World Acceptance Corporation Reports Fiscal 2025 First Quarter Results
First fiscal quarter highlights
During its first fiscal quarter,
Highlights from the first quarter include:
-
Net income of
$9.9 million -
Diluted net income per share of
$1.79 -
Recency delinquency on accounts 90+ days past due improved to 3.4% at
June 30, 2024 , from 3.5% atJune 30, 2023 -
Total revenues of
$129.5 million , including a 28 basis point yield increase compared to the same quarter in the prior year
Portfolio results
Gross loans outstanding were
During the most recent quarter, we did not see a significant change in borrowing from new and former customers compared to the same quarter of fiscal year 2024. Our customer base decreased by 2.6% during the twelve-month period ended
The following table includes the volume of gross loan origination balances, excluding tax advance loans, by customer type for the following comparative quarterly periods:
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Q1 FY 2025 |
Q1 FY 2024 |
Q1 FY 2023 |
New Customers |
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Former Customers |
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Refinance Customers |
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As of
Three-month financial results
Net income for the first quarter of fiscal 2025 increased to
Total revenues for the first quarter of fiscal 2025 decreased to
The Company accrues for expected losses with a current expected credit loss ("CECL") methodology, which requires us to create a provision for credit losses on the day we originate the loan. The provision for credit losses decreased
CECL Allowance and Provision (Dollars in millions) |
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Q1 FY 2025 |
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Q1 FY 2024 |
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Difference |
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Reconciliation |
Beginning Allowance - |
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Change due to Growth |
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Change due to Expected Loss Rate on Performing Loans |
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Change due to 90 day past due |
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Ending Allowance - |
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Net Charge-offs |
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Provision |
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Note: 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 benefited from lower charge-offs during the quarter. This was partially offset by a seasonally driven increase of expected loss rates.
Net charge-offs for the quarter decreased
Accounts 61 days or more past due remained flat at 5.6% on a recency basis at
The table below is updated to use the customer tenure-based methodology that aligns with our CECL methodology. After experiencing rapid portfolio growth during fiscal years 2019 and 2020, primarily in new customers, our gross loan balance experienced pandemic related declines in fiscal 2021 before rebounding during fiscal 2022. Over the last two years we have tightened our lending to new customers substantially. The tables below illustrate the changes in the portfolio weighting.
Gross Loan Balance By Customer Tenure at Origination |
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As of |
Less Than 2 Years |
More Than 2 Years |
Total |
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Year-Over-Year Growth (Decline) in Gross Loan Balance by Customer Tenure at Origination |
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12 Month Period Ended |
Less Than 2 Years |
More Than 2 Years |
Total |
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Portfolio Mix by Customer Tenure at Origination |
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As of |
Less Than 2 Years |
More Than 2 Years |
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35.1% |
64.9% |
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33.3% |
66.7% |
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31.3% |
68.7% |
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31.8% |
68.2% |
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24.5% |
75.5% |
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20.0% |
80.0% |
General and administrative (“G&A”) expenses decreased
Personnel expense decreased
Occupancy and equipment expense decreased
Advertising expense decreased
Interest expense for the quarter ended
Other key return ratios for the first quarter of fiscal 2025 included a 7.1% return on average assets and a return on average equity of 18.9% (both on a trailing twelve-month basis).
The Company repurchased 79,324 shares of its common stock on the open market at an aggregate purchase price of approximately
About
Founded in 1962,
First quarter conference call
The senior management of
During the conference call, the Company may discuss and answer questions concerning business and financial developments and trends that have occurred after quarter-end. The Company’s responses to questions, as well as other matters discussed during the conference call, may contain or constitute information that has not been disclosed previously.
