During the first quarter of fiscal 2021, we adopted ASU 2016-13, which replaces the incurred loss methodology for determining our provision for credit losses and allowance for credit losses with an expected loss methodology that is referred to as the CECL model, using the modified retrospective approach. Upon adoption, the total allowance for credit losses increased by $28.6 million, with no impact to the consolidated statement of operations.

Based on the Company’s loan products, the purpose and the term, current payment performance is used to assess the capability of the borrower to repay contractual obligations of the loan agreements as scheduled. Current payment performance is monitored by management on a daily basis. On an as needed basis, qualitative information may be taken into consideration if new information arises related to the customer’s ability to repay the loan. The Company’s payment performance buckets are as follows: current, 30-60 days past due, 61-90 days past due, 91 days or more past due.


	Term Loans By Origination
Loans	Up to 1 Year Ago		Between 1 and 2 Years Ago		Between 2 and 3 Years Ago		Between 3 and 4 Years Ago		Between 4 and 5 Years Ago		More than 5 Years Ago		Total
Current	$	970,526,682	$	45,769,052	$	2,102,732	$	154,890	$	14,444	$	831	$	1,018,568,631
30 - 60 days past due	21,862,634		2,011,261		153,417		21,426		3,500		2,069		24,054,307
61 - 90 days past due	18,039,010		1,208,936		88,119		11,800		571		—		19,348,436
91 or more days past due	31,126,328		3,120,210		183,434		14,028		14,708		168		34,458,876
Total	$	1,041,554,654	$	52,109,459	$	2,527,702	$	202,144	$	33,223	$	3,068	$	1,096,430,250

	Term Loans By Origination
Tax advance loans	Up to 1 Year Ago		Between 1 and 2 Years Ago		Between 2 and 3 Years Ago		Between 3 and 4 Years Ago		Between 4 and 5 Years Ago		More than 5 Years Ago
Current	$	7,583,075	$	9,360	$	—	$	—	$	—	$	—	$	7,592,435
30 - 60 days past due	686,667		1,423		—		—		—		—		688,090
61 - 90 days past due	—		—		321		—		—		—		321
91 or more days past due	—		34,509		656		—		—		—		35,165
Total	$	8,269,742	$	45,292	$	977	$	—	$	—	$	—	$	8,316,011
Total gross loans													$	1,104,746,261


	Term Loans By Origination
Loans	Up to 1 Year Ago		Between 1 and 2 Years Ago		Between 2 and 3 Years Ago		Between 3 and 4 Years Ago		Between 4 and 5 Years Ago		More than 5 Years Ago		Total
Current	$	948,353,853	$	39,661,944	$	1,522,148	$	83,073	$	1,790	$	831	$	989,623,639
30 - 60 days past due	29,300,148		1,872,816		72,187		1,322		—		—		31,246,473
61 - 90 days past due	23,075,264		1,363,196		75,343		567		—		—		24,514,370
91 or more days past due	40,825,388		9,211,503		858,024		117,183		31,433		2,237		51,045,768
Total	$	1,041,554,653	$	52,109,459	$	2,527,702	$	202,145	$	33,223	$	3,068	$	1,096,430,250
	Term Loans By Origination
Tax advance loans	Up to 1 Year Ago		Between 1 and 2 Years Ago		Between 2 and 3 Years Ago		Between 3 and 4 Years Ago		Between 4 and 5 Years Ago		More than 5 Years Ago		Total
Current	$	7,583,075	$	—	$	—	$	—	$	—	$	—	$	7,583,075
30 - 60 days past due	686,667		—		—		—		—		—		686,667
61 - 90 days past due	—		—		—		—		—		—		—
91 or more days past due	—		45,292		977		—		—		—		46,269
Total	$	8,269,742	$	45,292	$	977	$	—	$	—	$	—	$	8,316,011
Total gross loans													$	1,104,746,261

The allowance for credit losses is applied to amortized cost, which is defined as the amount at which a financing receivable is originated, and net of deferred fees and costs, collection of cash, and charge-offs. Amortized cost also includes interest earned but not collected.

Credit Risk is inherent in the business of extending loans to borrowers and is continuously monitored by management and reflected within the allowance for credit losses for loans. The allowance for credit losses is an estimate of expected losses inherent within the Company’s gross loans receivable portfolio. In estimating the allowance for credit losses, loans with similar risk characteristics are aggregated into pools and collectively assessed. The Company’s loan products have generally the same terms therefore the Company looked to borrower characteristics as a way to disaggregate loans into pools sharing similar risks.

To determine how well each metric predicts default risk the Company uses loss rate data over an observation period of twelve months at the loan level.The information value was then calculated for each metric. From this analysis management determined the metric that had the strongest predictor of default risk was Customer Tenure. The Customer Tenure buckets used in the allowance for credit loss calculation are:

Management estimates an allowance for each Customer Tenure bucket by performing a historical migration analysis of loans in that bucket for the twelve most recent historical twelve-month migration periods, adjusted for seasonality. All loans that are greater than 90 days past due on a recency basis and not written off as of the reporting date are reserved for at 100% of the outstanding balance, net of a calculated Rehab Rate. Management considers whether current credit conditions might suggest a change is needed to the allowance for credit losses by monitoring trends in 60-day delinquencies, FICO scores and average loan size as compared to metrics in the historical migration period. Due to the short term nature of the loan portfolio, forecasted changes in macroeconomic variables such as unemployment do not have a significant impact on loans outstanding at the end of a particular reporting period. Therefore, management develops a reasonable and supportable forecast of losses by comparing the most recent 6-month loss curves as compared to historical loss curves to see if there are significant changes in borrower behavior that may indicate the historical migration rates should be adjusted. If an adjustment is made as a result of the forecast, then the Company has elected to immediately revert back to historical experience past the forecast period.


			Days Past Due - Recency Basis
Customer Tenure	Current		30 - 60		61 - 90		Over 90		Total Past Due		Total Loans
0 to 5 months	$	72,702,970	$	4,799,102	$	5,680,380	$	9,195,642	$	19,675,124	$	92,378,094
6 to 17 months	94,466,209		3,187,347		2,798,411		6,290,155		12,275,913		106,742,122
18 to 35 months	158,217,605		3,570,696		2,592,402		4,981,208		11,144,306		169,361,911
36 to 59 months	123,542,346		2,432,489		1,753,291		2,927,501		7,113,281		130,655,627
60+ months	569,639,500		10,064,674		6,523,952		11,064,370		27,652,996		597,292,496

Tax advance loans	7,592,435		688,090		321		35,165		723,576		8,316,011
Total gross loans	1,026,161,065		24,742,398		19,348,757		34,494,041		78,585,196		1,104,746,261
Unearned interest, insurance and fees	(259,492,219)		(6,256,776)		(4,892,850)		(8,722,739)		(19,872,365)		(279,364,584)
Total net loans	$	766,668,846	$	18,485,622	$	14,455,907	$	25,771,302	$	58,712,831	$	825,381,677

Percentage of period-end gross loans receivable			2.2%		1.8%		3.1%		7.1%


			Days Past Due - Contractual Basis
Loans	Current		30 - 60		61 - 90		Over 90		Total Past Due		Total Loans
0 to 5 months	$	70,532,439	$	5,245,878	$	6,019,264	$	10,580,514	$	21,845,656	$	92,378,095
6 to 17 months	90,679,304		3,936,937		3,267,446		8,858,434		16,062,817		106,742,121
18 to 35 months	153,922,334		4,471,202		3,488,629		7,479,745		15,439,576		169,361,910
36 to 59 months	120,168,698		3,229,253		2,337,625		4,920,052		10,486,930		130,655,628
60+ months	554,320,865		14,363,203		9,401,406		19,207,022		42,971,631		597,292,496

Tax advance loans	7,583,075		686,667		—		46,269		732,936		8,316,011
Total gross loans	$	997,206,715	$	31,933,140	$	24,514,370	$	51,092,036	$	107,539,546	$	1,104,746,261
Unearned interest, insurance and fees	$	(252,170,339)	$	(8,075,147)	$	(6,199,113)	$	(12,919,985)	$	(27,194,245)	$	(279,364,584)
Total net loans	$	745,036,376	$	23,857,993	$	18,315,257	$	38,172,051	$	80,345,301	$	825,381,677

Percentage of period-end gross loans receivable			2.9%		2.2%		4.6%		9.7%

The Company elected not to record an allowance for credit losses for accrued interest as outlined in ASC 326-20-30-5A. Loans are placed on nonaccrual status when management determines that the full payment of principal and collection of interest according to contractual terms is no longer likely. The accrual of interest is discontinued when a loan is 61 days or more past the contractual due date. When the interest accrual is discontinued, all unpaid accrued interest is reversed against interest income. While a loan is on nonaccrual status, interest revenue is recognized only when a payment is received. Once a loan moves to nonaccrual status, it remains in nonaccrual status until it is paid out, charged off or refinanced. During the three months ended March 31, 2021, the Company reversed a total of $6.2 million of unpaid accrued interest against interest income. During the twelve months ended March 31, 2021, the Company reversed a total of $22.4 million of unpaid accrued interest against interest income.

