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Item 7. Management’s Discussion and Analysis

2026-06-04 compared with 2025-05-22 · 152 added, 117 removed, 144 unchanged (65% of the section changed)

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The Company's financial performance continues to be dependent in large part upon the growth in its outstanding loans receivable, the maintenance of loan quality and acceptable levels of operating expenses.

Since March 31, 2021, gross loans receivable have increased at a 2.63% annual compounded rate from $1.10 billion to $1.23 billion at March 31, 2025.

We believe we were able to improve our gross loans receivable growth rates through acquisitions, improved marketing processes, and analytics.

Since March 31, 2022, gross loans receivable have decreased at a 4.27% annual compounded rate from $1.52 billion to $1.28 billion at March 31, 2026.

We believe we can continue to improve our gross loans receivable growth rates through acquisitions, improved marketing processes, and analytics.

The Company plans to enter into new markets through opening new branches and acquisitions as opportunities arise.

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(1) Average gross loans receivable have been determined by averaging month-end gross loans receivable over the indicated period, excluding tax advances.

(1) Average gross loans receivable have been determined by averaging month-end gross loans receivable over the indicated period.

(2) Net loans receivable is defined as gross loans receivable less unearned interest and deferred fees.

(3) Average net loans receivable have been determined by averaging month-end gross loans receivable less unearned interest and deferred fees over the indicated period, excluding tax advances.

(3) Average net loans receivable have been determined by averaging month-end gross loans receivable less unearned interest and deferred fees over the indicated period.

(4) Operating income is computed as total revenue less provision for credit losses and general and administrative expenses.

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Comparison of Fiscal 2026 Versus Fiscal 2025

Net income for fiscal 2025 was $89.7 million, a 16.0% increase from the $77.3 million earned during fiscal 2024.

The increase in net income was primarily due to a $17.9 million decrease in personnel incentive expense, primarily due to the reversal of previously recognized stock-based compensation expense as discussed below.

Operating income (revenues less provision for credit losses and general and administrative expenses) during fiscal 2025 increased $7.1 million.

Total revenues decreased $8.4 million, or 1.5%, to $564.8 million in fiscal 2025, from $573.2 million in fiscal 2024.

Net income for fiscal 2026 was $34.6 million, a 61.2% decrease from the $89.2 million earned during fiscal 2025.

The decrease in net income was primarily due to a $59.0 million increase in personnel incentive expense, primarily due to the reversal of previously recognized stock-based compensation expense in fiscal 2025 as discussed below.

Operating income (revenues less provision for credit losses and general and administrative expenses) during fiscal 2026 decreased $59.3 million.

Total revenues increased $21.0 million, or 3.7%, to $585.2 million in fiscal 2026, from $564.2 million in fiscal 2025.

At March 31, 2026, the Company had 1,009 branches in operation, a decrease of 15 branches from March 31, 2025.

Interest and fee income during fiscal 2025 decreased by $3.4 million, or 0.7%, from fiscal 2024.

The decrease was primarily due to a decrease in average net loans receivable, which decreased 4.7% during fiscal 2025 compared to fiscal 2024.

Interest and fee income was also impacted by a shift away from larger, lower interest rate loans.

Interest and fee income during fiscal 2026 increased by $19.7 million, or 4.2%, from fiscal 2025.

The increase was due to an increase in average net loans receivable, which increased 0.6% during fiscal 2026 compared to fiscal 2025 as well as an increase in yields.

Interest and fee income was impacted by a shift away from larger, lower interest rate loans.

The large loan portfolio decreased from 48.5% of the overall portfolio as of March 31, 2025, to 44.7% as of March 31, 2026.

Insurance revenue and other income decreased by $4.9 million, or 4.7%, from fiscal 2024 to fiscal 2025.

Insurance revenue and other income increased by $1.3 million, or 1.3%, from fiscal 2025 to fiscal 2026.

See Note 9 to the Consolidated Financial Statements for the material components of Insurance and other income for the fiscal years ended March 31, 2026, 2025, and 2024.

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The sale of insurance products is limited to large loans in several states in which we operate.

Other income increased by $4.8 million, or 10.6%, from fiscal 2024 to fiscal 2025 primarily due to an increase in tax preparation revenue of $7.7 million, partially offset by a decrease in revenue from the Company's motor club product of $2.4 million.

Other income increased by $3.0 million, or 6.1%, from fiscal 2025 to fiscal 2026 primarily due to an increase in tax preparation revenue of $3.9 million.

The provision for credit losses during fiscal 2026 increased by $19.4 million, or 11.5%, from the previous year.

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

CECL Allowance and Provision (Dollars in millions) FY 2025

Difference Reconciliation

Beginning Allowance - March 31, 2024

$103.0 $125.6 $(22.6)

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

Balance at beginning of period $103.3 $103.0 $0.3

Change due to Growth $4.3 $(4.1) $8.4 $8.4

Change due to Expected Loss Rate on Performing Loans $6.0 $0.5 $5.5 $5.5

Change due to 90 day past due $4.0 $(2.3) $6.3 $6.3

Ending Allowance - March 31, 2025

$103.4 $103.0 $0.4 $23.0

Change due to 90 days past due $(1.7) $3.9 $(5.6) $(5.6)

Balance at end of period $111.9 $103.3 $8.6 $8.3

Net Charge-offs $179.9 $168.8 $11.1 $11.1

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

The Company's year-over-year net charge-off ratio (net charge-offs as a percentage of average net loans receivable) decreased from 17.7% for the year ended March 31, 2024 to 17.5% for the year ended March 31, 2025.

The Company's year-over-year net charge-off ratio (net charge-offs as a percentage of average net loans receivable) increased from 17.5% for the year ended March 31, 2025 to 18.5% for the year ended March 31, 2026.

The net charge-off rate for the past ten fiscal years averaged 17.1%, with a high of 23.7% (fiscal 2023) and a low of 14.1% (fiscal 2021).

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2023 In fiscal 2023, the Company's net charge-off rate increased to 23.7%.

This increase is primarily attributable to the higher proportion of NBs at the beginning of the current fiscal year.

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

2024 In fiscal 2024, the Company's net charge-off rate decreased to 17.7%.

This decrease is primarily attributable to the Company's continued focus on credit quality and a conservative approach to its lending operations.

General and administrative expenses during fiscal 2025 decreased by $27.7 million, or 10.3%, over the previous fiscal year.

General and administrative expenses, when divided by average open branches, decreased 9.1% from fiscal 2024 to fiscal 2025 and, overall, general and administrative expenses as a percent of total revenues decreased to 42.7% in fiscal 2025 from 46.9% in fiscal 2024.

General and administrative expenses during fiscal 2026 increased by $60.9 million, or 25.3%, over the previous fiscal year.

General and administrative expenses, when divided by average open branches, increased 28.5% from fiscal 2025 to fiscal 2026 and, overall, general and administrative expenses as a percent of total revenues increased to 51.6% in fiscal 2026 from 42.7% in fiscal 2025.

The change in general and administrative expense is explained in greater detail below.

Personnel expense totaled $141.1 million for fiscal 2025, a $23.4 million, or 14.2%, decrease over fiscal 2024.

The decrease was largely due to the $18.5 million reversal of previously recognized stock-based compensation expense associated with the $20.45 Performance Shares and the $3.5 million reversal of previously recognized expense associated with the $16.35 Performance Shares.

Personnel expense totaled $200.0 million for fiscal 2026, a $59.0 million, or 41.8%, increase over fiscal 2025.

The increase was largely due to a $39.0 million increase in share based compensation expense.

Share based compensation expense increased due to share grants in December of 2024 and June of 2025, and because there was a $22.0 million reversal of previously recognized share based expense in fiscal 2025 as further discussed in Note 14 to the Consolidated Financial Statements.

The remaining increase in personnel expense was due to an increase in salary expense as a result of the increase in headcount, and an increase in field level incentives.

Our headcount as of March 31, 2026 increased 2.4% compared to March 31, 2025.

Occupancy and equipment expense totaled $48.4 million for fiscal 2026, a 0.8 million, or 1.6%, decrease over fiscal 2025.

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

The expense per average open branch remained relatively flat at $47.2 thousand when comparing fiscal 2025 and 2024.

In fiscal 2026, the expense per average open branch increased to $47.6 thousand, up from $47.2 thousand in fiscal 2025.

