QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
A | I.R.S. Employer Identification No. |
Class | Outstanding October 31, 2022 | |||||||
Voting Common Stock, par value $100 per share | ||||||||
Non-Voting Common Stock, no par value |
(a)Exhibits: | |||||
13 | |||||
31.1 | |||||
31.2 | |||||
32.1 | |||||
32.2 | |||||
101.INS | Inline XBRL Instance Document. | ||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document. | ||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | ||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | ||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | ||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | ||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
1st FRANKLIN FINANCIAL CORPORATION | |||||
Registrant | |||||
/s/ Virginia C. Herring | |||||
President and Chief Executive Officer | |||||
(Principal Executive Officer) | |||||
/s/ Brian J. Gyomory | |||||
Executive Vice President and Chief Financial Officer | |||||
(Principal Financial and Accounting Officer) | |||||
Date: November 14, 2022 |
September 30, 2022 | December 31, 2021 | ||||||||||
ASSETS | |||||||||||
CASH AND CASH EQUIVALENTS | $ | $ | |||||||||
RESTRICTED CASH | |||||||||||
LOANS: | |||||||||||
Direct Cash Loans | |||||||||||
Real Estate Loans | |||||||||||
Sales Finance Contracts | |||||||||||
Less: Unearned Finance Charges | |||||||||||
Unearned Insurance Premiums and Commissions | |||||||||||
Allowance for Credit Losses | |||||||||||
Net Loans | |||||||||||
INVESTMENT SECURITIES: | |||||||||||
Available for Sale, at fair value | |||||||||||
OTHER ASSETS: | |||||||||||
Operating Lease Right-of-Use Assets | |||||||||||
Other Assets | |||||||||||
TOTAL ASSETS | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
SENIOR DEBT | $ | $ | |||||||||
OPERATING LEASE LIABILITIES | |||||||||||
ACCRUED EXPENSES AND OTHER LIABILITIES | |||||||||||
SUBORDINATED DEBT | |||||||||||
Total Liabilities | |||||||||||
STOCKHOLDERS' EQUITY: | |||||||||||
Preferred Stock: $ | |||||||||||
Common Stock | |||||||||||
Voting Shares; $ | |||||||||||
Non-Voting Shares; no par value; | |||||||||||
Accumulated Other Comprehensive (Loss) Income | ( | ||||||||||
Retained Earnings | |||||||||||
Total Stockholders' Equity | |||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
INTEREST INCOME | $ | $ | $ | $ | |||||||||||||||||||
INTEREST EXPENSE | |||||||||||||||||||||||
NET INTEREST INCOME | |||||||||||||||||||||||
Provision for Loan Losses | |||||||||||||||||||||||
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | |||||||||||||||||||||||
INSURANCE INCOME | |||||||||||||||||||||||
Premiums and Commissions | |||||||||||||||||||||||
Insurance Claims and Expenses | |||||||||||||||||||||||
Total Net Insurance Income | |||||||||||||||||||||||
OTHER REVENUE | |||||||||||||||||||||||
OTHER OPERATING EXPENSES | |||||||||||||||||||||||
Personnel Expense | |||||||||||||||||||||||
Occupancy Expense | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Total | |||||||||||||||||||||||
INCOME BEFORE INCOME TAXES | |||||||||||||||||||||||
Provision for Income Taxes | |||||||||||||||||||||||
NET INCOME | $ | $ | $ | $ | |||||||||||||||||||
BASIC AND DILUTED EARNINGS PER SHARE | |||||||||||||||||||||||
$ | $ | $ | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Net Income | $ | $ | $ | $ | |||||||||||||||||||
Other Comprehensive Loss: | |||||||||||||||||||||||
Net changes related to available-for-sale securities | |||||||||||||||||||||||
Unrealized losses | ( | ( | ( | ( | |||||||||||||||||||
Income tax benefit | |||||||||||||||||||||||
Net unrealized losses | ( | ( | ( | ( | |||||||||||||||||||
Less reclassification of gain to net income | |||||||||||||||||||||||
Total Other Comprehensive Loss | ( | ( | ( | ( | |||||||||||||||||||
Total Comprehensive Income (Loss) | $ | ( | $ | $ | ( | $ |
Common Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total | ||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||
Three Months Ended September 30, 2022: | |||||||||||||||||||||||||||||
Balance at June 30, 2022 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
Comprehensive Income: | |||||||||||||||||||||||||||||
Net Income | — | — | — | ||||||||||||||||||||||||||
Other Comprehensive Loss | — | — | — | ( | |||||||||||||||||||||||||
Total Comprehensive Loss | — | — | — | — | ( | ||||||||||||||||||||||||
Cash Distributions Paid | — | — | ( | — | ( | ||||||||||||||||||||||||
Balance at September 30, 2022 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
Three Months Ended September 30, 2021: | |||||||||||||||||||||||||||||
Balance at June 30, 2021 | $ | $ | $ | $ | |||||||||||||||||||||||||
Comprehensive Income: | |||||||||||||||||||||||||||||
Net Income | — | — | — | ||||||||||||||||||||||||||
Other Comprehensive Loss | — | — | — | ( | |||||||||||||||||||||||||
Total Comprehensive Income | — | — | — | — | |||||||||||||||||||||||||
Cash Distributions Paid | — | — | ( | — | ( | ||||||||||||||||||||||||
Balance at September 30, 2021 | $ | $ | $ | $ | |||||||||||||||||||||||||
Nine Months Ended September 30, 2022: | |||||||||||||||||||||||||||||
Balance at December 31, 2021 | $ | $ | $ | $ | |||||||||||||||||||||||||
Comprehensive Income: | |||||||||||||||||||||||||||||
Net Income | — | — | — | ||||||||||||||||||||||||||
Other Comprehensive Loss | — | — | — | ( | |||||||||||||||||||||||||
Total Comprehensive Loss | — | — | — | — | ( | ||||||||||||||||||||||||
Cash Distributions Paid | — | — | ( | — | ( | ||||||||||||||||||||||||
Balance at September 30, 2022 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
Nine Months Ended September 30, 2021: | |||||||||||||||||||||||||||||
Balance at December 31, 2020 | $ | $ | $ | $ | |||||||||||||||||||||||||
Comprehensive Income: | |||||||||||||||||||||||||||||
Net Income | — | — | — | ||||||||||||||||||||||||||
Other Comprehensive Loss | — | — | — | ( | |||||||||||||||||||||||||
Total Comprehensive Income | — | — | — | — | |||||||||||||||||||||||||
Cash Distributions Paid | — | — | ( | — | ( | ||||||||||||||||||||||||
Balance at September 30, 2021 | $ | $ | $ | $ |
Nine Months Ended September 30, | |||||||||||
2022 | 2021 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
Net Income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Provision for loan losses | |||||||||||
Depreciation and amortization | |||||||||||
Provision for deferred income taxes | |||||||||||
Other | ( | ( | |||||||||
Change in miscellaneous other assets | |||||||||||
Change in other liabilities | ( | ||||||||||
Net Cash Provided | |||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
Loans originated or purchased | ( | ( | |||||||||
Loan liquidations | |||||||||||
Purchases of marketable debt securities | ( | ( | |||||||||
Redemptions of marketable debt securities | |||||||||||
Fixed asset additions | ( | ( | |||||||||
Fixed asset net proceeds from sales | |||||||||||
Net Cash Used | ( | ( | |||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
Net increase in senior demand notes | |||||||||||
Advances on credit line | |||||||||||
Payments on credit line | ( | ( | |||||||||
Commercial paper issued | |||||||||||
Commercial paper redeemed | ( | ( | |||||||||
Subordinated debt securities issued | |||||||||||
Subordinated debt securities redeemed | ( | ( | |||||||||
Dividends / distributions | ( | ( | |||||||||
Net Cash Provided | |||||||||||
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | ( | ||||||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning | |||||||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, ending | $ | $ | |||||||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | |||||||||||
Interest Paid | $ | $ | |||||||||
Income Taxes Paid | |||||||||||
NON-CASH INVESTING AND FINANCING ACTIVITY: | |||||||||||
Other Consumer (Live Check and Premier) Renewed Loan Payoffs | |||||||||||
Other non-cash activity: unearned finance charges, origination fees, discounts, premiums, deferred fees and deferred costs |
September 30, 2022 | September 30, 2021 | ||||||||||
Cash and Cash Equivalents | $ | $ | |||||||||
Restricted Cash | |||||||||||
Total Cash, Cash Equivalents and Restricted Cash | $ | $ |
Loan Class | September 30, 2022 | December 31, 2021 | ||||||||||||
Live Check Consumer Loans | $ | $ | ||||||||||||
Premier Consumer Loans | ||||||||||||||
Other Consumer Loans | ||||||||||||||
Real Estate Loans | ||||||||||||||
Sales Finance Contracts | ||||||||||||||
Total | $ | $ |
September 30, 2022 | 30-59 Days Past Due | 60-89 Days Past Due | 90 Days or More Past Due | Total Past Due Loans | ||||||||||||||||||||||
Live Check Loans | $ | $ | $ | $ | ||||||||||||||||||||||
Premier Loans | ||||||||||||||||||||||||||
Other Consumer Loans | ||||||||||||||||||||||||||
Real Estate Loans | ||||||||||||||||||||||||||
Sales Finance Contracts | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
December 31, 2021 | 30-59 Days Past Due | 60-89 Days Past Due | 90 Days or More Past Due | Total Past Due Loans | ||||||||||||||||||||||
Live Check Loans | $ | $ | $ | $ | ||||||||||||||||||||||
Premier Loans | ||||||||||||||||||||||||||
Other Consumer Loans | ||||||||||||||||||||||||||
Real Estate Loans | ||||||||||||||||||||||||||
Sales Finance Contracts | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
Payment Performance by Origination Year | |||||||||||||||||||||||||||||||||||||||||
2022(1) | 2021 | 2020 | 2019 | 2018 | Prior | Total Principal Balance | |||||||||||||||||||||||||||||||||||
(in 000’s) | (in 000’s) | (in 000’s) | (in 000’s) | (in 000’s) | (in 000’s) | (in 000’s) | |||||||||||||||||||||||||||||||||||
Live Checks: | |||||||||||||||||||||||||||||||||||||||||
Performing | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Nonperforming | |||||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||
Premier Loans: | |||||||||||||||||||||||||||||||||||||||||
Performing | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Nonperforming | |||||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||
Other Consumer Loans: | |||||||||||||||||||||||||||||||||||||||||
Performing | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Nonperforming | |||||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||
Real Estate Loans: | |||||||||||||||||||||||||||||||||||||||||
Performing | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Nonperforming | |||||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||
Sales Finance Contracts: | |||||||||||||||||||||||||||||||||||||||||
Performing | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Nonperforming | |||||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | $ |
Three Months Ended September 30, 2022 | ||||||||||||||||||||||||||||||||||||||
Live Checks | Premier Loans | Other Consumer Loans | Real Estate Loans | Sales Finance Contracts | Total | |||||||||||||||||||||||||||||||||
Allowance for Credit Losses: | ||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2022 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Provision for Credit Losses | ( | |||||||||||||||||||||||||||||||||||||
Charge-offs | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||
Recoveries | ||||||||||||||||||||||||||||||||||||||
Ending Balance | $ | $ | $ | $ | $ | $ |
Nine Months Ended September 30, 2022 | ||||||||||||||||||||||||||||||||||||||
Live Checks | Premier Loans | Other Consumer Loans | Real Estate Loans | Sales Finance Contracts | Total | |||||||||||||||||||||||||||||||||
Allowance for Credit Losses: | ||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2022 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Provision for Credit Losses | ( | |||||||||||||||||||||||||||||||||||||
Charge-offs | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||
Recoveries | ||||||||||||||||||||||||||||||||||||||
Ending Balance | $ | $ | $ | $ | $ | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, 2022 | September 30, 2021 | September 30, 2022 | September 30, 2021 | ||||||||||||||||||||
Allowance for Credit Losses: | |||||||||||||||||||||||
Beginning Balance | $ | $ | $ | $ | |||||||||||||||||||
Provision for credit losses | |||||||||||||||||||||||
Charge-offs | ( | ( | ( | ( | |||||||||||||||||||
Recoveries | |||||||||||||||||||||||
Ending balance; collectively evaluated for impairment | $ | $ | $ | $ |
Number Of Loans | Pre-Modification Recorded Investment | Post-Modification Recorded Investment | |||||||||||||||
Live Check Consumer Loans | $ | $ | |||||||||||||||
Premier Consumer Loans | |||||||||||||||||
Other Consumer Loans | |||||||||||||||||
Real Estate Loans | |||||||||||||||||
Sales Finance Contracts | |||||||||||||||||
Total | $ | $ |
Number Of Loans | Pre-Modification Recorded Investment | Post-Modification Recorded Investment | |||||||||||||||
Live Check Consumer Loans | $ | $ | |||||||||||||||
Premier Consumer Loans | |||||||||||||||||
Other Consumer Loans | |||||||||||||||||
Real Estate Loans | |||||||||||||||||
Sales Finance Contracts | |||||||||||||||||
Total | $ | $ |
Number Of Loans | Pre-Modification Recorded Investment | Post-Modification Recorded Investment | |||||||||||||||
Live Check Consumer Loans | $ | $ | |||||||||||||||
Premier Consumer Loans | |||||||||||||||||
Other Consumer Loans | |||||||||||||||||
Real Estate Loans | |||||||||||||||||
Sales Finance Contracts | |||||||||||||||||
Total | $ | $ |
Number Of Loans | Pre-Modification Recorded Investment | Post-Modification Recorded Investment | |||||||||||||||
Live Check Consumer Loans | $ | $ | |||||||||||||||
Premier Consumer Loans | |||||||||||||||||
Other Consumer Loans | |||||||||||||||||
Real Estate Loans | |||||||||||||||||
Sales Finance Contracts | |||||||||||||||||
Total | $ | $ |
Number Of Loans | Pre-Modification Recorded Investment | ||||||||||
Live Check Consumer Loans | $ | ||||||||||
Premier Consumer Loans | |||||||||||
Other Consumer Loans | |||||||||||
Real Estate Loans | |||||||||||
Sales Finance Contracts | |||||||||||
Total | $ |
Number Of Loans | Pre-Modification Recorded Investment | ||||||||||
Live Check Consumer Loans | $ | ||||||||||
Premier Consumer Loans | |||||||||||
Other Consumer Loans | |||||||||||
Real Estate Loans | |||||||||||
Sales Finance Contracts | |||||||||||
Total | $ |
Number Of Loans | Pre-Modification Recorded Investment | ||||||||||
Live Check Consumer Loans | $ | ||||||||||
Premier Consumer Loans | |||||||||||
Other Consumer Loans | |||||||||||
Real Estate Loans | |||||||||||
Sales Finance Contracts | |||||||||||
Total | $ |
Number Of Loans | Pre-Modification Recorded Investment | ||||||||||
Live Check Consumer Loans | $ | ||||||||||
Premier Consumer Loans | |||||||||||
Other Consumer Loans | |||||||||||
Real Estate Loans | |||||||||||
Sales Finance Contracts | |||||||||||
Total | $ |
As of September 30, 2022 | As of December 31, 2021 | ||||||||||||||||||||||
Amortized Cost | Estimated Fair Value | Amortized Cost | Estimated Fair Value | ||||||||||||||||||||
Available-for-Sale | |||||||||||||||||||||||
Obligations of states and political subdivisions | $ | $ | $ | $ | |||||||||||||||||||
Corporate securities | |||||||||||||||||||||||
$ | $ | $ | $ |
Less than 12 Months | 12 Months or Longer | Total | ||||||||||||||||||||||||||||||||||||
September 30, 2022 | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||||||||||||||||
Available for Sale: | ||||||||||||||||||||||||||||||||||||||
Obligations of states and political subdivisions | $ | $ | ( | $ | $ | ( | $ | $ | ( |
Less than 12 Months | 12 Months or Longer | Total | ||||||||||||||||||||||||||||||||||||
December 31, 2021 | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||||||||||||||||
Available for Sale: | ||||||||||||||||||||||||||||||||||||||
Obligations of states and political subdivisions | $ | $ | ( | $ | $ | ( | $ | $ | ( |
Fair Value Measurements at Reporting Date Using | ||||||||||||||||||||||||||
Description | September 30, 2022 | Quoted Prices In Active Markets for Identical Assets (Level1) | Significant Other Observable Inputs (Level2) | Significant Unobservable Inputs (Level3) | ||||||||||||||||||||||
Corporate securities | $ | $ | $ | $ | ||||||||||||||||||||||
Obligations of states and political subdivisions | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
Fair Value Measurements at Reporting Date Using | ||||||||||||||||||||||||||
Description | December 31, 2021 | Quoted Prices In Active Markets for Identical Assets (Level1) | Significant Other Observable Inputs (Level2) | Significant Unobservable Inputs (Level3) | ||||||||||||||||||||||
Corporate securities | $ | $ | $ | $ | ||||||||||||||||||||||
Obligations of states and political subdivisions | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
Three Months Ended September 30, 2022 | Nine Months Ended September 30, 2022 | ||||||||||
Operating lease expense | $ | $ | |||||||||
Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||
Operating cash flows from operating leases | |||||||||||
Weighted-average remaining lease term – operating leases (in years) | |||||||||||
Weighted-average discount rate – operating leases | % | ||||||||||
Lease maturity schedule as of September 30, 2022: | Amount | ||||||||||
Remainder of 2022 | $ | ||||||||||
2023 | |||||||||||
2024 | |||||||||||
2025 | |||||||||||
2026 | |||||||||||
2027 and beyond | |||||||||||
Total | |||||||||||
Less: Discount | ( | ||||||||||
Present Value of Lease Liability | $ |
Three Months Ended September 30, 2021 | Nine Months Ended September 30, 2021 | ||||||||||
Operating lease expense | $ | $ | |||||||||
Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||
Operating cash flows from operating leases | |||||||||||
Weighted-average remaining lease term – operating leases (in years) | |||||||||||
Weighted-average discount rate – operating leases | % | ||||||||||
Lease maturity schedule as of September 30, 2021: | Amount | ||||||||||
Remainder of 2021 | $ | ||||||||||
2022 | |||||||||||
2023 | |||||||||||
2024 | |||||||||||
2025 | |||||||||||
2026 and beyond | |||||||||||
Total | |||||||||||
Less: Discount | ( | ||||||||||
Present Value of Lease Liability | $ |
Division I | Division II | Division III | Division IV | Division V | Division VII | Division VIII | Division IX | Total | |||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Division Revenues: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
3 Months Ended 09/30/2022 | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
3 Months Ended 09/30/2021 | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
9 Months Ended 09/30/2022 | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
9 Months Ended 09/30/2021 | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Division Profit: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
3 Months Ended 09/30/2022 | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
3 Months Ended 09/30/2021 | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
9 Months Ended 09/30/2022 | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
9 Months Ended 09/30/2021 | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Division Assets: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
09/30/2022 | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
12/31/2021 | $ | $ | $ | $ | $ | $ | $ | $ | $ |
3 Months Ended 09/30/2022 | 3 Months Ended 09/30/2021 | 9 Months Ended 09/30/2022 | 9 Months Ended 09/30/2021 | ||||||||||||||||||||
(in 000’s) | (in 000’s) | (in 000’s) | (in 000’s) | ||||||||||||||||||||
Reconciliation of Revenues: | |||||||||||||||||||||||
Total revenues from reportable divisions | $ | $ | $ | $ | |||||||||||||||||||
Corporate finance charges earned, not allocated to divisions | |||||||||||||||||||||||
Corporate investment income earned, not allocated to divisions | |||||||||||||||||||||||
Timing difference of insurance income allocation to divisions | |||||||||||||||||||||||
Other revenue not allocated to divisions | |||||||||||||||||||||||
Consolidated Revenues (1) | $ | $ | $ | $ | |||||||||||||||||||
3 Months Ended 09/30/2022 | 3 Months Ended 09/30/2021 | 9 Months Ended 09/30/2022 | 9 Months Ended 09/30/2021 | ||||||||||||||||||||
(in 000’s) | (in 000’s) | (in 000’s) | (in 000’s) | ||||||||||||||||||||
Reconciliation of Profit: | |||||||||||||||||||||||
Profit per division | $ | $ | $ | $ | |||||||||||||||||||
Corporate earnings not allocated | |||||||||||||||||||||||
Corporate expenses not allocated | ( | ( | ( | ( | |||||||||||||||||||
Consolidated Income Before Income Taxes | $ | $ | $ | $ |
BRANCH OPERATIONS | |||||||||||
J. Patrick Smith, III | Senior Vice President | ||||||||||
Joseph R. Cherry | Vice President | ||||||||||
M. Summer Clevenger | Vice President | ||||||||||
John B. Gray | Vice President | ||||||||||
Jerry W. Hughes | Vice President | ||||||||||
Marty Miskelly | Vice President | ||||||||||
Virginia K. Palmer | Vice President | ||||||||||
Jennifer C. Purser | Vice President | ||||||||||
Michael Shankles | Vice President | ||||||||||
Michael J. Whitaker | Vice President |
REGIONAL OPERATIONS DIRECTORS | ||||||||||||||
Sonya Acosta | Carla Eldridge | Tammy Hood | Sylvia McClung | Anthony Seney | ||||||||||
Maurice Bize | Jimmy Fairbanks | Sue Iser | Nokie Moore | Greg Shealy | ||||||||||
Derrick Blalock | Chad Frederick | Jonathan Kendrick | Lauren Munoz | Tonya Slaten | ||||||||||
Nicholas Blevins | Peyton Givens | Steve Knotts | William Murrillo | Cliff Snyder | ||||||||||
Janet Brownlee | Kim Golka | Katie Landry | Josh Nickerson | Michael Spriggs | ||||||||||
Ron Byerly | Kevin Gray | Becki Lawhon | Mike Olive | Lou Stokes | ||||||||||
Bryan Cook | Tabatha Green | Jeff Lee | Deloris O’Neal | Melissa Storck | ||||||||||
Stacy Courson | Jenna Henderson | Tammy Lee | Wanda Parham | Harriet Welch | ||||||||||
Chris Deakle | Brian Hill | Jeff Lindberg | April Pelphrey | Robert Whitlock | ||||||||||
Dee Dee Dunham | Rebecca Holloway | Jimmy Mahaffey | Gerald Rhoden |
BRANCH OPERATIONS | ||||||||||||||||||||||||||
ALABAMA | ||||||||||||||||||||||||||
Adamsville | Brewton | Florence | Mobile | Pelham | Sylacauga | |||||||||||||||||||||
Albertville | Clanton | Fort Payne | Moody | Prattville | Talladega | |||||||||||||||||||||
Alexander City | Cullman | Gadsden | Moulton | Robertsdale | Tallassee | |||||||||||||||||||||
Andalusia | Decatur | Hamilton | Muscle Shoals | Russellville (2) | Troy | |||||||||||||||||||||
Arab | Dothan (2) | Huntsville (2) | Opelika | Saraland | Trussville | |||||||||||||||||||||
Athens | Enterprise | Jackson | Oxford | Scottsboro | Tuscaloosa | |||||||||||||||||||||
Bay Minette | Fayette | Jasper | Ozark | Selma | Wetumpka | |||||||||||||||||||||
Bessemer | ||||||||||||||||||||||||||
GEORGIA | ||||||||||||||||||||||||||
Acworth | Canton | Dalton | Greensboro | Manchester | Swainsboro | |||||||||||||||||||||
Adel | Carrollton | Dawson | Griffin | McDonough | Sylvania | |||||||||||||||||||||
Albany (2) | Cartersville | Douglas (2) | Hartwell | Milledgeville | Sylvester | |||||||||||||||||||||
Alma | Cedartown | Douglasville | Hawkinsville | Monroe | Thomaston | |||||||||||||||||||||
Americus | Chatsworth | Dublin | Hazlehurst | Montezuma | Thomasville | |||||||||||||||||||||
Athens (2) | Clarkesville | East Ellijay | Helena | Monticello | Thomson | |||||||||||||||||||||
Augusta | Claxton | Eastman | Hinesville (2) | Moultrie | Tifton | |||||||||||||||||||||
Bainbridge | Clayton | Eatonton | Hiram | Nashville | Toccoa | |||||||||||||||||||||
Barnesville | Cleveland | Elberton | Hogansville | Newnan | Tucker | |||||||||||||||||||||
Baxley | Cochran | Fayetteville | Jackson | Perry | Valdosta | |||||||||||||||||||||
Blairsville | Colquitt | Fitzgerald | Jasper | Pooler | Vidalia | |||||||||||||||||||||
Blakely | Columbus (2) | Flowery Branch | Jefferson | Richmond Hill | Villa Rica | |||||||||||||||||||||
Blue Ridge | Commerce | Forest Park | Jesup | Rome | Warner Robins (2) | |||||||||||||||||||||
Bremen | Conyers | Forsyth | Kennesaw | Royston | Washington | |||||||||||||||||||||
Brunswick | Cordele | Fort Valley | LaGrange | Sandersville | Waycross | |||||||||||||||||||||
Buford | Cornelia | Ft. Oglethorpe | Lavonia | Sandy Springs | Waynesboro | |||||||||||||||||||||
Butler | Covington | Gainesville | Lawrenceville | Savannah | Winder | |||||||||||||||||||||
Cairo | Cumming | Garden City | Macon (2) | Statesboro | ||||||||||||||||||||||
Calhoun | Dahlonega | Georgetown | Madison | Stockbridge | ||||||||||||||||||||||
KENTUCKY | ||||||||||||||||||||||||||
Elizabethtown | Louisville | Paducah | Shelbyville | Shepherdsville |
BRANCH OPERATIONS | |||||||||||||||||
(Continued) | |||||||||||||||||
LOUISIANA | |||||||||||||||||
Abbeville | Covington | Hammond | LaPlace | Morgan City | Ruston | ||||||||||||
Alexandria | Crowley | Houma | Leesville | Natchitoches | Slidell | ||||||||||||
Baker | Denham Springs | Jena | Marksville | New Iberia | Sulphur | ||||||||||||
Bastrop | DeRidder | Kenner | Marrero | Opelousas | Thibodaux | ||||||||||||
Baton Rouge | Eunice | Lafayette | Minden | Pineville | West Monroe | ||||||||||||
Bossier City | Franklin | Lake Charles | Monroe | Prairieville | Winnsboro | ||||||||||||
MISSISSIPPI | |||||||||||||||||
Amory | Columbia | Gulfport | Laurel | Olive Branch | Ridgeland | ||||||||||||
Batesville | Columbus | Hattiesburg | Louisville | Oxford | Ripley | ||||||||||||
Bay St. Louis | Corinth | Hazlehurst | Magee | Pearl | Senatobia | ||||||||||||
Booneville | D’Iberville | Hernando | McComb | Philadelphia | Starkville | ||||||||||||
Brookhaven | Forest | Houston | Meridian | Picayune | Tupelo | ||||||||||||
Carthage | Greenwood | Iuka | New Albany | Pontotoc | Winona | ||||||||||||
Clinton | Grenada | Kosciusko | Newton | ||||||||||||||
SOUTH CAROLINA | |||||||||||||||||
Aiken | Cheraw | Gaffney | Lancaster | Newberry | Spartanburg | ||||||||||||
Anderson | Chester | Georgetown | Laurens | North Charleston | Summerville | ||||||||||||
Batesburg- Leesvile | Columbia | Greenwood | Lexington | North Greenville | Sumter | ||||||||||||
Beaufort | Conway | Greer | Manning | Orangeburg | Union | ||||||||||||
Boling Springs | Dillon | Hartsville | Marion | Rock Hill | Walterboro | ||||||||||||
Camden | Easley | Irmo | Moncks Corner | Seneca | Winnsboro | ||||||||||||
Cayce | Florence | Lake City | Myrtle Beach | Simpsonville | York | ||||||||||||
Charleston | |||||||||||||||||
TENNESSEE | |||||||||||||||||
Athens | Dayton | Greeneville | LaFollette | Millington | Savannah | ||||||||||||
Bristol | Dickson | Hixson | Lebanon | Morristown | Sevierville | ||||||||||||
Clarksville | Dyersburg | Jackson | Lenoir City | Murfreesboro | Smyrna | ||||||||||||
Cleveland | Elizabethton | Johnson City | Lexington | Newport | Tazewell | ||||||||||||
Columbia | Fayetteville | Kingsport | Madisonville | Powell | Tullahoma | ||||||||||||
Cookeville | Fayetteville | Lafayette | Maryville | Pulaski | Winchester | ||||||||||||
Crossville | Gallatin | ||||||||||||||||
TEXAS | |||||||||||||||||
Austin (2) | Conroe | New Braunfels | Pearland | Temple | Texarkana | ||||||||||||
Bastrop | Longview | Pasadena |
DIRECTORS | |||||
Ben F. Cheek, IV Chairman 1st Franklin Financial Corporation Ben F. Cheek, III Chairman Emeritus 1st Franklin Financial Corporation Virginia C. Herring Vice Chairman, President and Chief Executive Officer 1st Franklin Financial Corporation | Jerry J. Harrison, Jr. Project Engineer 1st Franklin Financial Corporation John G. Sample, Jr. CPA C. Dean Scarborough Retired Retail Business Owner | ||||
A. Roger Guimond Retired Executive Officer, 1st Franklin Financial Corporation Jim H. Harris, III Retired Founder / Co-owner Unichem Technologies Retired Founder / Owner / President Moonrise Distillery | Keith D. Watson Chairman Bowen & Watson, Inc. |
EXECUTIVE OFFICERS | ||
Ben F. Cheek, IV Chairman | ||
Ben F. Cheek, III Chairman Emeritus | ||
Virginia C. Herring Vice Chairman, President and Chief Executive Officer | ||
Brian J. Gyomory Executive Vice President and Chief Financial Officer | ||
Daniel E. Clevenger, II Executive Vice President - Compliance | ||
Gary L. McQuain Executive Vice President – Chief Operating Officer | ||
Mark J. Scarpitti Executive Vice President – General Counsel Acting Corporate Secretary | ||
Joseph A. Shaw Executive Vice President – Chief Information Officer | ||
Jeffrey R. Thompson Executive Vice President – Human Resources | ||
Chip Vercelli Executive Vice President – Government Affairs | ||
LEGAL COUNSEL | ||
Jones Day 1221 Peachtree Street, N.E. Suite 400 Atlanta, Georgia 30361 | ||
INDEPENDENT AUDITORS | ||
Deloitte & Touche LLP 191 Peachtree Street, N.E. Atlanta, Georgia 30303 |
Date: November 14, 2022 | |||||
/s/ Virginia C. Herring | |||||
Virginia C. Herring, President and Chief Executive Officer |
Date: November 14, 2022 | |||||
/s/ Brian J. Gyomory | |||||
Brian J. Gyomory, Executive Vice President and Chief Financial Officer |
/s/ Virginia C. Herring | |||||
Name: Virginia C. Herring | |||||
Title: President and Chief Executive Officer |
/s/ Brian J. Gyomory | |||||
Name: Brian J. Gyomory | |||||
Title: Executive Vice President and Chief Financial Officer |
Condensed Consolidated Statements of Financial Position (Unaudited) - Parenthetical - $ / shares |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Preferred stock, par value (in dollars per share) | $ 100 | $ 100 |
Preferred stock, shares authorized (in shares) | 6,000 | 6,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Voting Common Stock | ||
Common stock, par value (in dollars per share) | $ 100 | $ 100 |
Common stock, shares authorized (in shares) | 2,000 | 2,000 |
Common stock, shares outstanding (in shares) | 1,700 | 1,700 |
Nonvoting Common Stock | ||
Common stock, shares authorized (in shares) | 198,000 | 198,000 |
Common stock, shares outstanding (in shares) | 168,300 | 168,300 |
Condensed Consolidated Statements of Income and Retained Earnings (Unaudited) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Income Statement [Abstract] | ||||
INTEREST INCOME | $ 70,724,286 | $ 61,655,769 | $ 204,867,038 | $ 179,429,799 |
INTEREST EXPENSE | 7,123,645 | 5,944,752 | 19,988,429 | 17,031,188 |
NET INTEREST INCOME | 63,600,641 | 55,711,017 | 184,878,609 | 162,398,611 |
Provision for Loan Losses | 24,967,844 | 9,720,108 | 57,024,372 | 23,853,439 |
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | 38,632,797 | 45,990,909 | 127,854,237 | 138,545,172 |
INSURANCE INCOME | ||||
Premiums and Commissions | 14,772,163 | 13,700,612 | 42,851,191 | 39,236,865 |
Insurance Claims and Expenses | 4,513,929 | 4,070,160 | 13,731,066 | 12,189,831 |
Total Net Insurance Income | 10,258,234 | 9,630,452 | 29,120,125 | 27,047,034 |
OTHER REVENUE | 1,835,940 | 1,693,871 | 5,381,846 | 4,457,156 |
OTHER OPERATING EXPENSES | ||||
Personnel Expense | 28,417,796 | 28,876,677 | 86,643,628 | 86,266,090 |
Occupancy Expense | 4,571,707 | 4,382,379 | 13,284,849 | 13,086,943 |
Other | 14,596,721 | 12,770,720 | 42,265,283 | 35,670,630 |
Total | 47,586,224 | 46,029,776 | 142,193,760 | 135,023,663 |
INCOME BEFORE INCOME TAXES | 3,140,747 | 11,285,456 | 20,162,448 | 35,025,699 |
Provision for Income Taxes | 1,359,786 | 1,060,890 | 3,201,942 | 2,901,579 |
NET INCOME | $ 1,780,961 | $ 10,224,566 | $ 16,960,506 | $ 32,124,120 |
BASIC AND DILUTED EARNINGS PER SHARE | ||||
Earnings per share, basic (in dollars per share) | $ 10.48 | $ 60.14 | $ 99.77 | $ 188.97 |
Earnings per share, diluted (in dollars per share) | $ 10.48 | $ 60.14 | $ 99.77 | $ 188.97 |
Condensed Consolidated Statements of Income and Retained Earnings (Unaudited) - Parenthetical - shares |
Sep. 30, 2022 |
Jun. 30, 2022 |
Dec. 31, 2021 |
Sep. 30, 2021 |
Jun. 30, 2021 |
Dec. 31, 2020 |
---|---|---|---|---|---|---|
Voting Common Stock | ||||||
Common stock, shares outstanding (in shares) | 1,700 | 1,700 | ||||
Nonvoting Common Stock | ||||||
Common stock, shares outstanding (in shares) | 168,300 | 168,300 | ||||
Common Stock | ||||||
Shares outstanding (in shares) | 170,000 | 170,000 | 170,000 | 170,000 | 170,000 | 170,000 |
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Text Block [Abstract] | ||||
Net Income | $ 1,780,961 | $ 10,224,566 | $ 16,960,506 | $ 32,124,120 |
Net changes related to available-for-sale securities | ||||
Unrealized losses | (18,369,401) | (4,212,937) | (58,740,515) | (5,890,515) |
Income tax benefit | 3,849,925 | 882,597 | 12,319,839 | 1,243,553 |
Net unrealized losses | (14,519,476) | (3,330,340) | (46,420,676) | (4,646,962) |
Less reclassification of gain to net income | 116,198 | 67,506 | 320,656 | 435,413 |
Total Other Comprehensive Loss | (14,635,674) | (3,397,846) | (46,741,332) | (5,082,375) |
Total Comprehensive Income (Loss) | $ (12,854,713) | $ 6,826,720 | $ (29,780,826) | $ 27,041,745 |
Basis of Presentation |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements of 1st Franklin Financial Corporation and subsidiaries (the "Company") should be read in conjunction with the audited consolidated financial statements of the Company and notes thereto as of December 31, 2021 and for the year then ended included in the Company's 2021 Annual Report filed with the Securities and Exchange Commission. Inter-company accounts and transactions have been eliminated from the condensed consolidated financial statements. In the opinion of Management of the Company, the accompanying unaudited condensed consolidated financial statements contain all normal recurring adjustments necessary to present fairly the Company's consolidated financial position as of September 30, 2022 and December 31, 2021, its consolidated results of operations and comprehensive income for the three- and nine-month periods ended September 30, 2022 and 2021 and its consolidated cash flows for the nine months ended September 30, 2022 and 2021. While certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission, the Company believes that the disclosures herein are adequate to make the information presented not misleading. The Company’s financial condition and results of operations as of and for the three- and nine-month periods ended September 30, 2022 are not necessarily indicative of the results to be expected for the full fiscal year or any other future period. The preparation of financial statements in accordance with GAAP requires Management to make estimates and assumptions that affect the reported amount of assets and liabilities at and as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. The computation of earnings per share is self-evident from the accompanying Condensed Consolidated Statements of Income and Retained Earnings (Unaudited). The Company has no dilutive securities outstanding. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported shown in the condensed consolidated statements of cash flows:
The Company categorizes its primary sources of revenue into three categories: (1) interest related revenues, (2) insurance related revenue and (3) other revenue from contracts with customers. •Interest related revenues are specifically excluded from the scope of ASC Topic 606 and accounted for under ASC Topic 310, “Receivables”. •Insurance related revenues are subject to industry-specific guidance within the scope of ASC Topic 944, “Financial Services – Insurance”. •Other revenues primarily relate to commissions earned by the Company on sales of auto club memberships. Auto club commissions are revenue from contracts with customers and are accounted for in accordance with the guidance set forth in ASC Topic 606. During the three months ended September 30, 2022, and 2021, the Company recognized interest related revenue of $70.7 million and $61.7 million, respectively, insurance related revenue of $14.8 million and $13.7 million, respectively, and other revenue from contracts with customers of $1.8 million and $1.7 million, respectively. During the nine months ended September 30, 2022, and 2021, the Company recognized interest related revenue of $204.9 million and $179.4 million, respectively, insurance related income of $42.9 million and $39.2 million, respectively, and other revenue from contracts with customers of $5.4 million and $4.5 million, respectively. Recent Accounting Pronouncements: In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting”, which provides optional accounting relief for the expected market transition from the use of the London Interchange Bank Offered Rate (“LIBOR”) to the proposed Secured Overnight Financing Rate (“SOFR”). The key provisions of optional relief include (1) accounting for contract modifications as a continuation of the existing contract without additional analysis and (2) continuing hedge accounting when certain critical terms of a hedging relationship change. There was no impact of ASU No. 2020-04 on the Company’s condensed consolidated financial statements for the period ended September 30, 2022. The Company's benchmark rate on its line of credit will transition from the London Interchange Bank Offered Rate ("LIBOR") to the Secured Overnight Financing Rate ("SOFR") provided the SOFR rate does not fall below the floor interest rate. Management anticipates that adoption of the new standard will not have a material impact on the Company's financial statements. In March 2022 the FASB issued ASU No. 2022-02 "Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructuring and Vintage Disclosures. The key provisions include (1) enhancements to disclosure requirements for certain loan refinancings and restructurings by creditor when borrower is experiencing financial difficulty, the creditor must apply the loan refinancing and restructuring guidance to determine whether a modification results in a new loan or a continuation of an existing loan (2) for public business entities, the entity is required to disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases. The amendments in this update are effective for annual and interim periods beginning after December 15, 2022. The Company is currently evaluating the effect of disclosure updates to its footnotes, but believes implementation will not have a material financial effect on its financial statements.
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Loans |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans | Loans The Company’s consumer loans are made to individuals, who may be new customers, existing customers (loan renewals), former customers or customers converting from a sales contract, in relatively small amounts for relatively short periods of time. First and second mortgage loans on real estate are made in larger amounts and for longer periods of time. The Company also purchases sales finance contracts from various dealers. All loans and sales contracts are held for investment. Cash, unearned finance charges, origination fees, discounts, premiums, deferred fees, and, in the instance of a loan renewal, the net payoff of the of the renewed loan are included in the loan origination amount. The cash component of the loan origination is included in the Statement of Cash Flows in the Cash Flows from Investing Activities as Loans Originated or Purchased. Loan renewals are accounted for in accordance with the applicable guidance in ASC Topic 310-20 Nonrefundable Fees and Other Costs. Loan renewals are a product the Company offers to existing customers that allows them to borrow additional funds from the Company. In evaluating a loan for renewal, in addition to our standard underwriting requirements, we may take into consideration the customer’s prior payment performance with us, which we believe to be an indicator of the customer’s future credit performance. If the terms of the new loan resulting from a loan renewal (other than a troubled debt restructuring) are at least as favorable to us as the terms for comparable loans to other customers with similar collection risks who are not renewing a loan, the renewal is accounted for as a new loan. The criteria is met if the new loan's effective yield is at least equal to the effective yield for such comparable loans and the modification of the original loan is more than minor. A modification of a loan is more than minor if the present value of the cash flows under the terms of the renewal is at least 10 percent different from the present value of the remaining cash flows under the terms of the original loan. Accordingly, when a renewal is generated, the original loan(s) are extinguished along with the associated unearned finance charges and a new loan is originated. Substantially all renewals include a non-cash component that represents the exchange of the original principal balance for the new principal balance and a cash component for the net proceeds distributed to the customer for the additional amount borrowed. The cash component is presented as outflows from investing activities and the non-cash component is presented as a non-cash investing activity. Allowance for Credit Losses The allowance for credit losses is based on Management's evaluation of the inherent risks and changes in the composition of the Company's loan portfolio. Management estimates and evaluates the allowance for credit losses utilizing an open pool loss rate method on collectively evaluated loans with similar risk characteristics in segments, whereby a historical loss rate is calculated and applied to the balance of loans outstanding in the portfolio at each reporting date. This historical loss rate then may be adjusted by macroeconomic forecast and other qualitative factors, as appropriate, to fully reflect the Company’s expected losses in its loan portfolio. The Company’s allowance for credit losses recorded in the balance sheet reflects Management’s best estimate of expected credit losses. The Company calculates an expected credit loss by utilizing a snapshot of each specific loan segment at a point in history and tracing that segment’s performance until charge-offs were substantially exhausted for that particular segment. Charge-offs in subsequent periods are aggregated to derive an unadjusted lifetime historical charge-off rate by segment. The receivables balance at the balance sheet date is reviewed and adjustments to the allowance for credit losses are made if Management determines the receivables balance warrants an adjustment. The Company performs a correlation analysis between macroeconomic factors and prior charge-offs for the following macroeconomic factors: Annual Unemployment Rates, Real Gross Domestic Product, Consumer Price Index (CPI), and US National Home Price Index (HPI). To evaluate the overall adequacy of the Company’s allowance for credit losses, Management considers the level of loan receivables, historical loss trends, loan delinquency trends, bankruptcy trends and overall economic conditions. Such allowance is, in the opinion of Management, adequate for expected losses in the current loan portfolio. As the estimates used in determining the loan loss reserve are influenced by outside factors, such as consumer payment patterns and general economic conditions, there is uncertainty inherent in these estimates. Actual results could vary based on future changes in significant assumptions. Management disaggregates the Company’s loan portfolio by loan segment when evaluating loan performance and estimating the allowance for credit losses. Although most loans are similar in nature, the Company concluded that based on variations in loss experience (severity and duration) driven by product and customer type it is most relevant to segment the portfolio by loan product consisting of five different segments: live checks, premier loans, other consumer loans, real estate loans, and sales finance contracts. The total segments are monitored for credit losses based on graded contractual delinquency and other economic conditions. The Company classifies delinquent accounts at the end of each month according to the Company’s graded delinquency rules which includes the number of installments past due at that time, based on the then-existing terms of the contract. Accounts are classified in delinquency categories of 30-59 days past due, 60-89 days past due, or 90 or more days past due based on the Company’s graded delinquency policy. When a loan meets the Company’s charge-off policy, the loan is charged off, unless Management directs that it be retained as an active loan. In making this charge-off evaluation, Management considers factors such as pending insurance, bankruptcy status and other indicators of collectability. The amount charged off is the unpaid balance less the unearned finance charges and the unearned insurance premiums, if applicable. Management ceases accruing finance charges on loans that meet the Company’s non-accrual policy based on grade delinquency rules, generally when two payments remain unpaid on precomputed loans or when the interest paid-to-date on an interest-bearing loan is 60 days or more past due. Finance charges are then only recognized to the extent there is a loan payment received or when the account qualifies for return to accrual status. Accounts qualify for return to accrual status when the graded delinquency on a precomputed loan is less than two payments and on when the interest paid-to-date on an interest-bearing loan is less than 60 days past due. There were no loans that met the non-accrual policy still accruing interest at September 30, 2022 or December 31, 2021. The Company’s principal balances on non-accrual loans by loan class as of September 30, 2022 and December 31, 2021 are as follows:
