What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-02-09 compared with 2025-11-06 · 124 added, 125 removed, 200 unchanged (55% of the section changed)

34 unchanged sentences

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 September 30, Six months ended September 30,

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

2025 2024 2025 2024

27 unchanged sentences

It does not include loans purchased through acquisitions.

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 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.

Comparison of three months ended December 31, 2025 versus three months ended December 31, 2024

Gross loans outstanding increased to $1.4 billion as of December 31, 2025, a 1.5% increase from the $1.38 billion of gross loans outstanding as of December 31, 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 6.6%, or $86.8 million, from $1.32 billion as of September 30, 2025, compared to an increase of 6.6%, or $85.6 million, in the comparable quarter of the prior year.

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

Specifically, during the quarter, new and refinance customer loan volume increased 16.6% and 8.0% respectively, compared to the same quarter of fiscal 2025.

Our customer base increased by 4.1% during the twelve-month period ended December 31, 2025, compared to an increase of 3.7% for the comparable period ended December 31, 2024.

During the three months ended December 31, 2025 our unique borrowers increased by 4.2% compared to an increase of 6.2% during the three months ended December 31, 2024.

The $0.9 million net loss for the three months ended December 31, 2025 is a 106.8% decrease from net income of $13.4 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 $15.5 million, or 56.9%, compared to the same period of the prior year.

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 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.

Our results of operations were 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 2026 originations given early payment performance and yield.

Further, the current third quarter included $5.4 million in share based compensation expense, which is a $5.0 million increase compared to the same quarter of the prior year due to share grants in December of 2024 and June of 2025.

Revenues for the three months ended December 31, 2025 increased by $2.6 million, or 1.9%, to $141.3 million from $138.6 million for the same period of the prior year.

Interest and fee income for the three months ended December 31, 2025 increased by $3.6 million, or 2.9%, 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 December 31, 2025 decreased by $1.0 million, or 5.9%, from the same period of the prior year.

Insurance income remained relatively flat at $12.5 million during the three months ended December 31, 2025 when compared to the three months ended December 31, 2024.

Other income decreased $1.0 million, or 25.5%, to $2.8 million in the third quarter of fiscal 2026, compared to $3.8 million in the third quarter of fiscal 2025.

The provision for credit losses increased $7.3 million, or 16.6%, to $51.4 million from $44.1 million when comparing the third quarter of fiscal 2026 to the third 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) Q3 FY 2026 Q3 FY 2025 Difference Reconciliation

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

Beginning Allowance - September 30 $117.8 $114.5 $3.3

Change due to Growth $7.7 $7.6 $0.1 $0.1

Change due to Expected Loss Rate on Performing Loans $(2.0) $(5.6) $3.6 $3.6

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

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

Change due to 90 days past due $(0.9) $(0.3) $(0.6) $(0.6)

Ending Allowance - December 31 $122.6 $116.2 $6.4 $3.1

Net Charge-offs $46.6 $42.4 $4.2 $4.2

1 unchanged sentence

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 in new customers during the quarter.

The improved quarter over quarter growth resulted in a $2.5 million increase in the provision.

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.

The provision was negatively impacted by an increase in net charge-offs and growth in new customers during the quarter.

Our 0-5 month customers increased as a percentage of the portfolio from 8.6% as of September 30, 2025 to 9.9% as of December 31, 2025.

This led to an increase in the overall expected loss rates of the portfolio during the quarter.

Net charge-offs for the quarter increased $4.2 million, from $42.4 million in the third quarter of fiscal 2025 to $46.6 million in the third quarter of fiscal 2026.

Net charge-offs as a percentage of average net loan receivables on an annualized basis increased to 18.7% in the third quarter of fiscal 2026 from 17.2% in the third quarter of fiscal 2025.

Net charge-offs increased due to the increase in new customers in the twelve months ending September 30, 2025.

The Company's allowance for credit losses as a percentage of net loans was 11.8% at December 31, 2025 compared to 11.4% at December 31, 2024.

Accounts that were 61 days or more past due on a recency basis decreased to 5.6% at December 31, 2025 compared to 5.7% at December 31, 2024.

Recency delinquency on accounts at least 90 days past due remained relatively flat at 3.4% at December 31, 2025, compared to December 31, 2024.

Recency delinquency on accounts 0 to 60 days past due decreased from 20.0% at December 31, 2024, to 18.1% at December 31, 2025.

G&A expenses for the three months ended December 31, 2025 increased by $10.8 million, or 16.1%, from the corresponding period of the previous year.

As a percentage of revenues, G&A expenses increased from 48.5% during the three months ended December 31, 2024 to 55.3% during the three months ended December 31, 2025.

G&A expenses per average open branch increased by 19.1% when comparing the two three-month periods.

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

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.

Personnel expense totaled $51.3 million for the three months ended December 31, 2025, a $10.2 million, or 24.9%, increase over the three months ended December 31, 2024.

Salary expense increased approximately $2.8 million, or 8.7%, during the quarter ended December 31, 2025, compared to the quarter ended December 31, 2024.

Our headcount as of December 31, 2025 increased 10.2% compared to December 31, 2024.

Benefit expense increased approximately $0.8 million, or 10.1%, when comparing the quarterly periods ended December 31, 2025 and 2024.

Incentive expense increased $6.9 million in the third quarter of fiscal 2026 compared to the third quarter of fiscal 2025.

The increase in incentive expense is primarily due to a $5.0 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 $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.

There was also a

significant increase in field level incentives.

Over the last several months we have increased headcount in the field to further improve branch level performance.

Occupancy and equipment expense totaled $12.4 million for the three months ended December 31, 2025, a $0.1 million, or 1.2%, increase over the three months ended December 31, 2024.

Advertising expense decreased $0.7 million, or 15.5%, in the third quarter of fiscal 2026 compared to the third 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 December 31, 2025, a $0.2 million, or 17.2%, decrease over the three months ended December 31, 2024.

Other expense totaled $9.8 million for the three months ended December 31, 2025, a $1.3 million, or 15.3%, increase over the three months ended December 31, 2024.

Interest expense for the three months ended December 31, 2025 increased by $1.5 million, or 13.2%, from the corresponding three months of the previous year.

Interest expense primarily increased due to a 17.1% increase in the average debt outstanding for the quarter, partially offset by a 2.8% decrease in the effective interest rate from 8.4% to 8.1%.

The average debt outstanding increased from $534.0 million to $625.4 million when comparing the quarters ended December 31, 2024 and 2025.

The Company’s debt-to-equity ratio increased from 1.3:1 at December 31, 2024 to 1.9:1 at December 31, 2025.

Other key return ratios for the three months ended December 31, 2025 included a 4.0% return on average assets and a return on average equity of 10.6% (both on a trailing 12-month basis), as compared to a 7.5% return on average assets and a return on average equity of 19.2% (both on a trailing 12-month basis) for the three months ended December 31, 2024.

The Company’s effective income tax rate was 10.1% for the three months ended December 31, 2025 compared to 16.4% for the corresponding period of the previous year.

The change was the result of 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) and the permanent tax benefit related to nonqualified stock option exercises and vesting of restricted stock treated as discrete items in the current quarter.

Comparison of nine months ended December 31, 2025 versus nine months ended December 31, 2024

Gross loans outstanding increased to $1.40 billion as of December 31, 2025, a 1.5% increase from the $1.38 billion of gross loans outstanding as of December 31, 2024.

Net loss for the nine months ended December 31, 2025 decreased to $1.5 million from the $45.5 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 $52.4 million, or 59.3%.

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 significant decrease is primarily the result of an $18.5 million reversal of share based compensation expense in the second quarter 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 $18.6 million.

Share based compensation expense for the nine months ended December 31, 2025 was $14.6 million, a $33.2 million increase compared to the same period of the prior year, mainly due to the prior year reversal noted above and share grants in December 2024 and June 2025.

The nine month period ended December 31, 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 a $15.6 million increase in provision for credit losses, largely related to our new loan growth;

however, we expect solid returns on our fiscal 2025 and 2026 originations given early payment performance and yield.

Revenues increased by $8.6 million, or 2.2%, to $408.2 million during the nine months ended December 31, 2025 from $399.6 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.

Interest and fee income for the nine months ended December 31, 2025 increased by $12.8 million, or 3.7%, from the same period of the prior year.

Net loans outstanding at December 31, 2025 increased by 1.5% over the balance at December 31, 2024.

Average net loans outstanding decreased by 0.1% for the nine months ended December 31, 2025 compared to the nine-month period ended December 31, 2024.

Insurance commissions and other income for the nine months ended December 31, 2025 decreased by $4.2 million, or 8.0%, from the same period of the prior year.

Insurance commissions decreased by approximately $1.8 million, or 4.9%, during the nine months ended December 31, 2025 when compared to the nine months ended December 31, 2024.

Other income decreased by $2.3 million, or 16.2%, during the nine months ended December 31, 2025 when compared to the nine months ended December 31, 2024.

The provision for credit losses increased $15.6 million, or 11.4%, to $151.8 million from $136.2 million when comparing the first three quarters of fiscal 2026 to the first three quarters of fiscal 2025.

Net charge-offs as a percentage of average net loans receivable on an annualized basis increased from 17.1% in the first three quarters of fiscal 2025 to 18.4% in the first three quarters of fiscal 2026.

G&A expenses for the nine months ended December 31, 2025 increased by $45.4 million, or 25.9%, from the corresponding period of the previous year.

As a percentage of revenues, G&A expenses increased from 43.8% during the first nine months of fiscal 2025 to 54.0% during the first nine months of fiscal 2026.

G&A expenses per average open branch increased by 29.4% when comparing the two nine-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.

Personnel expense totaled $145.1 million for the nine months ended December 31, 2025, a $45.3 million, or 45.4%, increase over the nine months ended December 31, 2024.

Salary expense increased approximately $5.5 million, or 5.9%, when comparing the two nine month periods ended December 31, 2025 and 2024.

Our headcount as of December 31, 2025 increased 10.2% compared to December 31, 2024.

The increase is the result of annual salary increases and increased headcount in the field to further improve branch level performance.

Benefit expense increased approximately $2.3 million, or 10.0%, when comparing the nine month periods ended December 31, 2025 and 2024.

Incentive expense increased $38.0 million when comparing the nine month periods ended December 31, 2025 and 2024.

The increase in incentive expense is primarily due to a $33.2 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.

Share based compensation expense increased due to share grants in December of 2024 and June of 2025, and because the prior year period 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 $36.0 million for the nine months ended December 31, 2025, a $0.7 million, or 2.0%, decrease over the nine months ended December 31, 2024.

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

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.

For the nine months ended December 31, 2025, the average occupancy and equipment expense per branch totaled $35.5 thousand, a $0.2 thousand, or 0.7%, increase when compared to the nine months ended December 31, 2024.

Advertising expense totaled $8.2 million for the nine months ended December 31, 2025, a $0.7 million, or 7.8%, decrease over the nine months ended December 31, 2024 due to increased efficiency in our customer acquisition programs.

Amortization of intangible assets totaled $2.4 million for the nine months ended December 31, 2025, a $0.5 million, or 16.7%, decrease over the nine months ended December 31, 2024.

Other expense totaled $28.6 million for the nine months ended December 31, 2025, a $2.1 million, or 7.8%, increase over the nine months ended December 31, 2024.

Interest expense for the nine months ended December 31, 2025 increased by $5.2 million, or 16.6%, from the corresponding nine months of the previous year.

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 during the second quarter of fiscal 2026.

Additionally, there was a 4.7% increase in the average debt outstanding, from $508.5 million to $532.7 million.

The increase in interest expense was partially offset by a 3.4% decrease in the effective interest rate from 8.5% to 8.2%.

Other key return ratios for the first nine months of fiscal 2026 included a 4.0% return on average assets and a return on average equity of 10.6% (both on a trailing 12-month basis), as compared to a 7.5% return on average assets and a return on average equity of 19.2% (both on a trailing 12-month basis) for the first nine months of fiscal 2025.

The Company’s effective income tax rate was a negative 100.8% for the nine months ended December 31, 2025 compared to 20.1% 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 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.

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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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 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.

Net cash provided by operating activities for the nine months ended December 31, 2025 was $164.8 million.

As of December 31, 2025, the Company's debt outstanding was $677.2 million and its shareholders' equity was $351.6 million resulting in a debt-to-equity ratio of 1.9:1.0.

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

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:

As of December 31, 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.

At December 31, 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.

The Company had $789.7 thousand in outstanding standby letters of credit which include (i) $200.0 thousand related to worker's compensation expiring on October 16, 2026 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.

For the nine months ended December 31, 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 8.3% annualized and 9.5%, respectively.

At December 31, 2025, the unused amount available under the Revolving Credit Facility was $63.5 million.

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

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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.

As of December 31, 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.

For the nine months ended December 31, 2025, the Company’s effective interest rate, including the commitment fee and amortization of debt issuance costs, as it relates to the Credit Agreement was 6.3%.

At December 31, 2025, the unused amount available under the Warehouse Facility was $73.5 million.

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

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.

Our first priority is

to ensure we have enough capital to fund loan growth.

As of December 31, 2025, subject to further approval from our Board of Directors, we could repurchase approximately $61.1 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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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 Company was in compliance with these covenants at December 31, 2025, after giving effect to an agreement related to the treatment of the payment of early call premiums in connection with Redemption, 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.

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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 Company was in compliance with these covenants at December 31, 2025 and does not believe that these covenants will materially limit its business and expansion strategy.

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.

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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 the nine months ended December 31, 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.

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.

No loss on extinguishment was recognized for the three months ended December 31, 2025.

For the nine months ended December 31, 2025, the Company recognized a $3.7 million loss on extinguishment.

For the three and nine months ended December 31, 2024, the Company recognized a $50.0 thousand loss on extinguishment and a $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.

1 unchanged sentence

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.

As of December 31, 2025, the Company had $18.4 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.

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 of its common stock 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 Sellers are affiliates of Prescott General Partners, LLC, who, along with its affiliates, beneficially own approximately 43.6% of the Company's common stock as of December 31, 2025.

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

2 unchanged sentences

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.

As of December 31, 2025, subject to further approval from our Board of Directors, we could repurchase approximately $61.1 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 does not believe that inflation will have a materially adverse effect on its financial condition, unless changes in inflation are particularly severe and sudden in nature.

Although inflation would increase the Company’s operating costs in absolute terms, the Company expects that the same decrease in the value of money would result in an increase in the size of loans demanded by its customer base.

Although inflation would increase the Company’s operating costs in absolute terms, the Company expects that the same decrease in the value of money would result in an increase in the size of

loans demanded by its customer base.

It is reasonable to anticipate that such a change in customer preference would result in an increase in total loans receivable and an increase in absolute revenue to be generated from that larger amount of loans receivable.

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

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.

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.

Quarterly Information and Seasonality

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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