Advertising expense totaled $10.6 million for fiscal 2026, a $0.4 million, or 3.5%, increase over fiscal 2025.

The increase was primarily due to increased spending in our new customer acquisition programs.

The increase was primarily due to increased spending in customer acquisition programs.

Amortization of intangible assets totaled $3.2 million for fiscal 2026, a $0.6 million, or 16.4%, decrease over fiscal 2025, which primarily relates to an increase in fully amortized intangible assets during the current fiscal year.

Other expense totaled $36.7 million for fiscal 2025, a $3.5 million, or 8.8%, decrease over fiscal 2024.

Interest expense decreased by $5.5 million, or 11.5%, during fiscal 2025 when compared to the previous fiscal year primarily as a result of a 10.9% decrease in average debt outstanding.

Income tax expense increased $0.2 million for fiscal 2025 compared to the prior fiscal year.

The effective tax rate decreased to 19.9% for fiscal 2025 compared to 22.2% for fiscal 2024.

The effective tax rate decreased primarily due to pretax book earnings relative to the effects of various permanent items including a decrease in the disallowed executive compensation under Section 162(m), considering the effects of forfeitures discussed in Note 12 to the Consolidated Financial Statements and the recognition of additional HTC's when compared to prior year.

Other expense totaled $39.7 million for fiscal 2026, a $3.0 million, or 8.3%, increase over fiscal 2025.

Interest expense increased by $6.7 million, or 15.8%, during fiscal 2026 when compared to the previous fiscal year primarily as a result of a 9.2% increase in average debt outstanding.

Additionally, in fiscal 2026, the Company recognized an additional $3.7 million in interest expense related to the redemption of all of the outstanding Notes as further discussed in Note 8 to the Consolidated Financial Statements.

Income tax expense decreased $11.4 million for fiscal 2026 compared to the prior fiscal year.

The effective tax rate increased to 23.6% for fiscal 2026 compared to 19.8% for fiscal 2025.

The effective tax rate increased primarily due to a settlement with various taxing authorities that resulted in an increase in the reserve under ASC 740-10 (unrecognized tax positions) in the current period, along with the tax benefit related to the forfeitures of the $20.45 Performance Shares and the $16.35 Performance Shares in the prior period.

This was partially offset by the permanent tax benefit related to nonqualified stock option exercises and vesting of restricted stock in the current period.

Comparison of Fiscal 2025 Versus Fiscal 2024

For a comparison of our results of operations for the years ended March 31, 2025 and March 31, 2024, see Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the fiscal year ended March 31, 2025 (which was filed with the SEC on May 22, 2025).

Press Release to 10-K Reconciliation

The Company issued its fourth quarter and fiscal 2026 earnings press release on April 30, 2026, prior to completion of the audit.

The table below reconciles the differences in the press release figures to the Form 10-K.

For the year ended March 31, 2026

As Reported in the Press Release

Increase (Decrease)

As Reported in the Form 10-K

(Dollars in thousands, except per share amounts)

Insurance and other income, net $ 100,912 $ (576) $ 100,336

Total revenues 585,742 (576) 585,166

Income before income taxes 45,818 (576) 45,242

Income tax expense

10,804 (147) 10,657

Net income 35,015 (429) 34,586

Net income per diluted share 6.97 (0.09) 6.88

5,107 964 6,071

Deferred income taxes, net

40,233 1,008 41,241

1,052,148 1,972 1,054,120

Accounts payable and accrued expenses 37,032 964 37,996

Deferred revenue (contract liability)

— 3,926 3,926

Total liabilities

698,225 4,890 703,115

Shareholders' equity

353,923 (2,918) 351,005

Total liabilities and shareholders' equity

1,052,148 1,972 1,054,120

Regulatory Matters

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

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

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

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

The Rule also curtails repeated unsuccessful attempts to debit consumers’ accounts for short-term loans, balloon payment loans, and installment loans that involve a payment authorization and an annual percentage rate over 36% (“payment requirements”).

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Since then, the CFPB issued a public designation order setting forth its determination that the Company had met the legal requirements for supervision (the "Order").

Pursuant to the terms of the Order, the CFPB had supervisory authority over the Company pursuant to section 1024(a)(1)(C) of the Consumer Financial Protection Act of 2010 until such time as the Order

is terminated consistent with 12 C.F.R.

