Allowance for Credit Losses and Credit Quality Information

12 Months Ended

Mar. 31, 2023

Receivables [Abstract]

Allowance for Credit Losses and Credit Quality Information

Allowance for Credit Losses and Credit Quality Information

The following is a summary of gross loans receivable by Customer Tenure as of:

Customer Tenure	March 31, 2023		March 31, 2022
0 to 5 months	$	81,803,668	$	198,740,475
6 to 17 months	133,650,188		133,665,566
18 to 35 months	135,396,187		204,940,323
36 to 59 months	244,414,255		214,956,857
60+ months	792,189,216		764,662,319
Tax advance loans	2,562,054		5,823,320
Total gross loans	$	1,390,015,568	$	1,522,788,860

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 Statements 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.

The following tables provide a breakdown of the Company’s gross loans receivable by current payment performance on a recency basis and year of origination at March 31, 2023:

	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	$	1,200,504,088	$	62,076,656	$	1,998,218	$	148,662	$	23,046	$	6,863	$	1,264,757,533
30 - 60 days past due	40,791,746		4,689,867		160,956		42,700		8,504		2,988		45,696,761
61 - 90 days past due	26,319,250		2,572,733		92,088		40,281		884		—		29,025,236
91 or more days past due	41,832,821		5,944,645		160,361		29,494		4,430		2,233		47,973,984
Total	$	1,309,447,905	$	75,283,901	$	2,411,623	$	261,137	$	36,864	$	12,084	$	1,387,453,514
	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	$	1,932,607	$	3,524	$	—	$	—	$	—	$	—	$	1,936,131
30 - 60 days past due	609,844		736		—		—		—		—		610,580
61 - 90 days past due	—		4,845		—		—		—		—		4,845
91 or more days past due	409		10,089		—		—		—		—		10,498
Total	$	2,542,860	$	19,194	$	—	$	—	$	—	$	—	$	2,562,054
Total gross loans													$	1,390,015,568

The following tables provide a breakdown of the Company’s gross loans receivable by current payment performance on a recency basis and year of origination at March 31, 2022:

	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	$	1,322,332,136	$	34,273,199	$	2,665,078	$	152,105	$	21,539	$	3,972	$	1,359,448,029
30 - 60 days past due	49,517,859		2,114,463		247,291		28,011		2,664		—		51,910,288
61 - 90 days past due	36,707,960		989,136		130,763		13,031		5,594		—		37,846,484
91 or more days past due	64,238,626		3,239,753		248,596		24,377		5,386		4,001		67,760,739
Total	$	1,472,796,581	$	40,616,551	$	3,291,728	$	217,524	$	35,183	$	7,973	$	1,516,965,540
	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	$	4,737,741	$	7,033	$	—	$	—	$	—	$	—	$	4,744,774
30 - 60 days past due	1,060,811		1,334		—		—		—		—		1,062,145
61 - 90 days past due	—		432		—		—		—		—		432
91 or more days past due	2,922		13,047		—		—		—		—		15,969
Total	$	5,801,474	$	21,846	$	—	$	—	$	—	$	—	$	5,823,320
Total gross loans													$	1,522,788,860

The following tables provide a breakdown of the Company’s gross loans receivable by current payment performance on a contractual basis and year of origination at March 31, 2023:

	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	$	1,174,237,761	$	53,652,011	$	1,554,144	$	64,233	$	5,142	$	1,491	$	1,229,514,782
30 - 60 days past due	47,346,331		3,661,493		77,857		6,714		—		—		51,092,395
61 - 90 days past due	33,012,804		3,030,052		44,129		7,643		—		—		36,094,628
91 or more days past due	54,851,010		14,940,345		735,493		182,547		31,721		10,593		70,751,709
Total	$	1,309,447,906	$	75,283,901	$	2,411,623	$	261,137	$	36,863	$	12,084	$	1,387,453,514
	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	$	1,932,607	$	—	$	—	$	—	$	—	$	—	$	1,932,607
30 - 60 days past due	609,844		—		—		—		—		—		609,844
61 - 90 days past due	—		—		—		—		—		—		—
91 or more days past due	409		19,194		—		—		—		—		19,603
Total	$	2,542,860	$	19,194	$	—	$	—	$	—	$	—	$	2,562,054
Total gross loans													$	1,390,015,568

The following tables provide a breakdown of the Company’s gross loans receivable by current payment performance on a contractual basis and year of origination at March 31, 2022:

	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	$	1,290,448,366	$	29,913,995	$	1,994,474	$	68,836	$	9,586	$	699	$	1,322,435,956
30 - 60 days past due	57,225,953		1,508,794		91,118		5,519		—		—		58,831,384
61 - 90 days past due	45,276,797		1,271,187		96,233		986		—		—		46,645,203
91 or more days past due	79,845,465		7,922,574		1,109,903		142,183		25,598		7,274		89,052,997
Total	$	1,472,796,581	$	40,616,550	$	3,291,728	$	217,524	$	35,184	$	7,973	$	1,516,965,540
	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	$	4,737,741	$	—	$	—	$	—	$	—	$	—	$	4,737,741
30 - 60 days past due	1,060,329		—		—		—		—		—		1,060,329
61 - 90 days past due	—		—		—		—		—		—		—
91 or more days past due	3,404		21,846		—		—		—		—		25,250
Total	$	5,801,474	$	21,846	$	—	$	—	$	—	$	—	$	5,823,320
Total gross loans													$	1,522,788,860

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 looks to borrower characteristics as a way to disaggregate loans into pools sharing similar risks.

In determining the allowance for credit losses, the Company examined four borrower risk metrics as noted below.

1.Borrower type

2.Active months

3.Prior loan performance

4.Customer Tenure

To determine how well each metric predicts default risk, the Company used 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:

1.0 to 5 months

2.6 to 17 months

3.18 to 35 months

4.36 to 59 months

5.60+ months

Management will continue to monitor this credit metric on a quarterly basis.

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 first pay success for new borrowers, 60-89 day delinquencies on a recency basis, FICO scores, percent of loan balances that are paying and percentage of gross loans that are acquired loans. From time to time, the Company will make changes, as deemed appropriate, to our new borrower (NB) underwriting guidance. As a result, management also considers whether a change in our NB underwriting might suggest a change is needed to the allowance for credit losses. As of March 31, 2023, there were no current credit conditions or other factors considered significant enough to warrant a change to the allowance for credit losses.

Due to the short term nature of the loan portfolio, forecasted changes in macro-economic 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.

The following table is an aging analysis on a recency basis at amortized cost of the Company’s gross loans receivable at March 31, 2023:

			Days Past Due - Recency Basis
Customer Tenure	Current		30 - 60		61 - 90		Over 90		Total Past Due		Total Loans
0 to 5 months	$	64,615,315	$	5,451,276	$	4,407,751	$	7,329,327	$	17,188,354	$	81,803,669
6 to 17 months	113,946,833		6,527,355		4,655,441		8,520,559		19,703,355		133,650,188
18 to 35 months	120,125,820		5,336,994		3,727,331		6,206,041		15,270,366		135,396,186
36 to 59 months	217,851,608		7,871,872		4,713,501		7,525,438		20,110,811		237,962,419
60+ months	748,217,957		20,509,264		11,521,212		18,392,619		50,423,095		798,641,052
Tax advance loans	1,936,131		610,580		4,845		10,498		625,923		2,562,054
Total gross loans	1,266,693,664		46,307,341		29,030,081		47,984,482		123,321,904		1,390,015,568
Unearned interest, insurance and fees	(343,255,876)		(12,548,627)		(7,866,737)		(13,003,109)		(33,418,473)		(376,674,349)
Total net loans	$	923,437,788	$	33,758,714	$	21,163,344	$	34,981,373	$	89,903,431	$	1,013,341,219
Percentage of period-end gross loans receivable			3.3%		2.1%		3.5%		8.9%

The following table is an aging analysis on a recency basis at amortized cost of the Company’s gross loans receivable at March 31, 2022:

			Days Past Due - Recency Basis
Customer Tenure	Current		30 - 60		61 - 90		Over 90		Total Past Due		Total Loans
0 to 5 months	$	145,168,588	$	13,450,365	$	14,196,717	$	25,924,805	$	53,571,887	$	198,740,475
6 to 17 months	116,065,794		5,548,699		4,148,743		7,902,330		17,599,772		133,665,566
18 to 35 months	183,697,553		7,220,814		4,903,686		9,118,270		21,242,770		204,940,323
36 to 59 months	193,820,229		5,951,049		3,452,087		5,712,662		15,115,798		208,936,027
60+ months	720,695,865		19,739,361		11,145,251		19,102,672		49,987,284		770,683,149
Tax advance loans	4,744,774		1,062,145		432		15,969		1,078,546		5,823,320
Total gross loans	1,364,192,803		52,972,433		37,846,916		67,776,708		158,596,057		1,522,788,860
Unearned interest, insurance and fees	(361,055,818)		(14,020,016)		(10,016,802)		(17,938,208)		(41,975,027)		(403,030,844)
Total net loans	$	1,003,136,985	$	38,952,417	$	27,830,114	$	49,838,500	$	116,621,030	$	1,119,758,016
Percentage of period-end gross loans receivable			3.5%		2.5%		4.5%		10.4%

The following table provides a breakdown of the Company’s gross loans receivable by current payment performance on a contractual basis and year of origination at March 31, 2023:

