LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES

3 Months Ended

Jun. 30, 2024

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, 2024		March 31, 2024
0 to 5 months	$	67,870,166	$	73,699,568
6 to 17 months	74,677,636		69,616,739
18 to 35 months	140,903,386		140,340,728
36 to 59 months	164,922,673		181,399,293
60+ months	821,331,631		799,703,920
TALs	5,113,765		12,389,008
Total gross loans	$	1,274,819,257	$	1,277,149,256

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. 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.

All loans, except for TALs, 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. The weighted average Rehab Rate at June 30, 2024 and March 31, 2024 was 5.0% and 4.9%, respectively. A loan is charged off within the allowance for credit losses in the month following when an account reaches 120 days past due on a recency basis, subject to certain exceptions. Specifically, the Company’s customer accounts in a confirmed bankruptcy are charged off in the month after they reach 60 days past due on a recency basis. The accounts of deceased or incarcerated customers are also charged off in the month after they reach 60 days past due on a recency basis, with the exception of deceased customers with credit life insurance. Subsequent recoveries of amounts charged off, if any, are credited to the allowance.

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, 2024:

	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	$	1,090,434,963	$	62,146,428	$	6,122,255	$	138,949	$	7,803	$	11,419	$	1,158,861,817
30 - 60 days past due	37,896,134		5,117,469		825,854		41,768		7,045		1,029		43,889,299
61 - 90 days past due	23,424,741		3,585,432		381,438		10,974		—		—		27,402,585
91 or more days past due	32,505,250		6,353,303		657,114		26,165		6,139		3,820		39,551,791
Total	$	1,184,261,088	$	77,202,632	$	7,986,661	$	217,856	$	20,987	$	16,268	$	1,269,705,492
	Term Loans By Origination
TALs	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	$	577,952	$	1,500	$	—	$	—	$	—	$	—	$	579,452
30 - 60 days past due	411,505		—		—		—		—		—		411,505
61 - 90 days past due	585,227		—		—		—		—		—		585,227
91 or more days past due	3,537,326		255		—		—		—		—		3,537,581
Total	$	5,112,010	$	1,755	$	—	$	—	$	—	$	—	$	5,113,765
Total gross loans													$	1,274,819,257

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, 2024:

	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	$	1,094,896,350	$	61,853,967	$	4,807,924	$	109,050	$	25,850	$	1,371	$	1,161,694,512
30 - 60 days past due	34,034,537		4,600,615		610,649		10,856		14,076		5,429		39,276,162
61 - 90 days past due	21,874,701		2,154,561		200,117		17,493		204		—		24,247,076
91 or more days past due	34,560,868		4,600,040		364,386		6,151		5,617		5,436		39,542,498
Total	$	1,185,366,456	$	73,209,183	$	5,983,076	$	143,550	$	45,747	$	12,236	$	1,264,760,248
	Term Loans By Origination
TALs	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	$	7,441,660	$	860	$	—	$	—	$	—	$	—	$	7,442,520
30 - 60 days past due	4,942,757		788		—		—		—		—		4,943,545
61 - 90 days past due	—		1,650		—		—		—		—		1,650
91 or more days past due	—		1,293		—		—		—		—		1,293
Total	$	12,384,417	$	4,591	$	—	$	—	$	—	$	—	$	12,389,008
Total gross loans													$	1,277,149,256

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, 2024:

	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	$	1,077,923,932	$	55,336,446	$	4,790,145	$	77,468	$	—	$	5,408	$	1,138,133,399
30 - 60 days past due	40,161,675		4,322,214		409,589		7,360		516		—		44,901,354
61 - 90 days past due	26,639,089		3,965,283		338,414		4,964		708		—		30,948,458
91 or more days past due	39,536,390		13,578,690		2,448,514		128,064		19,763		10,860		55,722,281
Total	$	1,184,261,086	$	77,202,633	$	7,986,662	$	217,856	$	20,987	$	16,268	$	1,269,705,492
	Term Loans By Origination
TALs	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	$	471,939	$	—	$	—	$	—	$	—	$	—	$	471,939
30 - 60 days past due	410,053		—		—		—		—		—		410,053
61 - 90 days past due	629,413		—		—		—		—		—		629,413
91 or more days past due	3,600,605		1,755		—		—		—		—		3,602,360
Total	$	5,112,010	$	1,755	$	—	$	—	$	—	$	—	$	5,113,765
Total gross loans													$	1,274,819,257

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, 2024:

	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	$	1,079,720,968	$	54,770,231	$	3,681,104	$	39,921	$	10,484	$	1,371	$	1,138,224,079
30 - 60 days past due	37,475,784		3,388,380		288,576		1,064		—		—		41,153,804
61 - 90 days past due	26,191,269		2,903,253		208,172		3,430		204		—		29,306,328
91 or more days past due	41,978,436		12,147,320		1,805,223		99,134		35,059		10,865		56,076,037
Total	$	1,185,366,457	$	73,209,184	$	5,983,075	$	143,549	$	45,747	$	12,236	$	1,264,760,248
	Term Loans By Origination
TALs	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	$	7,441,661	$	—	$	—	$	—	$	—	$	—	$	7,441,661
30 - 60 days past due	4,942,757		—		—		—		—		—		4,942,757
61 - 90 days past due	—		—		—		—		—		—		—
91 or more days past due	—		4,590		—		—		—		—		4,590
Total	$	12,384,418	$	4,590	$	—	$	—	$	—	$	—	$	12,389,008
Total gross loans													$	1,277,149,256

The following table provides a breakdown of the Company’s gross charge-offs by year of origination for the three months ended June 30, 2024:

	Three months ended June 30,
	Gross Charge-offs by Origination
Origination Year	Loans		TALs		Total
2020 and prior	$	20,281	$	—	$	20,281
2021	11,268		—		11,268
2022	322,944		—		322,944
2023	4,275,700		—		4,275,700
2024	39,206,136		53,125		39,259,261
2025	—		—		—
Total	$	43,836,329	$	53,125	$	43,889,454

The following table provides a breakdown of the Company’s gross charge-offs by year of origination for the three months ended June 30, 2023:

	Three months ended June 30,
	Gross Charge-offs by Origination
Origination Year	Loans		TALs		Total
2019 and prior	$	6,706	$	—	$	6,706
2020	24,375		—		24,375
2021	153,427		—		153,427
2022	5,416,692		4,388		5,421,080
2023	45,113,128		3,238		45,116,366
2024	1,088		—		1,088
Total	$	50,715,416	$	7,626	$	50,723,042

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. 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, percent of loan balances that are paying and percentage of gross loans that are acquired loans. 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 increase in the allowance for credit losses from March 31, 2024 to June 30, 2024 was primarily due to a seasonally driven increase in expected loss rates.

Due to the short term nature of the loan portfolio, forecasted changes in macroeconomic 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. 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 a change is determined necessary, then the Company has elected to immediately revert back to historical experience past the forecast period. As of June 30, 2024 and March 31, 2024, there were no conditions or other factors considered significant enough to warrant a forecast adjustment.

The following table presents a roll forward of the allowance for credit losses for the three months ended June 30, 2024 and 2023:

	Three months ended June 30,
	2024		2023
Beginning balance	$	102,962,811	$	125,552,733
Provision for credit losses	45,419,007		46,602,012
Charge-offs	(43,889,454)		(50,723,042)
Recoveries1	5,150,999		7,911,285
Net charge-offs	(38,738,455)		(42,811,757)
Ending Balance	$	109,643,363	$	129,342,988

The following table is an aging analysis on a recency basis at amortized cost of the Company’s gross loans receivable at June 30, 2024:

			Days Past Due - Recency Basis
Customer Tenure	Current		30 - 60		61 - 90		Over 90		Total Past Due		Total Loans
0 to 5 months	$	52,065,068	$	4,832,188	$	3,931,350	$	7,041,560	$	15,805,098	$	67,870,166
6 to 17 months	64,749,046		3,815,767		2,490,382		3,622,441		9,928,590		74,677,636
18 to 35 months	125,777,090		6,039,975		3,769,672		5,316,649		15,126,296		140,903,386
36 to 59 months	147,849,164		6,781,282		4,284,121		6,008,106		17,073,509		164,922,673
60+ months	768,421,449		22,420,087		12,927,060		17,563,035		52,910,182		821,331,631
TALs	579,452		411,505		585,227		3,537,581		4,534,313		5,113,765
Total gross loans	1,159,441,269		44,300,804		27,987,812		43,089,372		115,377,988		1,274,819,257
Unearned interest, insurance and fees	(304,015,610)		(8,472,795)		(7,303,512)		(10,542,247)		(26,318,554)		(330,334,164)
Total net loans	$	855,425,659	$	35,828,009	$	20,684,300	$	32,547,125	$	89,059,434	$	944,485,093
Percentage of period-end gross loans receivable			3.5%		2.2%		3.4%		9.1%

The following table is an aging analysis on a recency basis at amortized cost of the Company’s gross loans receivable at March 31, 2024:

			Days Past Due - Recency Basis
Customer Tenure	Current		30 - 60			61 - 90			Over 90			Total Past Due			Total Loans
0 to 5 months	$	56,802,704	$	4,720,149		$	4,496,518		$	7,680,197		$	16,896,864		$	73,699,568
6 to 17 months	60,634,735		3,155,423			2,075,608			3,750,973			8,982,004			69,616,739
18 to 35 months	126,843,010		5,057,256			3,224,662			5,215,800			13,497,718			140,340,728
36 to 59 months	165,694,013		6,159,335			3,519,743			6,026,202			15,705,280			181,399,293
60+ months	751,720,050		20,183,999			10,930,545			16,869,326			47,983,870			799,703,920
TALs	7,442,520		4,943,545			1,650			1,293			4,946,488			12,389,008
Total gross loans	1,169,137,032		44,219,707			24,248,726			39,543,791			108,012,224			1,277,149,256
Unearned interest, insurance and fees	(301,616,958)		(7,677,494)			(6,674,554)			(10,777,130)			(25,129,178)			(326,746,136)
Total net loans	$	867,520,074	$	36,542,213		$	17,574,172		$	28,766,661		$	82,883,046		$	950,403,120
Percentage of period-end gross loans receivable			3.5		%	1.9		%	3.1		%	8.5		%

The following table is an aging analysis on a contractual basis at amortized cost of the Company’s gross loans receivable at June 30, 2024:

			Days Past Due - Contractual Basis
Customer Tenure	Current		30 - 60		61 - 90		Over 90		Total Past Due			Total Loans
0 to 5 months	$	51,122,298	$	4,732,439	$	4,009,253	$	8,006,176	$	16,747,868		$	67,870,166
6 to 17 months	63,479,851		3,661,347		2,576,331		4,960,107		11,197,785			74,677,636
18 to 35 months	123,326,453		5,922,236		4,213,315		7,441,382		17,576,933			140,903,386
36 to 59 months	144,424,256		6,833,482		4,884,425		8,780,510		20,498,417			164,922,673
60+ months	755,780,541		23,751,850		15,265,134		26,534,106		65,551,090			821,331,631
TALs	471,939		410,053		629,413		3,602,360		4,641,826			5,113,765
Total gross loans	1,138,605,338		45,311,407		31,577,871		59,324,641		136,213,919			1,274,819,257
Unearned interest, insurance and fees	(299,657,876)		(8,160,681)		(8,204,664)		(14,310,943)		(30,676,288)			(330,334,164)
Total net loans	$	838,947,462	$	37,150,726	$	23,373,207	$	45,013,698	$	105,537,631		$	944,485,093
Percentage of period-end gross loans receivable			3.6%		2.5%		4.7%		10.8		%

The following table is an aging analysis on a contractual basis at amortized cost of the Company’s gross loans receivable at March 31, 2024:

			Days Past Due - Contractual Basis
Customer Tenure	Current		30 - 60			61 - 90			Over 90			Total Past Due			Total Loans
0 to 5 months	$	55,572,691	$	4,645,860		$	4,784,273		$	8,696,744		$	18,126,877		$	73,699,568
6 to 17 months	58,920,283		2,990,455			2,364,202			5,341,799			10,696,456			69,616,739
18 to 35 months	123,878,546		5,246,778			3,813,284			7,402,120			16,462,182			140,340,728
36 to 59 months	161,614,270		6,388,791			4,435,367			8,960,865			19,785,023			181,399,293
60+ months	738,238,289		21,881,920			13,909,202			25,674,509			61,465,631			799,703,920
TALs	7,441,661		4,942,757			—			4,590			4,947,347			12,389,008
Total gross loans	1,145,665,740		46,096,561			29,306,328			56,080,627			131,483,516			1,277,149,256
Unearned interest, insurance and fees	(296,584,056)		(7,544,366)			(7,936,622)			(14,681,092)			(30,162,080)			(326,746,136)
Total net loans	$	849,081,684	$	38,552,195		$	21,369,706		$	41,399,535		$	101,321,436		$	950,403,120
Percentage of period-end gross loans receivable			3.6		%	2.3		%	4.4		%	10.3		%

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.

The following table presents unpaid accrued interest reversed against interest income by Customer Tenure for the three months ended June 30, 2024 and 2023:

	Three months ended June 30,
	2024		2023
Customer Tenure
0 to 5 months	$	(1,147,060)	$	(1,147,128)
6 to 17 months	(767,769)		(717,671)
18 to 35 months	(870,532)		(1,007,900)
36 to 59 months	(591,258)		(963,733)
60+ months	(2,687,769)		(2,462,048)
Total	$	(6,064,388)	$	(6,298,480)

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, 2024 and 2023:

	Nonaccrual Loans Receivable
Customer Tenure	As of June 30, 2024		As of March 31, 2024		Interest Income Recognized for the three months ended June 30, 2024		Interest Income Recognized for the three months ended June 30, 2023
0 to 5 months	$	12,338,965	$	13,971,062	$	198,802	$	326,773
6 to 17 months	7,968,045		8,507,503		235,464		476,870
18 to 35 months	12,524,214		12,569,729		361,284		464,668
36 to 59 months	14,837,127		15,250,596		471,665		609,507
60+ months	45,787,207		45,091,589		1,462,925		1,737,871
Unearned interest, insurance and fees	(24,313,956)		(24,643,778)		—		—
Total	$	69,141,602	$	70,746,701	$	2,730,140	$	3,615,689

As of June 30, 2024 and March 31, 2024, 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.