What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-06 compared with 2025-08-06 · 171 added, 114 removed, 154 unchanged (65% of the section changed)

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cybersecurity threats or incidents, including the potential or actual misappropriation of assets or sensitive information, corruption of data or operational disruption and the costs of the associated response thereto;

our dependence on debt and the potential impact of limitations in the Company’s amended revolving credit facility or other impacts on the Company's ability to borrow money on favorable terms, or at all;

our dependence on debt and the potential impact of limitations in the Company’s credit facilities or other impacts on the Company's ability to borrow money on favorable terms, or at all;

the timing and amount of revenues that may be recognized by the Company;

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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 June 30,

Three months ended September 30, Six months ended September 30,

2025 2024 2025 2024

(Dollars in thousands)

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Operating income as a % of total revenue (4)

9.4 % 29.2 % 9.1 % 23.4 %

Loan volume (5)

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It does not include loans purchased through acquisitions.

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.

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

Gross loans outstanding increased to $1.32 billion as of September 30, 2025, a 1.5% increase from the $1.30 billion of gross loans outstanding as of September 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 4.0%, or $51.2 million, from $1.26 billion as of June 30, 2025, compared to an increase of 1.7%, or $21.1 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 40.4%, 4.1% and 1.0%, 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.

Our customer base increased by 6.2% during the twelve-month period ended September 30, 2025, compared to a decrease of 0.1% for the comparable period ended September 30, 2024.

During the three months ended September 30, 2025 our unique borrowers increased by 5.8% compared to an increase of 3.6% during the three months ended September 30, 2024.

The net loss for the three months ended September 30, 2025 or decrease of $1.9 million, is a 108.8% decrease from net income of $22.1 million for the same period of the prior year.

The significant decrease is the result of an $18.5 million reversal of share based compensation expense in the prior year associated with the forfeiture of the shares granted in the second tranche of our performance-based share plan that resulted in negative share based compensation expense of $17.9 million for the prior year

The current quarter included $6.1 million in share based compensation expense, a $24.0 million increase compared to the same quarter of the prior year, mainly due to the prior year reversal noted above.

The current quarter also included a $3.7 million expense for the early redemption of our long-term notes, which includes a $3.0 million early call penalty and a $0.7 million write-off of the remaining unamortized debt issuance costs.

The result of operations was also negatively impacted by an increase in provision for credit losses, largely related to our new loan growth;

however, we expect solid returns on our fiscal 2025 originations given early payment performance and yield.

Operating income, which is revenue less provision for credit losses and general and administrative expenses, decreased by $25.7 million, or 67.0%, compared to the same period of the prior year.

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.

Revenues for the three months ended September 30, 2025 increased by $3.1 million, or 2.3%, to $134.5 million from $131.4 million for the same period of the prior year.

Interest and fee income for the three months ended September 30, 2025 increased by $5.1 million, or 4.4%, from the same period of the prior year due to an increase in outstanding balances and interest yields.

Insurance and other income for the three months ended September 30, 2025 decreased by $2.0 million, or 11.4%, from the same period of the prior year.

Insurance income decreased by approximately $0.4 million, or 3.6%, during the three months ended September 30, 2025 when compared to the three months ended September 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 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 large loan portfolio decreased from 52.1% of the overall portfolio as of September 30, 2024, to 44.6% as of September 30, 2025.

Other income decreased $1.5 million, or 30.0%, to $3.6 million in the second quarter of fiscal 2026, compared to $5.2 million in the second quarter of fiscal 2025.

Other income primarily decreased due to a $1.2 million decrease in tax preparation income due to a timing difference in income recognized year over year.

The provision for credit losses increased $3.1 million, or 6.8%, to $49.8 million from $46.7 million when comparing the second quarter of fiscal 2026 to the second 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) Q2 FY 2026 Q2 FY 2025 Difference Reconciliation

Beginning Allowance - March 31 $103.4 $103.0 $0.4

Beginning Allowance - June 30 $109.1 $109.7 $(0.6)

Change due to Growth $4.3 $1.8 $2.5 $2.5

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Change due to 90 day past due $1.5 $2.2 $(0.7) $(0.7)

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

Ending Allowance - September 30 $117.8 $114.5 $3.3 $3.9

Net Charge-offs $41.1 $41.9 $(0.8) $(0.8)

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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 growth, a seasonality adjustment that occurs in the first quarter of each fiscal year, and net charge-offs.

The provision was negatively impacted by growth in new customers during the quarter.

The improved quarter over quarter growth resulted in a $2.5 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.

The growth was largely from new customers which resulted in an increase of 0-5 month customers as a percent of the portfolio from 7.2% as of June 30, 2025 to 8.6% as of September 30, 2025.

This growth in 0-5 month customers and the higher risk associated with them also led to an increase in the overall expected loss rates of the portfolio.

Net charge-offs for the quarter decreased $0.8 million, from $41.9 million in the second quarter of fiscal 2025 to $41.1 million in the second quarter of fiscal 2026.

Net charge-offs as a percentage of average net loan receivables on an annualized basis decreased to 17.1% in the second quarter of fiscal 2026 from 17.6% in the second quarter of fiscal 2025.

The Company's allowance for credit losses as a percentage of net loans was 12.1% at each of September 30, 2025, compared to 12.0% at September 30, 2024.

Accounts that were 61 days or more past due on a recency basis increased to 5.8% at September 30, 2025 compared to 5.6% at September 30, 2024.

Recency delinquency on accounts at least 90 days past due increased from 3.4% at September 30, 2024, to 3.5% at September 30, 2025.

Recency delinquency on accounts 0 to 60 days past due decreased from 22.5% at September 30, 2024, to 22.3% at September 30, 2025.

G&A expenses for the three months ended September 30, 2025 increased by $25.6 million, or 55.3%, from the corresponding period of the previous year.

As a percentage of revenues, G&A expenses increased from 35.3% during the three months ended September 30, 2024 to 53.5% during the three months ended September 30, 2025.

G&A expenses per average open branch increased by 60.2% when comparing the two three-month periods.

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

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.

Personnel expense totaled $48.0 million for the three months ended September 30, 2025, a $26.2 million, or 120.6%, increase over the three months ended September 30, 2024.

Salary expense increased approximately $1.6 million, or 5.2%, during the quarter ended September 30, 2025, compared to the quarter ended September 30, 2024.

Our headcount as of September 30, 2025 increased 5.1% compared to September 30, 2024.

Benefit expense decreased approximately $0.7 million, or 8.3%, when comparing the quarterly periods ended September 30, 2025 and 2024.

Incentive expense increased $25.4 million in the second quarter of fiscal 2026 compared to the second quarter of fiscal 2025.

The increase in incentive expense is primarily due to a $24.0 million increase in share based compensation 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.

The prior year quarter also included a $18.5 million reversal of share based compensation expense associated with the forfeiture of the shares granted in the second tranche of our performance-based share plan.

Occupancy and equipment expense totaled $11.8 million for the three months ended September 30, 2025, a $0.5 million, or 4.2%, decrease over the three months ended September 30, 2024.

Advertising expense decreased $0.7 million, or 23.1%, in the second quarter of fiscal 2026 compared to the second quarter of fiscal 2025 due to increased efficiency in our customer acquisition programs.

Amortization of intangible assets totaled $0.8 million for the three months ended September 30, 2025, a $0.2 million, or 15.7%, decrease over the three months ended September 30, 2024.

Other expense totaled $9.2 million for the three months ended September 30, 2025, a $0.7 million, or 8.2%, increase over the three months ended September 30, 2024.

Interest expense for the three months ended September 30, 2025 increased by $3.9 million, or 37.2%, from the corresponding three months of the previous year.

The Company repurchased and canceled the remaining $169.8 million of its previously issued Notes for a purchase price of $172.8 million during the second quarter of fiscal 2026.

Interest expense primarily increased due to a $3.0 million early call penalty on our Notes, and a $0.7 million write-off of the remaining unamortized debt issuance costs.

It was also impacted by a 3.7% increase in the average debt outstanding for the quarter, partially offset by a 4.8% decrease in the effective interest rate from 8.7% to 8.2%.

The average debt outstanding increased from $496.0 million to $514.4 million when comparing the quarters ended September 30, 2024 and 2025.The Company’s debt-to-equity ratio increased from 1.2:1 at September 30, 2024 to 1.6:1 at September 30, 2025.

Other key return ratios for the three months ended September 30, 2025 included a 5.6% return on average assets and a return on average equity of 14.0% (both on a trailing 12-month basis), as compared to a 7.8% return on average assets and a return on average equity of 20.1% (both on a trailing 12-month basis) for the three months ended September 30, 2024.

The Company’s effective income tax rate was a negative 15.4% for the three months ended September 30, 2025 compared to 20.8% 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 the effects of various permanent items including an increase in disallowed executive compensation under Section 162(m) in the current quarter.

Comparison of six months ended September 30, 2025 versus six months ended September 30, 2024

Gross loans outstanding increased to $1.32 billion as of September 30, 2025, a 1.5% increase from the $1.30 billion of gross loans outstanding as of September 30, 2024.

Net loss for the six months ended September 30, 2025 decreased to $0.6 million from the $32.1 million net income reported for the same period of the prior year.

Operating income (revenue less provision for credit losses and general and administrative expenses) decreased by $36.8 million, or 60.3%.

The significant decrease is the result of an $18.5 million reversal of share based compensation expense in the corresponding period of the previous year associated with the forfeiture of the shares granted in the second tranche of our performance-based share plan that resulted in negative share based compensation expense of $19.0 million.

Share based compensation expense for the six months ended September 30, 2025 was $9.2 million, a $28.2 million increase compared to the same period of the prior year, mainly due to the prior year reversal noted above.

The current six month period ended September 30, 2025 also included a $3.7 million expense for the early redemption of our long-term notes, which includes a $3.0 million early call penalty and a $0.7 million write-off of the remaining unamortized debt issuance costs.

Net loss was also negatively impacted by an increase in provision for credit losses, largely related to our new loan growth;

however, we expect solid returns on our fiscal 2025 originations given early payment performance and yield.

Revenues increased by $6.0 million, or 2.3%, to $266.9 million during the six months ended September 30, 2025 from $260.9 million for the same period of the prior year.

The increase was primarily due to an increase in outstanding balances and interest yields.

Interest and fee income for the six months ended September 30, 2025 increased by $9.2 million, or 4.1%, from the same period of the prior year.

Net loans outstanding at September 30, 2025 increased by 2.0% over the balance at September 30, 2024.

Average net loans outstanding decreased by 0.5% for the six months ended September 30, 2025 compared to the six-month period ended September 30, 2024.

Insurance commissions and other income for the six months ended September 30, 2025 decreased by $3.2 million, or 9.0%, from the same period of the prior year.

Insurance commissions decreased by approximately $1.8 million, or 7.3%, during the six months ended September 30, 2025 when compared to the six months ended September 30, 2024.

Other income decreased by $1.4 million, primarily due to a $0.8 million decrease in tax preparation income due to a timing difference in income recognized year over year.

The provision for credit losses increased $8.3 million, or 9.0%, to $100.4 million from $92.1 million when comparing the first two quarters of fiscal 2026 to the first two quarters of fiscal 2025.

Net charge-offs as a percentage of average net loans receivable on an annualized basis increased from 17.0% in the first two quarters of fiscal 2025 to 18.3% in the first two quarters of fiscal 2026.

G&A expenses for the six months ended September 30, 2025 increased by $34.6 million, or 32.1%, from the corresponding period of the previous year.

As a percentage of revenues, G&A expenses increased from 41.3% during the first six months of fiscal 2025 to 53.3% during the first six months of fiscal 2026.

G&A expenses per average open branch increased by 36.0% when comparing the two six-month periods.

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

Personnel expense totaled $93.8 million for the six months ended September 30, 2025, a $35.0 million, or 59.6%, increase over the six months ended September 30, 2024.

Salary expense increased approximately $2.7 million, or 4.4%, when comparing the two six month periods ended September 30, 2025 and 2024.

Our headcount as of September 30, 2025, increased 5.1% compared to September 30, 2024.

Benefit expense increased approximately $1.5 million, or 10.0%, when comparing the six month periods ended September 30, 2025 and 2024.

Incentive expense increased $31.2 million when comparing the six month periods ended September 30, 2025 and 2024.

The increase in incentive expense is primarily due to a $28.2 million increase in share based compensation expense.

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

The prior year period also included a $18.5 million reversal of share based compensation expense associated with the forfeiture of the shares granted in the second tranche of our performance-based share plan.

Occupancy and equipment expense totaled $23.6 million for the six months ended September 30, 2025, a $0.9 million, or 3.7%, decrease over the six months ended September 30, 2024.

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

For the three months ended 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 1.2:1 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 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.

For the six months ended September 30, 2025, the average occupancy and equipment expense per branch totaled $23.2 thousand, a $0.2 thousand, or 0.8% decrease when compared to the six months ended September 30, 2024.

Advertising expense totaled $4.5 million for the six months ended September 30, 2025, remaining relatively flat compared to the six months ended September 30, 2024.

Amortization of intangible assets totaled $1.6 million for the six months ended September 30, 2025, a $0.3 million, or 16.6%, decrease over the six months ended September 30, 2024.

Other expense totaled $18.9 million for the six months ended September 30, 2025, an $0.8 million, or 4.2% increase over the six months ended September 30, 2024.

Interest expense for the six months ended September 30, 2025 increased by $3.7 million, or 18.5%, from the corresponding six months of the previous year.

The Company repurchased and canceled the remaining $169.8 million of its previously issued bonds for a purchase price of $172.8 million during the second quarter of fiscal 2026.

Interest expense primarily increased due to a $3.0 million early call penalty on our long-term notes, and a $0.7 million write-off of the remaining unamortized debt issuance costs.

This increase was partially offset by a 1.3% decrease in the average debt outstanding, from $493.7 million to $487.1 million and a 4.2% decrease in the effective interest rate from 8.6% to 8.3%.

Other key return ratios for the first six months of fiscal 2026 included a 5.6% return on average assets and a return on average equity of 14.0% (both on a trailing 12-month basis), as compared to a 7.8% return on average assets and a return on average equity of 20.1% (both on a trailing 12-month basis) for the first six months of fiscal 2025.

The Company’s effective income tax rate was 331.8% for the six months ended September 30, 2025 compared to 21.5% 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 period, along with a decrease in pretax book income relative to the effects of various permanent items including an increase in disallowed executive compensation under Section 162(m) in the current period.

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 period.

Regulatory Matters

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Subsequently, the U.S.

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

date of the Rule.

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.

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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 three months ended June 30, 2025 was $58.2 million.

Net cash provided by operating activities for the six months ended September 30, 2025 was $106.8 million.

As of September 30, 2025, the Company's debt outstanding was $584.6 million and its shareholders' equity was $365.6 million resulting in a debt-to-equity ratio of 1.6:1.0.

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.

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.

As of September 30, 2025, the Company had two credit facilities:

the Revolving Credit Facility and the Warehouse Facility.

The Revolving Credit Facility provides, among other things, aggregate commitments of the Lenders of $640.0 million, with an accordion feature that can increase the aggregate commitments by $150.0 million (for a total commitment, if the full accordion is borrowed, of $790.0 million).

The Warehouse Facility provides for a revolving $175.0 million warehouse facility and is secured by certain consumer loan receivables that were directly originated by certain of the Company’s subsidiaries.

Borrowings under the Warehouse Facility have an expected maturity date of September 29, 2027.

As of September 30, 2025, no loans receivable were pledged and no borrowings occurred under the Warehouse Facility.

As of September 30, 2025, the Company may borrow at the rate of one-month SOFR plus 0.11448% and an applicable margin of 3.00%, with a minimum rate of 4.00%.

The Credit Agreement has a commitment fee of 0.50% per annum on the unused portion of the commitment.

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% under the Revolving Credit Agreement.

At September 30, 2025, the aggregate commitments under the Revolving Credit Agreement were $640.0 million.

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 equal to the sum of, for the Company and certain of its subsidiaries (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 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.

Further, under the 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 six months ended September 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 Agreement was 8.2% annualized and 9.5%, respectively.

At September 30, 2025, the unused amount available under the Revolving Credit Facility was $54.5 million.

Borrowings under the Revolving Credit Facility have a maturity date of July 22, 2028.

The Company’s obligations under the Revolving Credit Agreement, together with treasury management and hedging obligations owing to any lender under the Revolving Credit Agreement or any affiliate of any such lender, are required to be guaranteed by each of the Company’s wholly-owned domestic subsidiaries (other than special purpose subsidiaries).

The obligations of the Company and the subsidiary guarantors under the Revolving Credit Agreement, 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 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.

Additional share repurchases can be made subject to compliance with, among other things, applicable restricted payment covenants under the Revolving Credit Agreement.

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

As of September 30, 2025, subject to further approval from our Board of

Directors, we could repurchase approximately $77.0 million of shares under the terms of our Revolving Credit Agreement.

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

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

Except as otherwise discussed in (i) this report including, but not limited to, any discussions in Part II, Item 1A, "Risk Factors" in this Quarterly Report on Form 10-Q and (ii) Part I, Item 1A, "Risk Factors" in the Company's fiscal 2025 Annual Report (as supplemented by any subsequent disclosures in information the Company files with or furnishes to the SEC from time to time), management is not currently aware of any trends, demands, commitments, events or uncertainties that it believes will or could result in, or are or could be reasonably likely to result in, any material adverse effect on the Company’s liquidity.

Revolving Credit Facility

The Revolving Credit Agreement contains a number of affirmative and negative covenants that, among other things, restrict our ability to incur liens, incur indebtedness, pay dividends and repurchase or redeem capital stock, make certain restricted payments, merge or consolidate, dispose of assets, 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 of the Revolving Credit Agreement and that contains specified subordinated terms, subject to limitations on amount imposed by the financial covenants under the Revolving Credit Agreement.

In addition, the Revolving Credit Agreement requires the Company to (i) keep and maintain a Consolidated Net Worth of $325.0 million, (ii) have a ratio of Net Income Available for Fixed Charges to Fixed Charges of not less than 2.25 to 1.00, (iii) not permit the aggregate unpaid principal amount of Total Debt to exceed 225.0% of Consolidated Adjusted Net Worth, and (iv) maintain an Asset Quality Indicator (Consolidated) of less than or equal to 26.0%.

Each of the capitalized terms used and not defined herein have the meanings set forth in the Revolving Credit Agreement.

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

The Revolving Credit Agreement also contains customary events of default (subject to certain materiality thresholds and cure periods), including among others, (a) non-payment, (b) non-compliance with covenants, (c) a breach of a representation or warranty, (d) an insolvency event involving the Company, (e) a change in control of the Company, (f) failure of the Company to maintain certain financial covenants, (g) cross-default to other debt, (h) invalidity of subordination provisions of subordinated debt, (i) the occurrence of certain regulatory events (including an order or judgment entered against the Company with respect to the financial receivables generally or any category of receivables that is material to the business) 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, and (j) payment defaults resulting in acceleration of securitizations or warehouse facilities that remain continuing for more than 30 days.

Warehouse Facility

The Credit Agreement contains affirmative and negative covenants, including covenants that generally restrict the ability of the Company and its subsidiaries to, among other things, incur or guarantee indebtedness, incur liens, pay dividends and repurchase or redeem capital stock, engage in mergers and consolidations, make acquisitions or other investments, or fund benefit plans.

The Company’s financial covenants under the Credit Agreement include (i) a minimum net worth of $305.0 million;

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

(iii) a minimum liquidity amount of $35.0 million;

and (iv) a minimum of unrestricted cash and cash equivalents of $5.0 million.

The Credit Agreement also contains covenants that require the Company, as Servicer, with respect to any collection period to maintain certain delinquency ratios, payment ratios and annualized net charge-off ratios.

A failure to maintain such ratios may result in a Level I Trigger Event, Level II Trigger Event, or Level III Trigger Event.

Each of the capitalized terms used and not defined herein have the meanings set forth in the Credit Agreement.

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

The Credit Agreement also contains customary events of default (subject to certain materiality thresholds and cure periods), including among others, (a) non-payment, (b) non-compliance with covenants, (c) failure of the Administrative Agent to maintain a first-priority perfected security interest in any material portion of the collateral (subject to permitted liens), (d) the occurrence of a servicer termination event, (e) a breach of a representation or warranty, (f) an insolvency event involving the Company, the Borrower, or the Originators, (g) a change in control of the Company or the Borrower, (h) an event of default under a material financing agreement of the Company, the Borrower, or the Originators, (i) failure of the Company, as Servicer,

to maintain certain financial covenants, and (j) the Company, the Borrower, or the Originators have one or more final non-appealable judgments entered against it by a court of competent jurisdiction in excess of the specified monetary thresholds.

The remedies for such events of default are also customary for this type of transaction and include acceleration of the Borrower’s outstanding obligations under the Credit Agreement.

Notes Redemption

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

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

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

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

At any time prior to November 1, 2023, the Company 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 could have used the proceeds of certain equity offerings to redeem up to 40% of the aggregate principal amount of the Notes issued under the indenture at a redemption price equal to 107.0% of the principal amount of Notes redeemed, plus accrued and unpaid interest, if any, to, but not including, the date of redemption.

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

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.

On July 22, 2025, an irrevocable notice of full redemption (the “Notice”) of the Notes was delivered to the holders of the Notes.

The Notice called for the redemption of all of the outstanding Notes (the “Redemption”) on August 29, 2025 (the “Redemption Date”) at a redemption price equal to 101.750% of the principal amount of the Notes, plus accrued and unpaid interest, if any, to but not including, the Redemption Date.

The aggregate principal amount of the Notes redeemed was $168.3 million.

The Redemption was made in accordance with the terms and conditions of the Notes and the indenture governing the Notes.

As a result of the Redemption, the Company recognized an additional $3.7 million in interest expense, for which $3.0 million represents an early redemption premium and $0.7 million represents the write-off of the remaining unamortized debt issuance costs associated with the Notes.

During the six months ended September 30, 2025 and prior to the Redemption, the Company repurchased and extinguished $17.0 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 $17.0 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.

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 each of the three and six months ended September 30, 2025, the Company recognized a $3.7 million loss on extinguishment.

For the three and six months ended September 30, 2024, the Company recognized a $0.4 million and $1.2 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.

The indenture governing the Notes contains certain covenants that, among other things, limit the Company’s ability and the ability of its restricted subsidiaries to (i) incur additional indebtedness or issue certain disqualified stock and preferred stock;

(ii) pay dividends or distributions or redeem or purchase capital stock;

(iii) prepay subordinated debt or make certain investments;

(iv) transfer and sell assets;

(v) create or permit to exist liens;

(vi) enter into agreements that restrict dividends, loans and other distributions from their subsidiaries;

(vii) engage in a merger, consolidation or sell, transfer or otherwise dispose of all or substantially all of their assets;

and (viii) engage in transactions with affiliates.

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

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, 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.

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

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.

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;

(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 2.25 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 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.

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

Except as otherwise discussed in (i) this report including, but not limited to, any discussions in Part II, Item 1A, "Risk Factors" in this Quarterly Report on Form 10-Q and (ii) Part I, Item 1A, "Risk Factors" in the Company's fiscal 2024 Annual Report (as supplemented by any subsequent disclosures in information the Company files with or furnishes to the SEC from time to time), management is not currently aware of any trends, demands, commitments, events or uncertainties that it believes will or could result in, or are or could be reasonably likely to result in, any material adverse effect on the Company’s liquidity.

Share Repurchase Program

On 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.

On July 22, 2025, the Board of Directors authorized the Company to repurchase up to $100.0 million of the Company’s outstanding common stock, inclusive of the amount that remained available for repurchase under prior repurchase authorizations.

As of September 30, 2025, the Company had $33.4 million in aggregate remaining repurchase capacity under its current share repurchase program.

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

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

On September 3, 2025, in accordance with its share repurchase program, the Company, after approval by the Audit and Compliance Committee, repurchased 347,064 shares for $60.0 million from Prescott Associates L.P., Idoya Partners L.P., Prescott International Partners L.P., and Prescott Investors, Inc.

Profit Sharing (the "Sellers") in a privately negotiated transaction.

The Sellers are affiliates of Prescott General Partners, LLC, who, along with its affiliates, beneficially own approximately 42.5% of the Company's common stock as of September 30, 2025.

The $172.88 price per share, was the closing market price at September 3, 2025.

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.

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.

Additional share repurchases can be made subject to compliance with, among other things, applicable restricted payment covenants under the Revolving Credit Agreement.

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.

As of September 30, 2025, subject to further approval from our Board of Directors, we could repurchase approximately $77.0 million of shares under the terms of our Revolving Credit Agreement.

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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The Company believes that this increase in absolute revenue should offset any increase in operating costs.

In addition, because the Company’s loans have a relatively short contractual term and average life, it is unlikely that loans made at any given point in time will be repaid with significantly inflated dollars.

addition, because the Company’s loans have a relatively short contractual term and average life, it is unlikely that loans made at any given point in time will be repaid with significantly inflated dollars.

Quarterly Information and Seasonality

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Allowance for Credit Losses

Accounting policies related to the allowance for credit losses are considered to be critical as these policies involve considerable subjective judgement and estimation by management.

Accounting policies related to the allowance for credit losses are considered to be critical as these policies involve considerable subjective judgment and estimation by management.

In the case of loans, the allowance for credit losses is a contra-asset valuation account, calculated in accordance with ASC 326 that is deducted from the amortized cost basis of loans to present the net amount expected to be collected.

13 unchanged sentences

Under FASB ASC Topic 740, the Company will include the current and deferred tax impact of its tax positions in the financial statements when it is more likely than not (likelihood of greater than 50%) that such positions will be sustained by taxing authorities, with full knowledge of relevant information, based on the technical merits of the tax position.

While the Company supports its tax positions by unambiguous tax law, prior experience with the taxing authority, and analysis of what it considers to be all relevant facts, circumstances and regulations, management must still rely on assumptions and estimates to determine the overall likelihood of success and proper quantification of a given tax position.

While the Company supports its tax positions by unambiguous tax law, prior experience with the taxing authority, and analysis of what it considers

to be all relevant facts, circumstances and regulations, management must still rely on assumptions and estimates to determine the overall likelihood of success and proper quantification of a given tax position.

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