Importantly, on May 12, 2025, the CFPB withdrew the Order, indicating that the CFPB "is shifting its supervisory priorities to focus on pressing threats to consumers" and that supervision of the Company "is not consistent with these priorities." See Part I, Item 1, “Description of Business - Government Regulation - Federal legislation,” for a further discussion of these matters and the federal regulations to which the Company’s operations are subject and Part I, Item 1A, “Risk Factors,” for more information regarding these regulatory and related risks.

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

Importantly, on May 12, 2025, the CFPB withdrew the Order, indicating that

the CFPB "is shifting its supervisory priorities to focus on pressing threats to consumers" and that supervision of the Company "is not consistent with these priorities." See Part I, Item 1, “Description of Business - Government Regulation - Federal legislation,” for a further discussion of these matters and the federal regulations to which the Company’s operations are subject and Part I, Item 1A, “Risk Factors,” for more information regarding these regulatory and related risks.

Quarterly Information and Seasonality

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General and administrative expenses $ 70,360 $ 71,968 $ 78,057 $ 81,493 $ 61,412 $ 46,355 $ 67,223 $ 65,940

Net income (loss)

$ 1,585 $ (1,662) $ (625) $ 35,290 $ 10,151 $ 22,366 $ 13,629 $ 43,100

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Number of branches open 1,014 1,013 1,013 1,009 1,047 1,045 1,035 1,024

Critical Accounting Policies and Estimates

Critical Accounting Estimates

The Company’s accounting and reporting policies are in accordance with GAAP and conform to general practices within the finance company industry.

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As a result, changes in these estimates and assumptions could significantly affect the Company’s financial position and results of operations.

The Company considers its policies regarding the allowance for credit losses, share-based compensation, and income taxes to be its most critical accounting policies due to the significant degree of management judgment involved.

The Company considers its policies regarding the allowance for credit losses and income taxes to be its most critical accounting policies due to the significant degree of management judgment involved.

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.

The amount of the allowance account represents management’s best estimate of current expected credit losses on these financial instruments considering available information, from internal and external sources, relevant to assessing exposure to credit loss over the contractual term of the instrument.

The amount of the allowance represents management’s best estimate of current expected credit losses on these financial instruments considering available information, from internal and external sources, relevant to assessing exposure to credit loss over the contractual term of the instrument.

Relevant available information includes historical credit loss experience, current conditions, and reasonable and supportable forecasts.

Share-Based Compensation

The Company measures compensation cost for share-based awards at fair value and recognizes compensation over the service period for awards expected to vest.

The fair value of restricted stock is based on the number of shares granted and the quoted price of our common stock at the time of grant, and the fair value of stock options is determined using the Black-Scholes valuation model.

The Black-Scholes model requires the input of highly subjective assumptions, including expected volatility, risk-free interest rate and expected life.

Actual results, and future changes in estimates, may differ substantially from our current estimates.

The historical credit loss experience is adjusted for quantitative and qualitative factors that are not fully reflected in the historical data.

In determining our estimate of expected credit losses, we evaluate information related to credit metrics, changes in our lending strategies and underwriting practices, and the current and forecasted direction of the economic and business environment.

These metrics include, but are not limited to, trends in first pay success for NBs, 61-90 day delinquencies on a recency basis, percent of loan balances that are paying, percentage of gross loans that are acquired loan, portfolio composition, and observable changes in recent or expected economic trends and conditions.

To enhance the precision of the allowance for credit loss estimate, we evaluate our loans receivable portfolio on a pool basis and segment each pool of loans receivable with similar credit risk characteristics, specifically Customer Tenure, which was determined to be the best predictor of default risk.

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

Due to the judgment and uncertainty in estimating the allowance for credit losses, we may experience differences to the assumptions, which could lead to further changes in our allowance for credit losses, allowance as a percentage of loans receivable, net, and provision for credit losses.

Management uses certain assumptions and estimates in determining income taxes payable or refundable, deferred income tax liabilities and assets for events recognized differently in its financial statements and income tax returns, and income tax expense.

