the terms of our debt facilities (subject to further board approval).

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

The Company has a revolving credit facility with a syndicate of banks.

The revolving credit facility provides for revolving borrowings of up to the lesser of (a) the aggregate commitments under the facility and (b) a borrowing base, and it includes $725.8 thousand in outstanding standby letters of credit.

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%.

At December 31, 2024, the aggregate commitments under the revolving credit facility were $580.0 million.

However, as of June 30,2025, our revolving credit facility and the Notes limit share repurchases to up to 50% of consolidated adjusted net income for the period commencing January 1, 2019.

As of June 30, 2025, we could repurchase approximately $7.2 million of shares under the terms of our senior unsecured notes payable.

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

On July 22, 2025, the Company’s Board of Directors approved a new share repurchase program authorizing the Company to repurchase up to $100.0 million of its outstanding common stock inclusive of any amount that remains available for repurchase under prior repurchase authorizations.

As of June 30, 2025, the Company had a revolving credit facility with a syndicate of banks.

The revolving credit facility provided for revolving borrowings of up to the lesser of (a) the aggregate commitments under the facility and (b) a borrowing base, and it includes $889.7 thousand in outstanding standby letters of credit.

Subject to a borrowing base formula, the Company could 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%.

At June 30, 2025, the aggregate commitments under the revolving credit facility were $580.0 million.

The Company had $889.7 thousand in outstanding standby letters of credit which include (i) $300.0 thousand related to worker's compensation expiring on December 31, 2025 and (ii) $589.7 thousand related to the Company's investment in captive insurance expiring on April 12, 2026.

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

The borrowing base limitation is equal to the product of (a) the Company’s eligible finance receivables, less unearned finance charges, insurance premiums and insurance commissions applicable to such eligible finance receivables, and (b) an advance rate percentage that ranges from 70% to 80% based on a collateral performance indicator, as more completely described below.

Further, under the amended and restated revolving credit agreement, the administrative agent has the right to set aside reasonable reserves against the available borrowing base in such amounts as it may deem appropriate, including, without limitation, reserves with respect to certain regulatory events or any increased operational, legal, or regulatory risk of the Company and its subsidiaries.

For the nine months ended December 31, 2024 and fiscal year ended March 31, 2024, the Company’s effective interest rate, including the commitment fee and amortization of debt issuance costs, as it relates to the revolving credit facility was 9.7% annualized and 9.9%, respectively.

At December 31, 2024, the unused amount available under the revolving credit facility was $243.3 million.

Borrowings under the revolving credit facility mature on June 7, 2026.

The borrowing base limitation was equal to the product of (a) the Company’s eligible finance receivables, less unearned finance charges, insurance premiums and insurance commissions applicable to such eligible finance receivables, and (b) an advance rate percentage that ranges from 70% to 80% based on a collateral performance indicator, as more completely described below.

Further, under the amended and restated revolving credit agreement, the administrative agent had the right to set aside reasonable reserves against the available borrowing base in such amounts as it may deem appropriate, including, without limitation, reserves with respect to certain regulatory events or any increased operational, legal, or regulatory risk of the Company and its subsidiaries.

For the three months ended June 30, 2025 and fiscal year ended March 31, 2025, the Company’s effective interest rate, including the commitment fee and amortization of debt issuance costs, as it relates to the revolving credit facility was 8.7% annualized and 9.5%, respectively.

At June 30, 2025, the unused amount available under the revolving credit facility was $276.4 million.

Borrowings under the revolving credit facility had a maturity date of June 7, 2026.

The Company’s obligations under the revolving credit facility, together with treasury management and hedging obligations owing to any lender under the revolving credit facility or any affiliate of any such lender, are required to be guaranteed by each of the Company’s wholly-owned domestic subsidiaries.

The obligations of the Company and the subsidiary guarantors under the revolving credit facility, together with such treasury management and hedging obligations, are secured by a first-priority security interest in substantially all assets of the Company and the subsidiary guarantors.

The 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.

As of June 30, 2025, the agreement governing the Company’s revolving credit facility contains affirmative and negative covenants, including covenants that restrict the ability of the Company and its subsidiaries to, among other things, incur or guarantee indebtedness, incur liens, pay dividends and repurchase or redeem capital stock, dispose of assets, engage in mergers and consolidations, make acquisitions or other investments, redeem or prepay subordinated debt, amend subordinated debt documents, make changes in the nature of its business, and engage in transactions with affiliates.

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

The agreement's financial covenants include (i) a minimum consolidated net worth of $325 million on and after December 31, 2020;

(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;

The agreement's financial covenants include (i) a minimum consolidated net worth of $325 million;

(ii) a maximum ratio of total debt to consolidated adjusted net worth of 2.25 to 1.0 as of the end of each fiscal quarter;

(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 31, 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.

and (iv) a minimum fixed charges coverage ratio of 2.25 to 1.0 for each fiscal quarter, 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.

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

The Company was in compliance with these covenants at December 31, 2024 and does not believe that these covenants will materially limit its business and expansion strategy.

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

As of December 31, 2024, the Company's debt outstanding was $559.9 million, net of $1.4 million unamortized debt issuance costs related to the unsecured senior notes payable, and its shareholders' equity was $428.2 million resulting in a debt-to-equity ratio of 1.3:1.0.

The Company was in compliance with these covenants at June 30, 2025 and does not believe that these covenants will materially limit its business and expansion strategy.

As of June 30, 2025, the agreement contained 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 loans receivable 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.

On July 22, 2025, the Company terminated this credit facility and entered into a new revolving credit facility.

Refer to Note 13 to the Consolidated Financial Statements for information regarding the Company’s Revolving Credit Agreement.

As of June 30, 2025, the Company's debt outstanding was 471.7 million, net of $0.8 million unamortized debt issuance costs related to the unsecured senior notes payable, and its shareholders' equity was $427.9 million resulting in a debt-to-equity ratio of 1.1:1.0.

Management will continue to monitor the Company's debt-to-equity ratio and is committed to maintaining a debt level that will allow the Company to continue to execute its business objectives, while not putting undue stress on its consolidated balance sheet.

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Share Repurchase Program

On May 15, 2024, the Board of Directors authorized the Company to repurchase up to $20.0 million of the Company’s outstanding common stock, inclusive of the amount that remained available for repurchase under prior repurchase authorizations.

As of December 31, 2024, the Company had $9.0 million in aggregate remaining repurchase capacity under its current share repurchase program.

On April 30, 2025, the Board of Directors authorized the Company to repurchase up to $20.0 million of the Company’s outstanding common stock, inclusive of the amount that remained available for repurchase under prior repurchase authorizations.

As of June 30, 2025, the Company had $7.0 million in aggregate remaining repurchase capacity under its current share repurchase program.

On July 22, 2025, the Company’s Board of Directors approved a share repurchase program authorizing the Company to repurchase up to $100.0 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.

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Our first priority is to ensure we have enough capital to fund loan growth.

As of June 30, 2025, we could repurchase approximately $7.2 million of shares under the terms of our senior unsecured notes payable.

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

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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-Q

Item 2. Management’s Discussion and Analysis