Cautionary Note Regarding Forward-looking Information
This press release may contain various “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, that represent the Company’s current expectations or beliefs concerning future events. Statements other than those of historical fact, as well as those identified by words such as “anticipate,” “estimate,” intend,” “plan,” “expect,” “project,” “believe,” “may,” “will,” “should,” “would,” “could,” “probable” and any variation of the foregoing and similar expressions are forward-looking statements. Such forward-looking statements are inherently subject to risks and uncertainties. The Company’s actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause actual results or performance to differ from the expectations expressed or implied in such forward-looking statements include the following: recently enacted, proposed or future legislation and the manner in which it is implemented; changes in the
These and other factors are discussed in greater detail in Part I, Item 1A,“Risk Factors” in the Company’s most recent annual report on Form 10-K for the fiscal year ended
WORLD ACCEPTANCE CORPORATION AND SUBSIDIARIES |
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CONSOLIDATED STATEMENTS OF OPERATIONS |
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(unaudited and in thousands, except per share amounts) |
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Three months ended |
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2024 |
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2023 |
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Revenues: |
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Interest and fee income |
$ |
111,161 |
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$ |
116,619 |
Insurance and other income, net |
|
18,366 |
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|
22,705 |
Total revenues |
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129,527 |
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139,324 |
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Expenses: |
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Provision for credit losses |
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45,419 |
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|
46,602 |
General and administrative expenses: |
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Personnel |
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36,976 |
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|
41,792 |
Occupancy and equipment |
|
12,164 |
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|
12,620 |
Advertising |
|
1,656 |
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|
2,750 |
Amortization of intangible assets |
|
1,006 |
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|
1,069 |
Other |
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9,610 |
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|
9,894 |
Total general and administrative expenses |
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61,412 |
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68,125 |
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Interest expense |
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9,769 |
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|
12,242 |
Total expenses |
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116,600 |
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126,969 |
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Income before income taxes |
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12,927 |
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12,355 |
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Income tax expense |
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2,980 |
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2,816 |
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Net income |
$ |
9,947 |
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$ |
9,539 |
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Net income per common share, diluted |
$ |
1.79 |
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$ |
1.62 |
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Weighted average diluted shares outstanding |
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5,568 |
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5,891 |
WORLD ACCEPTANCE CORPORATION AND SUBSIDIARIES |
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CONSOLIDATED BALANCE SHEETS |
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(unaudited and in thousands) |
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ASSETS |
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Cash and cash equivalents |
$ |
11,119 |
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$ |
11,839 |
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$ |
15,989 |
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Gross loans receivable |
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1,274,819 |
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1,277,149 |
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1,397,966 |
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Less: |
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Unearned interest, insurance and fees |
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(330,334 |
) |
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(326,746 |
) |
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(379,967 |
) |
Allowance for credit losses |
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(109,643 |
) |
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(102,963 |
) |
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(129,343 |
) |
Loans receivable, net |
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834,842 |
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847,440 |
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888,656 |
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Income taxes receivable |
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3,951 |
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3,091 |
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— |
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Operating lease right-of-use assets, net |
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80,866 |
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79,501 |
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79,462 |
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Property and equipment, net |
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22,199 |
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22,897 |
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23,856 |
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Deferred income taxes, net |
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32,425 |
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30,943 |
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43,272 |
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Other assets, net |
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45,599 |
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42,199 |
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41,148 |
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7,371 |
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7,371 |
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7,371 |
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Intangible assets, net |
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10,064 |
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11,070 |
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14,220 |
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Total assets |
$ |
1,048,436 |
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$ |
1,056,351 |
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$ |
1,113,974 |
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LIABILITIES & SHAREHOLDERS' EQUITY |
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Liabilities: |
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Senior notes payable |
$ |
241,728 |
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$ |
223,419 |
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$ |
299,776 |
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Senior unsecured notes payable, net |
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251,014 |
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272,610 |
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285,620 |
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Income taxes payable |
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— |
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— |
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3,812 |
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Operating lease liability |
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83,136 |
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81,921 |
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81,989 |
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Accounts payable and accrued expenses |
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49,947 |
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53,974 |
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45,889 |
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Total liabilities |
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625,825 |
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631,924 |
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717,086 |
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Shareholders' equity |
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422,611 |
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424,427 |
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396,888 |
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Total liabilities and shareholders' equity |
$ |
1,048,436 |
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$ |
1,056,351 |
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$ |
1,113,974 |
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WORLD ACCEPTANCE CORPORATION AND SUBSIDIARIES |
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SELECTED CONSOLIDATED STATISTICS |
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(unaudited and in thousands, except percentages and branches) |
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Three months ended |
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2024 |
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2023 |
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Gross loans receivable |
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$ |
1,274,819 |
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$ |
1,397,966 |
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Average gross loans receivable (1) |
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1,270,677 |
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1,388,662 |
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Net loans receivable (2) |
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944,485 |
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1,017,999 |
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Average net loans receivable (3) |
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942,603 |
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|
1,013,007 |
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Expenses as a percentage of total revenue: |
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Provision for credit losses |
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35.1 |
% |
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|
33.4 |
% |
General and administrative |
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|
47.4 |
% |
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48.9 |
% |
Interest expense |
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|
7.5 |
% |
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8.8 |
% |
Operating income as a % of total revenue (4) |
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17.5 |
% |
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17.7 |
% |
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Loan volume (5) |
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682,197 |
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|
721,234 |
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Net charge-offs as percent of average net loans receivable on an annualized basis |
|
|
16.4 |
% |
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16.9 |
% |
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Return on average assets (trailing 12 months) |
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7.1 |
% |
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3.3 |
% |
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Return on average equity (trailing 12 months) |
|
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18.9 |
% |
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|
10.7 |
% |
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Branches opened or acquired (merged or closed), net |
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(1 |
) |
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(18 |
) |
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Branches open (at period end) |
|
|
1,047 |
|
|
|
1,055 |
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_______________________________________________________
(1) Average gross loans receivable is determined by averaging month-end gross loans receivable over the indicated period, excluding tax advances.
(2) Net loans receivable is defined as gross loans receivable less unearned interest and deferred fees.
(3) Average net loans receivable is determined by averaging month-end gross loans receivable less unearned interest and deferred fees over the indicated period, excluding tax advances.
(4) Operating income is computed as total revenues less provision for credit losses and general and administrative expenses.
(5) Loan volume includes all loan balances originated by the Company. It does not include loans purchased through acquisitions.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240726269263/en/
Executive VP, Chief Financial & Strategy Officer, and Treasurer
(864) 298-9800
Source: