LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES

3 Months Ended

Jun. 30, 2023

Receivables [Abstract]

LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES

LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES

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

Customer Tenure	June 30, 2023		March 31, 2023
0 to 5 months	$	77,832,233	$	81,803,668
6 to 17 months	115,061,651		133,650,188
18 to 35 months	149,142,504		135,396,187
36 to 59 months	240,921,979		244,414,255
60+ months	813,633,836		792,189,216
Tax advance loans	1,373,718		2,562,054
Total gross loans	$	1,397,965,921	$	1,390,015,568

Current payment performance is used to assess the capability of the borrower to repay contractual obligations of the loan agreements as scheduled, which 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 table provides a breakdown of the Company’s gross loans receivable by current payment performance on a recency basis and year of origination at June 30, 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	$	1,192,066,728	$	77,308,971	$	3,044,992	$	120,623	$	33,744	$	8,848	$	1,272,583,906
30 - 60 days past due	40,945,038		6,398,969		305,901		21,491		9,068		857		47,681,324
61 - 90 days past due	24,455,047		4,170,062		166,843		34,662		6,921		—		28,833,535
91 or more days past due	38,396,407		8,793,831		285,866		9,021		8,313		—		47,493,438
Total	$	1,295,863,220	$	96,671,833	$	3,803,602	$	185,797	$	58,046	$	9,705	$	1,396,592,203
	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	$	8,436	$	2,475	$	—	$	—	$	—	$	—	$	10,911
30 - 60 days past due	92,644		406		—		—		—		—		93,050
61 - 90 days past due	150,173		376		—		—		—		—		150,549
91 or more days past due	1,118,587		621		—		—		—		—		1,119,208
Total	$	1,369,840	$	3,878	$	—	$	—	$	—	$	—	$	1,373,718
Total gross loans													$	1,397,965,921

The following table provides 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 table provides a breakdown of the Company’s gross loans receivable by current payment performance on a contractual basis and year of origination at June 30, 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	$	1,171,894,227	$	67,248,005	$	2,360,641	$	41,757	$	14,047	$	3,465	$	1,241,562,142
30 - 60 days past due	45,623,659		5,538,291		133,436		6,006		—		—		51,301,392
61 - 90 days past due	29,268,423		4,820,038		126,494		5,572		—		—		34,220,527
91 or more days past due	49,076,912		19,065,498		1,183,032		132,462		43,999		6,239		69,508,142
Total	$	1,295,863,221	$	96,671,832	$	3,803,603	$	185,797	$	58,046	$	9,704	$	1,396,592,203
	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	$	—	$	—	$	—	$	—	$	—	$	—	$	—
30 - 60 days past due	87,950		—		—		—		—		—		87,950
61 - 90 days past due	164,821		—		—		—		—		—		164,821
91 or more days past due	1,117,069		3,878		—		—		—		—		1,120,947
Total	$	1,369,840	$	3,878	$	—	$	—	$	—	$	—	$	1,373,718
Total gross loans													$	1,397,965,921

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:

	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 table provides a breakdown of the Company’s gross charge-offs by year of origination at June 30, 2023:

	Gross Charge-offs by Origination
Origination by Calendar Year	Loans		Tax advance loans		Total
2018 and prior	$	5,007	$	—	$	5,007
2019	12,727		—		12,727
2020	104,287		—		104,287
2021	2,943,366		—		2,943,366
2022	47,396,816		4,627		47,401,443
2023	253,212		3,000		256,212
Total	$	50,715,415	$	7,627	$	50,723,042

The following table provides a breakdown of the Company’s gross charge-offs by year of origination at June 30, 2022:

	Gross Charge-offs by Origination
Origination by Calendar Year	Loans		Tax advance loans		Total
2017 and prior	$	5,663	$	—	$	5,663
2018	13,855		—		13,855
2019	138,663		—		138,663
2020	1,509,992		—		1,509,992
2021	65,867,200		14,163		65,881,363
2022	1,649,742		67,104		1,716,846
Total	$	69,185,115	$	81,267	$	69,266,382

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.

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 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:

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. 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 underwriting guidance. As a result, management also considers whether a change in our new borrower underwriting might suggest a change is needed to the allowance for credit losses. If a change is determined necessary, then the Company has elected to immediately revert back to historical experience past the forecast 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 six-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 management determines that historical migration rates should be adjusted to reflect expected credit losses, a qualitative adjustment is made to reflect management's judgment regarding observable changes in recent or expected economic trends and conditions, portfolio composition, or other significant events or conditions that affect the current estimate.

The following table presents a roll forward of the allowance for credit losses for the three months ended June 30, 2023 and 2022:

	Three months ended June 30,
	2023		2022
Beginning balance	$	125,552,733	$	134,242,862
Provision for credit losses	46,602,012		85,822,267
Charge-offs	(50,723,042)		(69,266,382)
Recoveries1	7,911,285		4,851,932
Net charge-offs	(42,811,757)		(64,414,450)
Ending Balance	$	129,342,988	$	155,650,679

The following table is an aging analysis on a recency basis at amortized cost of the Company’s gross loans receivable at June 30, 2023:

			Days Past Due - Recency Basis
Customer Tenure	Current		30 - 60		61 - 90		Over 90		Total Past Due		Total Loans
0 to 5 months	$	61,192,949	$	5,159,304	$	3,946,507	$	7,533,473	$	16,639,284	$	77,832,233
6 to 17 months	97,270,965		6,044,736		4,167,086		7,578,864		17,790,686		115,061,651
18 to 35 months	133,608,163		6,116,113		3,508,885		5,909,343		15,534,341		149,142,504
36 to 59 months	219,635,566		8,468,545		4,959,167		7,858,701		21,286,413		240,921,979
60+ months	760,876,263		21,892,627		12,251,890		18,613,056		52,757,573		813,633,836
Tax advance loans	10,912		93,049		150,549		1,119,208		1,362,806		1,373,718
Total gross loans	1,272,594,818		47,774,374		28,984,084		48,612,645		125,371,103		1,397,965,921
Unearned interest, insurance and fees	(345,890,705)		(12,985,054)		(7,877,861)		(13,212,895)		(34,075,810)		(379,966,515)
Total net loans	$	926,704,113	$	34,789,320	$	21,106,223	$	35,399,750	$	91,295,293	$	1,017,999,406
Percentage of period-end gross loans receivable			3.4%		2.1%		3.5%		9.0%

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	$	64,615,314	$	5,451,276		$	4,407,751		$	7,329,327		$	17,188,354		$	81,803,668
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	120,125,821		5,336,994			3,727,331			6,206,041			15,270,366			135,396,187
36 to 59 months	223,734,062		8,070,011			4,839,000			7,771,182			20,680,193			244,414,255
60+ months	742,335,503		20,311,125			11,395,713			18,146,875			49,853,713			792,189,216
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 contractual basis at amortized cost of the Company’s gross loans receivable at June 30, 2023:

			Days Past Due - Contractual Basis
Customer Tenure	Current		30 - 60		61 - 90		Over 90		Total Past Due			Total Loans
0 to 5 months	$	59,258,540	$	5,113,469	$	4,075,349	$	9,384,875	$	18,573,693		$	77,832,233
6 to 17 months	93,865,123		6,127,267		4,571,045		10,498,216		21,196,528			115,061,651
18 to 35 months	129,848,141		6,471,807		4,158,292		8,664,264		19,294,363			149,142,504
36 to 59 months	214,011,449		9,223,244		5,966,254		11,721,032		26,910,530			240,921,979
60+ months	744,578,889		24,365,605		15,449,587		29,239,755		69,054,947			813,633,836
Tax advance loans	—		87,950		164,821		1,120,947		1,373,718			1,373,718
Total gross loans	1,241,562,142		51,389,342		34,385,348		70,629,089		156,403,779			1,397,965,921
Unearned interest, insurance and fees	(337,456,038)		(13,967,600)		(9,345,922)		(19,196,955)		(42,510,477)			(379,966,515)
Total net loans	$	904,106,104	$	37,421,742	$	25,039,426	$	51,432,134	$	113,893,302		$	1,017,999,406
Percentage of period-end gross loans receivable			3.7%		2.5%		5.1%		11.3		%

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

			Days Past Due - Contractual Basis
Customer Tenure	Current		30 - 60			61 - 90			Over 90			Total Past Due			Total Loans
0 to 5 months	$	61,850,142	$	5,320,659		$	4,864,498		$	9,768,369		$	19,953,526		$	81,803,668
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	115,711,782		5,721,694			4,499,010			9,463,701			19,684,405			135,396,187
36 to 59 months	217,821,239		8,991,995			6,078,488			11,522,533			26,593,016			244,414,255
60+ months	724,437,230		24,165,437			15,039,164			28,547,385			67,751,986			792,189,216
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 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 June 30, 2023 and June 30, 2022, the Company reversed a total of $6.3 million and $9.0 million, respectively, 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, as well as interest income recognized on nonaccrual loans for the three months ended June 30, 2023 and 2022:

	Nonaccrual Loans Receivable
Customer Tenure	As of June 30, 2023		As of March 31, 2023		Interest Income Recognized for the three months ended June 30, 2023		Interest Income Recognized for the three months ended June 30, 2022
0 to 5 months	$	14,146,363	$	15,781,494	$	326,773	$	503,963
6 to 17 months	15,831,823		18,288,714		476,870		378,450
18 to 35 months	13,705,732		15,551,806		464,668		628,781
36 to 59 months	18,983,213		19,745,397		609,507		503,362
60+ months	48,292,974		49,285,814		1,737,871		1,658,281
Tax advance loans	1,299,860		19,603		—		—
Unearned interest, insurance and fees	(30,512,209)		(32,158,640)		—		—
Total	$	81,747,756	$	86,514,188	$	3,615,689	$	3,672,837

As of June 30, 2023 and March 31, 2023, there were no loans receivable 61 days or more past due, not on nonaccrual status, and no loans receivable on nonaccrual status with no related allowance for credit losses.