			Days Past Due - Contractual Basis
Loans	Current		30 - 60		61 - 90		Over 90		Total Past Due		Total Loans
0 to 5 months	$	61,850,144	$	5,320,659	$	4,864,498	$	9,768,369	$	19,953,526	$	81,803,670
6 to 17 months	109,694,389		6,892,610		5,613,468		11,449,721		23,955,799		133,650,188
18 to 35 months	115,711,781		5,721,694		4,499,010		9,463,701		19,684,405		135,396,186
36 to 59 months	212,104,582		8,751,303		5,917,982		11,188,551		25,857,836		237,962,418
60+ months	730,153,886		24,406,129		15,199,670		28,881,367		68,487,166		798,641,052
Tax advance loans	1,932,607		609,844		—		19,603		629,447		2,562,054
Total gross loans	$	1,231,447,389	$	51,702,239	$	36,094,628	$	70,771,312	$	158,568,179	$	1,390,015,568
Unearned interest, insurance and fees	$	(333,704,639)	$	(14,010,568)	$	(9,781,128)	$	(19,178,014)	$	(42,969,710)	$	(376,674,349)
Total net loans	$	897,742,750	$	37,691,671	$	26,313,500	$	51,593,298	$	115,598,469	$	1,013,341,219
Percentage of period-end gross loans receivable			3.7%		2.6%		5.1%		11.4%

The following table provides a breakdown of the Company’s gross loans receivable by current payment performance on a contractual basis and year of origination at March 31, 2022:

			Days Past Due - Contractual Basis
Loans	Current		30 - 60		61 - 90		Over 90		Total Past Due		Total Loans
0 to 5 months	$	140,570,461	$	14,090,712	$	15,380,836	$	28,698,466	$	58,170,014	$	198,740,475
6 to 17 months	112,465,841		6,032,347		4,922,939		10,244,439		21,199,725		133,665,566
18 to 35 months	177,565,328		8,067,815		6,273,351		13,033,829		27,374,995		204,940,323
36 to 59 months	188,849,569		6,994,891		4,624,136		8,467,431		20,086,458		208,936,027
60+ months	702,984,756		23,645,619		15,443,941		28,608,833		67,698,393		770,683,149
Tax advance loans	4,737,742		1,060,329		—		25,249		1,085,578		5,823,320
Total gross loans	$	1,327,173,697	$	59,891,713	$	46,645,203	$	89,078,247	$	195,615,163	$	1,522,788,860
Unearned interest, insurance and fees	$	(351,258,109)	$	(15,851,316)	$	(12,345,412)	$	(23,576,007)	$	(51,772,735)	$	(403,030,844)
Total net loans	$	975,915,588	$	44,040,397	$	34,299,791	$	65,502,240	$	143,842,428	$	1,119,758,016
Percentage of period-end gross loans receivable			3.9%		3.1%		5.8%		12.8%

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 income 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 twelve months ended March 31, 2023 and March 31, 2022, the Company reversed a total of $36.5 million and $30.6 million, respectively of unpaid accrued interest against interest income.

The following table presents the amortized cost basis of loans on nonaccrual status as of March 31, 2023 and March 31, 2022, as well as interest income recognized on nonaccrual loans for the years ended March 31, 2023, 2022, and 2021:

	Nonaccrual Loans Receivable
Customer Tenure	As of March 31, 2023		As of March 31, 2022		Interest Income Recognized Fiscal 2023		Interest Income Recognized Fiscal 2022		Interest Income Recognized Fiscal 2021
0 to 5 months	$	15,781,494	$	45,227,510	$	2,032,098	$	1,485,356	$	1,705,371
6 to 17 months	18,288,714		15,879,250		1,815,167		1,662,082		2,433,144
18 to 35 months	15,551,806		20,745,106		2,385,356		2,292,776		2,195,160
36 to 59 months	19,175,410		14,232,388		2,326,640		1,602,011		1,609,059
60+ months	49,855,801		47,565,819		7,047,726		5,615,521		6,747,722
Tax advance loans	19,603		25,249		—		—		—
Unearned interest, insurance and fees	(32,158,640)		(38,026,011)		—		—		—
Total	$	86,514,188	$	105,649,311	$	15,606,987	$	12,657,746	$	14,690,456

As of March 31, 2023 and March 31, 2022, there were no loans receivable 61 days or more past due, not on nonaccrual status, and no loans receivable with no related allowance for credit losses.

The following is a summary of the changes in the allowance for credit losses for the years ended March 31, 2023, 2022, and 2021:

	2023		2022		2021
Balance at beginning of period	$	134,242,862	$	91,722,288	$	96,487,856
Impact of ASC 326 adoption	—		—		28,628,368
Provision for credit losses	259,463,199		186,207,341		86,244,714
Charge-offs1	(302,380,145)		(164,747,552)		(141,270,125)
Recoveries2	34,226,817		21,060,785		21,631,475
Net charge-off	(268,153,328)		(143,686,767)		(119,638,650)
Balance at end of period	$	125,552,733	$	134,242,862	$	91,722,288