An age analysis of principal balances on past due loans, segregated by loan class, as of September 30, 2022 and December 31, 2021 follows:
While delinquency rating analysis is the primary credit quality indicator, we also consider the ratio of bankrupt accounts to the total loan portfolio in evaluating whether any qualitative adjustments were necessary to the allowance for credit losses. The ratio of bankrupt accounts to the loan portfolio balance was 1.51% at September 30, 2022, compared to 1.27% at December 31, 2021. The Company considers the performance of the loan portfolio and its impact on the allowance for credit losses. For consumer and real estate segments, the Company also evaluates credit quality based on the aging status of the loan and by payment activity. The following table presents the principal balance on loans based on payment activity as of September 30, 2022:
(1)Includes loans originated during the nine-months ended September 30, 2022. As of September 30, 2022, a historical look back period of five quarters was utilized for live checks; six quarters for other consumer loans, premier loans, and sales finance contracts; and a look back period of five years was utilized for real estate loans. Expected look back periods are determined based on analyzing the history of each segment’s snapshot at a point in history and tracing performance until charge-offs are mostly exhausted. The Company addresses seasonality primarily through the use of an average in quarterly historical loss rates over a 4-quarter snapshot time span instead of using one specific snapshot quarter’s historical loss rates. Determining a proper allowance for credit losses is a critical accounting estimate which involves Management’s judgment with respect to certain relevant factors, such as historical and expected loss trends, unemployment rates in various locales, delinquency levels, bankruptcy trends and overall general and industry specific economic conditions. Concerns over interest rate levels, energy prices, domestic and global policy issues, trade policy in the U.S. and geopolitical events, as well as the implications those events on the markets in general, further add to the global uncertainty. There is also a risk that interest rate increases to mitigate inflation could lead to a recession. Interest rate levels and energy prices, in combination with global economic conditions, fiscal and monetary policy and the level of regulatory scrutiny of financial institutions will likely continue to impact our results for the remainder of 2022 and into 2023. Management determined that certain snapshot periods included in the estimation model benefited from government stimulus actions and the benefit to loss rates from those stimulus actions is expected to continue to decline over time. 1st Franklin’s expected credit loss model uses loss history from periods that may include the effect of government stimulus in estimating the allowance for expected credit losses. Based on the impact of periods that may include the benefit of government stimulus on loss rates, economic uncertainty, and emerging credit loss rates, management concluded that a qualitative adjustment was required to sufficiently provide for expected credit losses. Management calculated a qualitative adjustment totaling $14.5 million by incorporating emerging post pandemic pool loss rates in an estimation model. The allowance for credit losses increased by $5.9 million to $73.2 million at September 30, 2022 compared to $67.3 million at December 31, 2021. It is difficult to estimate how potential changes in any one economic factor might affect the overall allowance because a wide variety of factors and inputs are considered in the allowance estimate. Changes in the factors and inputs may not occur at the same rate and may not be consistent across all product types. Additionally, changes in factors and inputs may be directionally inconsistent, such that improvement in one factor may offset deterioration in others. Management believes that the allowance for credit losses, as calculated in accordance with the Company’s current expected credit loss (“CECL”) methodology, is appropriate to cover expected credit losses on loans at September 30, 2022; however, because the allowance for credit losses is based on estimates, there can be no assurance that the ultimate charge-off amount will match such estimates. Management may determine it is appropriate to increase or decrease the allowance for expected credit losses in future periods, or actual losses in any period, either of which events could have a material impact on our results of operations in the future. Segmentation of the portfolio began with the adoption of ASC Topic 326 on January 1, 2020. The following table provides additional information on our allowance for credit losses based on a collective evaluation.
TDRs are accounted for in accordance with the applicable guidance in ASC Topic 310-40 Troubled Debt Restructurings by Creditors. TDRs represent loans on which the original terms have been modified as a result of the following conditions: (i) the restructuring constitutes a concession and (ii) the borrower is experiencing financial difficulties. Loan modifications by the Company involve payment alterations, interest rate concessions, and/or reductions in the amount owed by the customer. We do not consider TDRs as new loans because the restructuring is part of our ongoing effort to recover its investment in the original loan. The Company allows refinancing of delinquent loans on a case-by-case basis for those who satisfy certain eligibility requirements. The eligible customers can include those experiencing temporary hardships, lawsuits, or customers who have declared bankruptcy. In most cases, the loans that eligible for restructuring are between 90 and 180 days past due. We do not allow the amount of the new loan to exceed the original amount of the existing loan and we believe that refinancing the delinquent loans for certain customers provides the Company with an opportunity to increase its average loans outstanding and its interest, fees, and other income without experiencing a significant increase in loan losses. These refinancing’s also provide a resolution to temporary financial setbacks for these borrowers and sustain their credit rating. Legal fees and other direct costs incurred by the Company during a restructuring are expensed when incurred. The effective interest rate for restructured loan is based on the original contractual rate, not the rate specified in the restructuring agreement. The modified loans are adjusted to be recorded at the value of expected cash flows to be received in the future. Modifications that lower the principal balance experience a direct charge-off for the difference of the original and modified principal amount. The majority of the restructurings relate to fee and interest rate concessions as the Company only lowers the principal balance due in the event of a court order. The following table presents a summary of loans that were restructured during the three months ended September 30, 2022.
The following table presents a summary of loans that were restructured during the three months ended September 30, 2021.
The following table presents a summary of loans that were restructured during the nine months ended September 30, 2022.
The following table presents a summary of loans that were restructured during the nine months ended September 30, 2021.
TDRs that occurred during the twelve months ended September 30, 2022 and subsequently defaulted during the three months ended September 30, 2022 are listed below.
TDRs that occurred during the twelve months ended September 30, 2021 and subsequently defaulted during the three months ended September 30, 2021 are listed below.
TDRs that occurred during the twelve months ended September 30, 2022 and subsequently defaulted during the nine months ended September 30, 2022 are listed below.
TDRs that occurred during the twelve months ended September 30, 2021 and subsequently defaulted during the nine months ended September 30, 2021 are listed below.
The level of TDRs, including those which have experienced a subsequent default, is considered in the determination of an appropriate level of allowance of credit losses.
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Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments Securities | Investment Securities Debt securities available-for-sale are carried at estimated fair value. The amortized cost and estimated fair values of these debt securities were as follows:
Gross unrealized losses on investment securities totaled $47.2 million and $0.9 million at September 30, 2022 and December 31, 2021, respectively. The following table provides an analysis of investment securities in an unrealized loss position for which an allowance for credit losses is unnecessary as of September 30, 2022 and December 31, 2021:
The previous two tables represent 232 and 34 investments held by the Company at September 30, 2022 and December 31, 2021, respectively, the majority of which are rated “A” or higher by Moody’s and/or Standard & Poor’s. The unrealized losses on the Company’s investments listed in the above table were primarily the result of interest rate and market fluctuations. Based on the credit ratings of these investments, along with the consideration of whether the Company has the intent to sell or will be more likely than not required to sell the applicable investment before recovery of amortized cost basis, no other than temporary impairment was determined to be necessary as of September 30, 2022 and December 31, 2021. No securities were sold to date in 2022. Additionally, the Company sold no securities during the year ended December 31, 2021. Proceeds from redemption of investments due the exercise of call provisions by the issuers thereof and regularly scheduled maturities totaled $20.9 million with a net gain of $0.5 million and $15.9 million with a net gain of $0.3 million as of September 30, 2022 and December 31, 2021 respectively. The Company’s insurance subsidiaries internally designate certain investments as restricted to cover their policy reserves and loss reserves. Funds are held in separate trusts for the benefit of each insurance subsidiary at U.S. Bank National Association ("US Bank"). US Bank serves as trustee under trust agreements with the Company's property and casualty insurance company subsidiary (“Frandisco P&C”), as grantor, and American Bankers Insurance Company of Florida, as beneficiary. At September 30, 2022, these trusts held $39.6 million in available-for-sale investment securities at market value. US Bank also serves as trustee under trust agreements with the Company's life insurance company subsidiary (“Frandisco Life”), as grantor, and American Bankers Life Assurance Company, as beneficiary. At September 30, 2022, these trusts held $24.1 million in available-for-sale investment securities at market value. The amounts required to be held in each trust change as required reserves change. All earnings on assets in the trusts are remitted to the Company's insurance subsidiaries.
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value | Fair Value Under ASC Topic 820, fair value is the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following fair value hierarchy is used in selecting inputs used to determine the fair value of an asset or liability, with the highest priority given to Level 1, as these are the most transparent or reliable. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurements. Level 1 - Quoted prices for identical instruments in active markets. Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets. Level 3 - Valuations derived from valuation techniques in which one or more significant inputs are unobservable. The following methods and assumptions are used by the Company in estimating fair values of its financial instruments: Cash and Cash Equivalents: Cash includes cash on hand and with banks. Cash equivalents are short-term highly liquid investments with original maturities of three months or less. The carrying value of cash and cash equivalents approximates fair value due to the relatively short period of time between the origination of the instruments and their expected realization. Cash and cash equivalents are classified as a Level 1 financial asset. Loans: The fair value of the Company's direct cash loans and sales finance contracts approximate the carrying value since the estimated life, assuming prepayments, is short-term in nature. The fair value of the Company's real estate loans approximates the carrying value since the interest rate charged by the Company approximates market rates. Loans are classified as a Level 3 financial asset. Marketable Debt Securities: Management has designated the Company's investment securities held in the Company's investment portfolio at September 30, 2022 and December 31, 2021 as being available-for-sale. The investment portfolio is reported at fair value with unrealized gains and losses excluded from earnings and reported in other comprehensive income (loss) included in the consolidated statements of comprehensive income (loss). Gains and losses on sales of securities designated as available-for-sale are determined based on the specific identification method; therefore, Marketable Debt Securities are classified as a Level 2 financial asset. Corporate Securities: The Company estimates the fair value of corporate securities with readily determinable fair values based on quoted prices observed in active markets; therefore, these investments are classified as a Level 1 financial asset. Senior Debt Securities: The carrying value of the Company's senior debt securities approximates fair value due to the relatively short period of time between the origination of the instruments and their expected payment. Senior debt securities are classified as a Level 2 financial liability. Subordinated Debt Securities: The carrying value of the Company's subordinated debt securities approximates fair value due to the re-pricing frequency of the securities. Subordinated debt securities are classified as a Level 2 financial liability. The Company is responsible for the valuation process and as part of this process may use data from outside sources in establishing fair value. The Company performs due diligence to understand the inputs and how the data was calculated or derived. The Company employs a market approach in the valuation of its obligations of states, political subdivisions and municipal revenue bonds that are available-for-sale. These investments are valued on the basis of current market quotations provided by independent pricing services selected by Management based on the advice of an investment manager. To determine the value of a particular investment, these independent pricing services may use certain information with respect to market transactions in such investment or comparable investments, various relationships observed in the market between investments, quotations from dealers, and pricing metrics and calculated yield measures based on valuation methodologies commonly employed in the market for such investments. Quoted prices are subject to our internal price verification procedures. We validate prices received using a variety of methods including, but not limited, to comparison to other pricing services or corroboration of pricing by reference to independent market data such as a secondary broker. There was no change in this methodology during any period reported. Assets measured at fair value as of September 30, 2022 and December 31, 2021 were available-for-sale investment securities which are summarized below:
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases The Company is obligated under operating leases for its branch loan offices and home office locations. The operating leases are recorded as operating lease right-of-use (“ROU”) assets and operating lease liabilities. ROU assets represent the Company’s right to use an underlying asset during the lease term and the operating lease liabilities represent the Company’s obligations for lease payments in accordance with the lease. Recognition of ROU assets and liabilities are recognized at the lease commitment date based on the present value of the remaining lease payments using a discount rate that represents the Company’s incremental borrowing rate at the lease commitment date or the ASC Topic 842 adoption date. Operating lease expense, which is comprised of amortization of the ROU asset and the implicit interest accreted on the operating lease liability, is recognized on a straight-line basis over the lease term and is recorded in occupancy expense in the condensed consolidated statement of income. Remaining lease terms range from 1 to 10 years. The Company’s leases are not complex and do not contain residual value guarantees, variable lease payments, or significant assumptions or judgments made in applying the requirements of ASC Topic 842. Operating leases with a term of 12 months or less are not recorded on the balance sheet and the related lease expense is recognized on a straight-line basis over the lease term. Operating lease ROU assets and operating lease liabilities were $37.9 million and $38.7 million at September 30, 2022, respectively and $34.9 million and $35.5 million at September 30, 2021, respectively. At December 31, 2021 the operating lease ROU assets and operating liabilities were $34.8 million and $35.4 million, respectively. The table below summarizes our lease expense and other information related to the Company’s operating leases with respect to ASC Topic 842:
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Commitments and Contingencies |
9 Months Ended |
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Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies We conduct our lending operations under the provisions of various federal and state laws, implementing regulations, and insurance regulations. Changes in the current regulatory environment, or the interpretation or application of current regulations, could impact our business. The Company is subject to various legal proceedings, claims and administrative proceedings arising in the ordinary course of business, some of which are expected to be covered by liability insurance. Management makes assumptions and estimates concerning the likelihood and amount of any potential loss relating to these matters using the latest information available. The Company records a liability for litigation if an unfavorable outcome is probable and the amount of loss or range of loss can be reasonably estimated. If an unfavorable outcome is probable and a reasonable estimate of the loss is a range, the Company accrues the best estimate within the range. If no amount within the range is a better estimate than any other amount, the Company accrues the minimum amount within the range. If an unfavorable outcome is probable but the amount of the loss cannot be reasonably estimated, the Company discloses the nature of the litigation and indicates that an estimate of the loss or range of loss cannot be made. If an unfavorable outcome is reasonably possible and the estimated loss is material, the Company discloses the nature and estimate of the possible loss of the litigation. The Company does not disclose information with respect to litigation where an unfavorable outcome is considered to be remote or where the estimated loss would not be material. Based on current expectations, such matters, both individually and in the aggregate, are not expected to have a material adverse effect on the liquidity, results of operations, business or financial condition of the Company.
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Income Taxes |
9 Months Ended |
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Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesThe Company has elected to be treated as an S corporation for income tax reporting purposes. The taxable income or loss of an S corporation is treated as income of and is reportable in the individual tax returns of the shareholders of the Company in an appropriate allocation. Accordingly, deferred income tax assets and liabilities have been eliminated and no provisions for current and deferred income taxes were made by the Company except for amounts attributable to state income taxes for certain states, which do not recognize S corporation status for income tax reporting purposes. Deferred income tax assets and liabilities will continue to be recognized and provisions for current and deferred income taxes will be made by the Company’s subsidiaries as they are not permitted to be treated as S Corporations.Effective income tax rates were 43% and 16% during the three- and nine-month periods ended September 30, 2022, respectively, compared to 9% and 8%, for the same periods last year. During the current year, the S corporation income was lower than the prior year, which decreased the overall pre-tax income of the Company resulting in a higher effective tax rate for the 2022 reporting period compared to the same period in 2021. |
Credit Agreement |
9 Months Ended |
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Sep. 30, 2022 | |
Line of Credit Facility [Abstract] | |
Credit Agreement | Credit AgreementEffective September 11, 2009, the Company entered into a credit facility with Wells Fargo Preferred Capital, Inc. As amended to date, the credit agreement provides for borrowings and reborrrowings up to the lesser of $230.0 million or 70% of the Company’s net finance receivables (as defined in the credit agreement). Available borrowings under the credit agreement were $172.6 million and $169.7 million at September 30, 2022 and December 31, 2021, at an interest rate of 5.30% and 3.50%, respectively. Outstanding borrowings on the credit line were $57.4 million and $60.3 million at September 30, 2022 and December 31, 2021, respectively. The credit agreement contains covenants customary for financing transactions of this type. At September 30, 2022, the Company believes it was in compliance with all covenants. The credit agreement has a commitment termination date of February 28, 2025. |
Related Party Transactions |
9 Months Ended |
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Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party TransactionsThe Company engages from time to time in transactions with related parties. The Company has an outstanding loan to a real estate development partnership of which one of the Company’s beneficial owners is a partner. The balance on the commercial loan (including principal and accrued interest) was $1.9 million at September 30, 2022. The Company also has a loan for premium payments to a trust of an executive officer’s irrevocable life insurance policy. The principal balance on this loan at September 30, 2022 was $0.5 million. Please refer to the disclosure contained in Note 12 “Related Party Transactions” in the Notes to Consolidated Financial Statements in the Company’s Annual Report on Form 10-K as of and for the year ended December 31, 2021 for additional information on related party transactions. |
Segment Financial Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Financial Information | Segment Financial Information The Company discloses segment information in accordance with ASC Topic 280. ASC Topic 280 requires companies to determine segments based on how Management makes decisions about allocating resources to segments and measuring their performance. The Company has eight divisions which comprise its operations: Division I through Division V, Division VII, Division VIII and Division IX. Each division consists of branch offices that are aggregated based on vice president responsibility and geographic location. Division I consists of offices located in South Carolina. Offices in North Georgia comprises Division II, Division III consists of offices in South Georgia and Division IX consists of offices in West Georgia. Division IV represents our Alabama offices, Division V represents our Mississippi offices, Division VII represents our Kentucky and Tennessee branch offices and Division VIII represents our Louisiana and Texas offices. Accounting policies of each of the divisions are the same as those for the Company as a whole. Performance is measured based on objectives set at the beginning of each year and include various factors such as division profit, growth in earning assets and delinquency and loan loss management. All division revenues result from transactions with third parties. The Company does not allocate income taxes or corporate headquarter expenses to the divisions. Below is a performance recap of each of the Company’s divisions for the three- and nine-month periods ended September 30, 2022, and 2021, followed by a reconciliation to consolidated Company data.
Note 1: Includes Finance Charge Income, Investment Income, Insurance Premium Revenues and Other Revenue.
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Basis of Presentation (Policies) |
9 Months Ended |
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Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements: In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting”, which provides optional accounting relief for the expected market transition from the use of the London Interchange Bank Offered Rate (“LIBOR”) to the proposed Secured Overnight Financing Rate (“SOFR”). The key provisions of optional relief include (1) accounting for contract modifications as a continuation of the existing contract without additional analysis and (2) continuing hedge accounting when certain critical terms of a hedging relationship change. There was no impact of ASU No. 2020-04 on the Company’s condensed consolidated financial statements for the period ended September 30, 2022. The Company's benchmark rate on its line of credit will transition from the London Interchange Bank Offered Rate ("LIBOR") to the Secured Overnight Financing Rate ("SOFR") provided the SOFR rate does not fall below the floor interest rate. Management anticipates that adoption of the new standard will not have a material impact on the Company's financial statements. In March 2022 the FASB issued ASU No. 2022-02 "Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructuring and Vintage Disclosures. The key provisions include (1) enhancements to disclosure requirements for certain loan refinancings and restructurings by creditor when borrower is experiencing financial difficulty, the creditor must apply the loan refinancing and restructuring guidance to determine whether a modification results in a new loan or a continuation of an existing loan (2) for public business entities, the entity is required to disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases. The amendments in this update are effective for annual and interim periods beginning after December 15, 2022. The Company is currently evaluating the effect of disclosure updates to its footnotes, but believes implementation will not have a material financial effect on its financial statements.
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Fair Value | Under ASC Topic 820, fair value is the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following fair value hierarchy is used in selecting inputs used to determine the fair value of an asset or liability, with the highest priority given to Level 1, as these are the most transparent or reliable. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurements. Level 1 - Quoted prices for identical instruments in active markets. Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets. Level 3 - Valuations derived from valuation techniques in which one or more significant inputs are unobservable. The following methods and assumptions are used by the Company in estimating fair values of its financial instruments: Cash and Cash Equivalents: Cash includes cash on hand and with banks. Cash equivalents are short-term highly liquid investments with original maturities of three months or less. The carrying value of cash and cash equivalents approximates fair value due to the relatively short period of time between the origination of the instruments and their expected realization. Cash and cash equivalents are classified as a Level 1 financial asset. Loans: The fair value of the Company's direct cash loans and sales finance contracts approximate the carrying value since the estimated life, assuming prepayments, is short-term in nature. The fair value of the Company's real estate loans approximates the carrying value since the interest rate charged by the Company approximates market rates. Loans are classified as a Level 3 financial asset. Marketable Debt Securities: Management has designated the Company's investment securities held in the Company's investment portfolio at September 30, 2022 and December 31, 2021 as being available-for-sale. The investment portfolio is reported at fair value with unrealized gains and losses excluded from earnings and reported in other comprehensive income (loss) included in the consolidated statements of comprehensive income (loss). Gains and losses on sales of securities designated as available-for-sale are determined based on the specific identification method; therefore, Marketable Debt Securities are classified as a Level 2 financial asset. Corporate Securities: The Company estimates the fair value of corporate securities with readily determinable fair values based on quoted prices observed in active markets; therefore, these investments are classified as a Level 1 financial asset. Senior Debt Securities: The carrying value of the Company's senior debt securities approximates fair value due to the relatively short period of time between the origination of the instruments and their expected payment. Senior debt securities are classified as a Level 2 financial liability. Subordinated Debt Securities: The carrying value of the Company's subordinated debt securities approximates fair value due to the re-pricing frequency of the securities. Subordinated debt securities are classified as a Level 2 financial liability. The Company is responsible for the valuation process and as part of this process may use data from outside sources in establishing fair value. The Company performs due diligence to understand the inputs and how the data was calculated or derived. The Company employs a market approach in the valuation of its obligations of states, political subdivisions and municipal revenue bonds that are available-for-sale. These investments are valued on the basis of current market quotations provided by independent pricing services selected by Management based on the advice of an investment manager. To determine the value of a particular investment, these independent pricing services may use certain information with respect to market transactions in such investment or comparable investments, various relationships observed in the market between investments, quotations from dealers, and pricing metrics and calculated yield measures based on valuation methodologies commonly employed in the market for such investments. Quoted prices are subject to our internal price verification procedures. We validate prices received using a variety of methods including, but not limited, to comparison to other pricing services or corroboration of pricing by reference to independent market data such as a secondary broker. There was no change in this methodology during any period reported.
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Loans | Loans The Company’s consumer loans are made to individuals, who may be new customers, existing customers (loan renewals), former customers or customers converting from a sales contract, in relatively small amounts for relatively short periods of time. First and second mortgage loans on real estate are made in larger amounts and for longer periods of time. The Company also purchases sales finance contracts from various dealers. All loans and sales contracts are held for investment. Cash, unearned finance charges, origination fees, discounts, premiums, deferred fees, and, in the instance of a loan renewal, the net payoff of the of the renewed loan are included in the loan origination amount. The cash component of the loan origination is included in the Statement of Cash Flows in the Cash Flows from Investing Activities as Loans Originated or Purchased. Loan renewals are accounted for in accordance with the applicable guidance in ASC Topic 310-20 Nonrefundable Fees and Other Costs. Loan renewals are a product the Company offers to existing customers that allows them to borrow additional funds from the Company. In evaluating a loan for renewal, in addition to our standard underwriting requirements, we may take into consideration the customer’s prior payment performance with us, which we believe to be an indicator of the customer’s future credit performance. If the terms of the new loan resulting from a loan renewal (other than a troubled debt restructuring) are at least as favorable to us as the terms for comparable loans to other customers with similar collection risks who are not renewing a loan, the renewal is accounted for as a new loan. The criteria is met if the new loan's effective yield is at least equal to the effective yield for such comparable loans and the modification of the original loan is more than minor. A modification of a loan is more than minor if the present value of the cash flows under the terms of the renewal is at least 10 percent different from the present value of the remaining cash flows under the terms of the original loan. Accordingly, when a renewal is generated, the original loan(s) are extinguished along with the associated unearned finance charges and a new loan is originated. Substantially all renewals include a non-cash component that represents the exchange of the original principal balance for the new principal balance and a cash component for the net proceeds distributed to the customer for the additional amount borrowed. The cash component is presented as outflows from investing activities and the non-cash component is presented as a non-cash investing activity.
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Basis of Presentation (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of reconciliation of cash, cash equivalents and restricted cash | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported shown in the condensed consolidated statements of cash flows:
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Loans (Tables) |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts, Notes, Loans and Financing Receivable | The Company’s principal balances on non-accrual loans by loan class as of September 30, 2022 and December 31, 2021 are as follows:
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Financing Receivable, Past Due | An age analysis of principal balances on past due loans, segregated by loan class, as of September 30, 2022 and December 31, 2021 follows:
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Financing Receivable Credit Quality Indicators | The following table presents the principal balance on loans based on payment activity as of September 30, 2022:
(1)Includes loans originated during the nine-months ended September 30, 2022.
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Financing Receivable, Allowance for Credit Loss | Segmentation of the portfolio began with the adoption of ASC Topic 326 on January 1, 2020. The following table provides additional information on our allowance for credit losses based on a collective evaluation.
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Financing Receivable, Troubled Debt Restructuring | The following table presents a summary of loans that were restructured during the three months ended September 30, 2022.
The following table presents a summary of loans that were restructured during the three months ended September 30, 2021.
The following table presents a summary of loans that were restructured during the nine months ended September 30, 2022.
The following table presents a summary of loans that were restructured during the nine months ended September 30, 2021.
TDRs that occurred during the twelve months ended September 30, 2022 and subsequently defaulted during the three months ended September 30, 2022 are listed below.
TDRs that occurred during the twelve months ended September 30, 2021 and subsequently defaulted during the three months ended September 30, 2021 are listed below.
TDRs that occurred during the twelve months ended September 30, 2022 and subsequently defaulted during the nine months ended September 30, 2022 are listed below.
TDRs that occurred during the twelve months ended September 30, 2021 and subsequently defaulted during the nine months ended September 30, 2021 are listed below.
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Investment Securities (Tables) |
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Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Securities, Available-for-Sale | The amortized cost and estimated fair values of these debt securities were as follows:
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Debt Securities, Available-for-Sale, Unrealized Loss Position, Fair Value | The following table provides an analysis of investment securities in an unrealized loss position for which an allowance for credit losses is unnecessary as of September 30, 2022 and December 31, 2021:
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Fair Value (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements, Recurring and Nonrecurring | Assets measured at fair value as of September 30, 2022 and December 31, 2021 were available-for-sale investment securities which are summarized below:
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Leases (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease, Cost | The table below summarizes our lease expense and other information related to the Company’s operating leases with respect to ASC Topic 842:
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Segment Financial Information (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment | Below is a performance recap of each of the Company’s divisions for the three- and nine-month periods ended September 30, 2022, and 2021, followed by a reconciliation to consolidated Company data.
Note 1: Includes Finance Charge Income, Investment Income, Insurance Premium Revenues and Other Revenue.
|
Basis of Presentation - Schedule of reconciliation of cash, cash equivalents and restricted cash (Details) - USD ($) |
Sep. 30, 2022 |
Sep. 30, 2021 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Cash and Cash Equivalents | $ 46,679,743 | $ 40,501,929 |
Restricted Cash | 12,429,013 | 8,036,687 |
Total Cash, Cash Equivalents and Restricted Cash | $ 59,108,756 | $ 48,538,616 |
Basis of Presentation - Narrative (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
INTEREST INCOME | $ 70,724,286 | $ 61,655,769 | $ 204,867,038 | $ 179,429,799 |