The following table presents the amortized cost basis of loans on nonaccrual status as of the beginning of the reporting period and the end of the reporting period and the amortized cost basis of nonaccrual loans without related expected credit loss. It also shows year-to-date interest income recognized on nonaccrual loans:


	Nonaccrual Financial Assets
Customer Tenure	As of March 31, 2021		As of March 31, 2020		Financial Assets 61 Days or More Past Due, Not on Nonaccrual Status		Nonaccrual Financial Assets With No Allowance as of March 31, 2021		Interest Income Recognized Fiscal 2021
0 to 5 months	$	17,191,922	$	26,040,593	$	—	$	—	$	1,705,371
6 to 17 months	13,211,641		17,466,450		—		—		2,433,144
18 to 35 months	12,088,377		13,723,295		—		—		2,195,160
36 to 59 months	8,161,951		10,071,288		—		—		1,609,059
60+ months	31,925,232		44,293,545		—		—		6,747,722

Tax advance loans	46,269		41,573		—		—		—
Unearned interest, insurance and fees	(20,894,036)		(28,510,140)
Total	$	61,731,356	$	83,126,604	$	—	$	—	$	14,690,456


	2021		2020	2019
Balance at beginning of period	$	96,487,856	81,519,624	66,088,139
Impact of ASC 326 adoption	28,628,368		—	—
Provision for loan losses	86,244,714		181,730,182	148,426,578
Loan losses	(141,270,125)		(183,439,199)	(148,308,199)
Recoveries	21,631,475		16,677,249	15,313,106

Balance at end of period	$	91,722,288	96,487,856	81,519,624

Under the prior incurred loss methodology, loss contingencies were evaluated as: probable, reasonably possible, or remote. If, at the date of financial statement presentation, information was available that indicated an asset had been impaired and the amount of loss could be reasonably estimated, then an allowance for that loss could be recorded. Recording an allowance for a loss that was considered reasonably possible or remote was not permitted. With the adoption of ASC 326, the Company considers the lifetime potential for losses at the point of origination and records an allowance for that potential, at that point in time, removing the necessity of differentiation between the three loss contingency concepts and impairment. The following disclosures are presented under previously applicable GAAP.


March 31, 2020	Loans individually evaluated for impairment (impaired loans)		Loans collectively evaluated for impairment	Total
Gross loans in bankruptcy, excluding contractually delinquent	$	5,165,752	—	5,165,752
Gross loans contractually delinquent	70,719,727		—	70,719,727
Loans not contractually delinquent and not in bankruptcy	—		1,133,985,887	1,133,985,887
Gross loan balance	75,885,479		1,133,985,887	1,209,871,366
Unearned interest and fees	(16,848,762)		(292,131,962)	(308,980,724)
Net loans	59,036,717		841,853,925	900,890,642
Allowance for loan losses	(54,090,509)		(42,397,347)	(96,487,856)
Loans, net of allowance for loan losses	$	4,946,208	799,456,578	804,402,786

The average net balance of impaired loans was $57.2 million, and $47.0 million, respectively, for the years ended March 31, 2020, and 2019. It is not practicable to compute the amount of interest earned on impaired loans, nor is it practicable to compute the interest income recognized using the cash-basis method during the period such loans were impaired.

The following is an assessment of the credit quality for March 31, 2020:



Credit risk
Consumer loans- non-bankrupt accounts	$	1,203,552,152
Consumer loans- bankrupt accounts	6,319,214
Total gross loans	1,209,871,366

Consumer credit exposure
Credit risk profile based on payment activity, performing	1,104,130,714
Contractual non-performing, 61 days or more delinquent (1)	105,740,652
Total gross loans	1,209,871,366

Credit risk profile based on customer type
New borrower	124,800,193
Former borrower	127,108,125
Refinance	935,448,882
Delinquent refinance	22,514,166
Total gross loans	$	1,209,871,366


	March 31, 2020
Contractual basis:
30-60 days past due	$	49,137,102
61-90 days past due	35,020,925
91 days or more past due	70,719,727
Total	$	154,877,754

Percentage of period-end gross loans receivable	12.8		%

Recency basis:
30-60 days past due	$	48,206,910
61-90 days past due	28,450,942
91 days or more past due	50,669,837
Total	$	127,327,689

Percentage of period-end gross loans receivable	10.5		%