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No assurance can be given that either the tax returns submitted by management or the income tax reported on the Consolidated Financial Statements will not be adjusted by either adverse rulings, changes in the tax code, or assessments made by the IRS or by state or foreign taxing authorities.

The Company is subject to potential adverse adjustments including, but not limited to:

an increase in the statutory federal or state income tax rates, the permanent non-deductibility of amounts currently considered deductible either now or in future periods, and the dependency on the generation of future taxable income in order to ultimately realize deferred income tax assets.

The Company is subject to potential adverse adjustments including, but not limited to, an increase in the statutory federal or state income tax rates, the permanent non-deductibility of amounts currently considered deductible either now or in future periods, and the dependency on the generation of future taxable income in order to ultimately realize deferred income tax assets.

Under FASB ASC 740, the Company includes 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 that considers 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 that considers 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.

Liquidity and Capital Resources

The Company has financed and continues to finance its operations, acquisitions and branch expansion through a combination of cash flows from operations and borrowings from its institutional lenders.

The Company has historically financed and continues to finance its operations, acquisitions and branch expansion through a combination of cash flows from operations and borrowings from its institutional lenders.

As discussed below, the Company has also issued debt securities to finance its operations and repay a portion of its outstanding indebtedness.

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.

the Company's gross loans receivable decreased from $1.52 billion at March 31, 2022 to $1.23 billion at March 31, 2025, net cash provided by operating activities for fiscal years 2025, 2024, and 2023 was $254.2 million, $265.8 million, and $291.6 million, respectively.

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

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

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 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.

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

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

As a result, the Company recognized a $1.0 million, $1.6 million and $1.8 million gain on extinguishment for the years ended March 31, 2025, 2024, and 2023, respectively.

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

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.

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

However, our revolving credit facility and the Notes limit share repurchases to up to $90.0 million from March 26, 2021 through June 30, 2022 plus up to 50% of consolidated adjusted net income for the period commencing January 1, 2019.

As of March 31, 2025, subject to further approval from our Board of Directors, we could repurchase approximately $18.8 million of shares under the terms of our debt facilities.

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

The Company acquired $18.8 million and $2.1 million in loans receivable, net during fiscal 2025 and 2024, respectively.

Net cash provided by operating activities for fiscal year 2026 was $259.4 million.

As of March 31, 2026, the Company's debt outstanding was $587.2 million and its shareholders' equity was $351.0 million resulting in a debt-to-equity ratio of 1.7:1.0.

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 Sheets.

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.

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

The revolving credit facility provides for revolving borrowings of up to the lesser of (a) the aggregate commitments under the facility and (b) a borrowing base, and it includes a $889.7 thousand letter of credit under a $1.5 million subfacility.

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

At March 31, 2025, the aggregate commitments under

the revolving credit facility were $580.0 million.

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

As of March 31, 2026, 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 Revolving 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 March 31, 2026, 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 $816.1 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) $616.1 thousand related to the Company's investment in captive insurance expiring on March 1, 2027.

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

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

Further, under the revolving credit facility, 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 year ended March 31, 2025, the effective interest rate, including the commitment fee, on borrowings under the revolving credit facility was 9.5%.

The Company pays a commitment fee equal to 0.50% per annum of the daily unused portion of the commitments.

On March 31, 2025, $262.5 million was outstanding under this facility, and there was $316.7 million of unused borrowing availability under the borrowing base limitations.

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 subsidiaries.

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 year ended March 31, 2026, the effective interest rate, including the commitment fee and amortization of debt issuance costs, as it relates to the Revolving Credit Agreement and Prior Credit Agreement was 8.3%.

At March 31, 2026, the unused amount available under the Revolving Credit Facility was $90.1 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 facility or any affiliate of any such lender, are required to be guaranteed by each of the Company’s wholly-owned subsidiaries.

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

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

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

The agreement's financial covenants include (i) a minimum consolidated net worth of $325.0 million;

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

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

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

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 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.

As of March 31, 2026, the Company may borrow at the rate of one-month SOFR plus 0.11448% and an applicable margin of 3.0%, with a minimum rate of 4.0%.

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

For the year ended March 31, 2026, the Company’s effective interest rate, including the commitment fee and amortization of debt issuance costs, was 6.7%.

At March 31, 2026, the unused amount available under the Warehouse Facility was $31.7 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 March 31, 2026, subject to further approval from our Board of Directors, we could repurchase approximately $59.9 million of shares under the terms of our debt facilities.

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

The Company believes that cash flow from operations and borrowings under its credit facilities or other sources will be adequate to fund the expected cash requirements from contractual and other obligations and 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 this report including, but not limited to, any discussions in Part 1, Item 1A, "Risk Factors" (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 March 31, 2026, after giving effect to a Consent and Limited Modification to the Net Income Available for Fixed Charges to Fixed Charges ratio entered into on May 22, 2026 as further discussed in Note 19 to the Consolidated Financial Statements.

The Company 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 the Borrower 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 tangible net worth of $305.0 million;

(ii) a maximum ratio of debt to tangible 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 March 31, 2026, and does not believe that these covenants will materially limit its business and expansion strategy.

The agreement contains events of default including, without limitation, nonpayment of principal, interest or other obligations, violation of covenants, misrepresentation, cross-default to other debt, bankruptcy and other insolvency events, judgments, certain ERISA events, actual or asserted invalidity of loan documentation, invalidity of subordination provisions of subordinated debt, certain changes of control of the Company, and the occurrence of certain regulatory events (including the entry of any stay, order, judgment, ruling or similar event related to the Company’s or any of its subsidiaries’ originating, holding, pledging, collecting or enforcing its eligible loans receivables that is material to the Company or any subsidiary) which remains unvacated, undischarged, unbonded or unstayed by appeal or otherwise for a period of 60 days from the date of its entry and is reasonably likely to cause a material adverse change.

As of March 31, 2025, the Company's debt outstanding was $446.9 million, net of $1.0 million unamortized debt issuance costs related to the unsecured senior notes payable, and its shareholders' equity was $439.5 million resulting in a debt-to-equity ratio of 1.0:1.0.

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 cash requirements from contractual and other obligations and 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).

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.

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 (as defined therein), (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 $300 million senior notes due November 2026 (the "Notes").

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

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 101.75% 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 year ended March 31, 2026 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.

For the year ended March 31, 2026, the Company recognized a $3.7 million loss on extinguishment.

For the fiscal years ended 2025 and 2024, the Company recognized a $1.0 million and $1.6 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.

Share Repurchase Program

On May 15, 2024, the Board of Directors of the Company approved a share repurchase program authorizing the

Company to repurchase up to $20.0 million of its outstanding common stock, inclusive of any amount that remains available

for repurchase under prior repurchase authorizations.

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

On February 12, 2025, the Board of Directors authorized the Company to repurchase up to $25.0 million of the Company’s outstanding common stock, inclusive of the amount that remains available for repurchase under prior repurchase authorizations.

As of March 31, 2025, the Company had $0.4 million in aggregate remaining repurchase capacity under such share repurchase program, and on April 30, 2025, the Board of Directors of the Company approved a share repurchase program authorizing the Company to repurchase up to $20.0 million of its outstanding common stock, inclusive of any amount that remains available for repurchase under this prior repurchase authorization.

The timing and actual number of shares of common stock repurchased will depend on a variety of factors, including the stock price, corporate and regulatory requirements, restrictions under the Company's debt agreements and other market and economic conditions.

On February 11, 2026, the Board of Directors authorized the Company to repurchase up to $50.0 million of the Company’s outstanding common stock, inclusive of the amount that remained available for repurchase under prior repurchase authorizations.

As of March 31, 2026, the Company had $12.2 million in aggregate remaining repurchase capacity under its current share repurchase program.

The timing and actual number of shares of common stock repurchased will depend on a variety of factors, including the stock price, corporate and regulatory requirements, restrictions under the revolving credit facility and other market and economic conditions.

The Company’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 of its common stock for $60.0 million in a privately negotiated transaction from certain affiliates of Prescott General Partners, LLC, who, along with its affiliates, beneficially own approximately 46.3% of the Company's common stock as of March 31, 2026.

The price per share was $172.88, which 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.

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

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

As of March 31, 2026, subject to further approval from our Board of Directors, we could repurchase approximately $59.9 million of shares under the terms of our debt facilities.

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What changed 10-K

Item 7. Management’s Discussion and Analysis