Premiums and Commissions | 14,772,163 | 13,700,612 | 42,851,191 | 39,236,865 |
OTHER REVENUE | $ 1,835,940 | $ 1,693,871 | $ 5,381,846 | $ 4,457,156 |
Loans - Narrative (Details) - USD ($) |
9 Months Ended | |||||
---|---|---|---|---|---|---|
Sep. 30, 2022 |
Jun. 30, 2022 |
Dec. 31, 2021 |
Sep. 30, 2021 |
Jun. 30, 2021 |
Dec. 31, 2020 |
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Receivables [Abstract] | ||||||
Loan balances still accruing interest | $ 0 | $ 0 | ||||
Ratio of bankrupt accounts to loan portfolio, percent | 1.51% | 1.27% | ||||
Qualitative adjustment to allowance for credit loss | $ 14,500,000 | |||||
Increase in allowance for credit loss | 5,900,000 | |||||
Allowance for Credit Losses | $ 73,226,636 | $ 68,302,012 | $ 67,311,208 | $ 63,313,910 | $ 63,601,747 | $ 66,327,674 |
Loans - Schedule of Principal Balances on Non Accrual Loans (Details) - USD ($) |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Total | $ 52,675,177 | $ 38,556,850 |
Live Check Consumer Loans | ||
Total | 9,764,145 | 6,254,394 |
Premier Consumer Loans | ||
Total | 3,671,327 | 2,253,818 |
Other Consumer Loans | ||
Total | 32,476,237 | 25,229,846 |
Real Estate Loans | ||
Total | 1,847,661 | 1,286,609 |
Sales Finance Contracts | ||
Total | $ 4,915,807 | $ 3,532,183 |
Loans - Allowance for Credit Losses on Financing Receivables (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | $ 68,302,012 | $ 63,601,747 | $ 67,311,208 | $ 66,327,674 |
Provision for loan losses | 24,967,844 | 9,720,108 | 57,024,372 | 23,853,439 |
Charge-offs | (25,547,272) | (14,943,928) | (67,380,853) | (42,745,089) |
Recoveries | 5,504,052 | 4,935,983 | 16,271,909 | 15,877,886 |
Ending balance | 73,226,636 | $ 63,313,910 | 73,226,636 | $ 63,313,910 |
Live Checks | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 12,823,248 | 10,648,999 | ||
Provision for loan losses | 8,778,927 | 18,511,047 | ||
Charge-offs | (6,758,590) | (15,923,959) | ||
Recoveries | 853,415 | 2,460,913 | ||
Ending balance | 15,697,000 | 15,697,000 | ||
Premier Loans | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 5,612,889 | 6,216,094 | ||
Provision for loan losses | 855,452 | 1,933,725 | ||
Charge-offs | (1,369,328) | (3,603,250) | ||
Recoveries | 269,992 | 822,436 | ||
Ending balance | 5,369,005 | 5,369,005 | ||
Other Consumer Loans | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 42,672,338 | 44,646,394 | ||
Provision for loan losses | 14,169,431 | 31,660,819 | ||
Charge-offs | (15,771,370) | (43,061,572) | ||
Recoveries | 3,977,571 | 11,802,329 | ||
Ending balance | 45,047,970 | 45,047,970 | ||
Real Estate Loans | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 245,393 | 264,679 | ||
Provision for loan losses | (16,179) | (17,982) | ||
Charge-offs | (2,125) | (25,727) | ||
Recoveries | 1,088 | 7,207 | ||
Ending balance | 228,177 | 228,177 | ||
Sales Finance Contracts | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 6,948,144 | 5,535,042 | ||
Provision for loan losses | 1,180,213 | 4,936,763 | ||
Charge-offs | (1,645,859) | (4,766,345) | ||
Recoveries | 401,986 | 1,179,024 | ||
Ending balance | $ 6,884,484 | $ 6,884,484 |
Loans - Troubled Debt Restructurings on Financing Receivables (Details) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022
USD ($)
|
Sep. 30, 2021
USD ($)
|
Sep. 30, 2022
USD ($)
|
Sep. 30, 2021
USD ($)
|
|
Number Of Loans | 9,170 | 4,228 | 21,643 | 10,942 |
Pre-Modification Recorded Investment | $ 34,030,537 | $ 15,250,136 | $ 79,629,633 | $ 39,094,692 |
Post-Modification Recorded Investment | $ 33,230,495 | $ 14,631,833 | $ 77,378,852 | $ 37,477,962 |
Number Of Loans | 2,787 | 1,315 | 5,983 | 3,234 |
Pre-Modification Recorded Investment | $ 6,544,359 | $ 3,147,691 | $ 13,751,581 | $ 7,576,437 |
Live Check Consumer Loans | ||||
Number Of Loans | 2,014 | 476 | 4,401 | 1,545 |
Pre-Modification Recorded Investment | $ 3,451,252 | $ 882,720 | $ 7,846,903 | $ 2,914,444 |
Post-Modification Recorded Investment | $ 3,407,612 | $ 867,401 | $ 7,726,052 | $ 2,854,145 |
Number Of Loans | 816 | 233 | 1,583 | 632 |
Pre-Modification Recorded Investment | $ 1,359,420 | $ 430,947 | $ 2,787,256 | $ 1,201,511 |
Premier Consumer Loans | ||||
Number Of Loans | 307 | 116 | 685 | 329 |
Pre-Modification Recorded Investment | $ 2,032,375 | $ 683,833 | $ 4,539,046 | $ 1,958,784 |
Post-Modification Recorded Investment | $ 1,988,734 | $ 652,114 | $ 4,420,462 | $ 1,884,830 |
Number Of Loans | 61 | 36 | 132 | 80 |
Pre-Modification Recorded Investment | $ 348,886 | $ 165,621 | $ 724,271 | $ 426,426 |
Other Consumer Loans | ||||
Number Of Loans | 6,500 | 3,454 | 15,740 | 8,515 |
Pre-Modification Recorded Investment | $ 26,059,174 | $ 12,474,462 | $ 61,206,344 | $ 30,642,643 |
Post-Modification Recorded Investment | $ 25,414,534 | $ 11,947,658 | $ 59,387,615 | $ 29,264,870 |
Number Of Loans | 1,831 | 995 | 4,130 | 2,390 |
Pre-Modification Recorded Investment | $ 4,452,585 | $ 2,345,963 | $ 9,570,912 | $ 5,415,570 |
Real Estate Loans | ||||
Number Of Loans | 6 | 8 | 18 | 24 |
Pre-Modification Recorded Investment | $ 48,316 | $ 110,854 | $ 162,662 | $ 280,574 |
Post-Modification Recorded Investment | $ 48,271 | $ 110,854 | $ 160,616 | $ 280,350 |
Number Of Loans | 1 | 0 | 1 | 0 |
Pre-Modification Recorded Investment | $ 2,080 | $ 0 | $ 2,080 | $ 0 |
Sales Finance Contracts | ||||
Number Of Loans | 343 | 174 | 799 | 529 |
Pre-Modification Recorded Investment | $ 2,439,420 | $ 1,098,267 | $ 5,874,678 | $ 3,298,247 |
Post-Modification Recorded Investment | $ 2,371,344 | $ 1,053,806 | $ 5,684,107 | $ 3,193,767 |
Number Of Loans | 78 | 51 | 137 | 132 |
Pre-Modification Recorded Investment | $ 381,388 | $ 205,160 | $ 667,062 | $ 532,930 |
Investment Securities - Schedule of amortized cost and estimated fair values of debt securities (Details) - USD ($) |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Amortized Cost | $ 256,182,140 | $ 248,988,818 |
Estimated Fair Value | 209,554,380 | 261,601,925 |
Obligations of states and political subdivisions | ||
Amortized Cost | 256,051,824 | 248,858,502 |
Estimated Fair Value | 209,210,455 | 261,183,377 |
Corporate securities | ||
Amortized Cost | 130,316 | 130,316 |
Estimated Fair Value | $ 343,925 | $ 418,548 |
Investment Securities - Narrative (Details) $ in Millions |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2022
USD ($)
security
|
Dec. 31, 2021
USD ($)
security
|
|
Debt Securities, Available-for-Sale [Line Items] | ||
Gross unrealized losses on investment securities | $ 47.2 | $ 0.9 |
Number of securities | security | 232 | 34 |
Proceeds from maturity of debt Securities | $ 20.9 | $ 15.9 |
Gain on sale of investments | 0.5 | $ 0.3 |
Frandisco P&C | ||
Debt Securities, Available-for-Sale [Line Items] | ||
Debt securities, restricted | 39.6 | |
Frandisco Life | ||
Debt Securities, Available-for-Sale [Line Items] | ||
Debt securities, restricted | $ 24.1 |
Investment Securities - Schedule of Investment Securities Fair Value and Unrealized Losses (Details) - Obligations of states and political subdivisions - USD ($) |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
AFS, Less than 12 months, Fair Value | $ 159,469,675 | $ 41,660,651 |
AFS, Less than 12 months, Unrealized Loss | (31,451,271) | (896,338) |
AFS, 12 months or longer, Fair Value | 23,784,344 | 652,921 |
AFS, 12 months or longer, Unrealized Loss | (15,771,300) | (52,078) |
AFS, Total Fair Value | 183,254,019 | 42,313,572 |
AFS, Total Unrealized Loss | $ (47,222,571) | $ (948,416) |
Fair Value - Fair Value Measurements, by Fair Value hierarchy (Details) - USD ($) |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Estimated Fair Value | $ 209,554,380 | $ 261,601,925 |
Corporate securities | ||
Estimated Fair Value | 343,925 | 418,548 |
Obligations of states and political subdivisions | ||
Estimated Fair Value | 209,210,455 | 261,183,377 |
Quoted Prices In Active Markets for Identical Assets (Level1) | ||
Estimated Fair Value | 343,925 | 418,548 |
Quoted Prices In Active Markets for Identical Assets (Level1) | Corporate securities | ||
Estimated Fair Value | 343,925 | 418,548 |
Quoted Prices In Active Markets for Identical Assets (Level1) | Obligations of states and political subdivisions | ||
Estimated Fair Value | 0 | 0 |
Significant Other Observable Inputs (Level2) | ||
Estimated Fair Value | 209,210,455 | 261,183,377 |
Significant Other Observable Inputs (Level2) | Corporate securities | ||
Estimated Fair Value | 0 | 0 |
Significant Other Observable Inputs (Level2) | Obligations of states and political subdivisions | ||
Estimated Fair Value | 209,210,455 | 261,183,377 |
Significant Unobservable Inputs (Level3) | ||
Estimated Fair Value | 0 | 0 |
Significant Unobservable Inputs (Level3) | Corporate securities | ||
Estimated Fair Value | 0 | 0 |
Significant Unobservable Inputs (Level3) | Obligations of states and political subdivisions | ||
Estimated Fair Value | $ 0 | $ 0 |
Leases - Narrative (Details) - USD ($) |
Sep. 30, 2022 |
Dec. 31, 2021 |
Sep. 30, 2021 |
---|---|---|---|
Lessee, Lease, Description [Line Items] | |||
Lease ROU asset | $ 37,908,784 | $ 34,768,208 | $ 34,900,000 |
Present Value of Lease Liability | $ 38,738,886 | $ 35,439,377 | $ 35,517,522 |
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Remaining lease term | 1 year | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Remaining lease term | 10 years |
Leases - Schedule of Lease expense and other information (Details) - USD ($) |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
Dec. 31, 2021 |
|
Leases [Abstract] | |||||
Operating lease expense | $ 1,982,602 | $ 1,886,300 | $ 5,827,850 | $ 5,597,703 | |
Cash paid for amounts included in the measurement of lease liabilities: | |||||
Operating cash flows from operating leases | $ 1,938,062 | $ 1,859,919 | $ 5,725,541 | $ 5,505,031 | |
Weighted-average remaining lease term – operating leases (in years) | 7 years 2 months 1 day | 7 years 7 days | 7 years 2 months 1 day | 7 years 7 days | |
Weighted-average discount rate – operating leases | 4.72% | 4.55% | 4.72% | 4.55% | |
Lease maturity schedule as of September 30, 2022: | |||||
Remainder of 2022 | $ 1,967,552 | $ 1,871,404 | $ 1,967,552 | $ 1,871,404 | |
2023 | 7,506,393 | 7,144,891 | 7,506,393 | 7,144,891 | |
2024 | 6,709,791 | 6,268,419 | 6,709,791 | 6,268,419 | |
2025 | 6,344,271 | 5,485,448 | 6,344,271 | 5,485,448 | |
2026 | 5,777,773 | 5,128,419 | 5,777,773 | 5,128,419 | |
2027 and beyond | 17,343,550 | 15,402,634 | 17,343,550 | 15,402,634 | |
Total | 45,649,330 | 41,301,215 | 45,649,330 | 41,301,215 | |
Less: Discount | (6,910,444) | (5,783,693) | (6,910,444) | (5,783,693) | |
Present Value of Lease Liability | $ 38,738,886 | $ 35,517,522 | $ 38,738,886 | $ 35,517,522 | $ 35,439,377 |
Income Taxes - Narrative (Details) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate reconciliation | 43.00% | 9.00% | 16.00% | 8.00% |
Credit Agreement - Narrative (Details) - Line of Credit - Wells Fargo Credit Facility - USD ($) $ in Millions |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Maximum borrowing capacity | $ 230.0 | |
Maximum borrowing capacity, percentage of net finance receivables | 70.00% | |
Remaining borrowing capacity | $ 172.6 | $ 169.7 |
Interest rate at period end | 5.30% | 3.50% |
Current borrowing capacity | $ 57.4 | $ 60.3 |
Related Party Transactions - Narrative (Details) $ in Millions |
Sep. 30, 2022
USD ($)
|
---|---|
Related Party Transactions [Abstract] | |
Balance on commercial loan (including principal and accrued interest) | $ 1.9 |
Balance on loan for premium payments (including principal and accrued interest) | $ 0.5 |
Segment Financial Information - Narrative (Details) |
9 Months Ended |
---|---|
Sep. 30, 2022
segment
| |
Segment Reporting [Abstract] | |
Number of reportable segments | 8 |
Segment Financial Information - Schedule of Segment Reporting Information, by Segment (Details) - USD ($) |
3 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
Dec. 31, 2021 |
|||
Division Revenues: | [1] | $ 87,332,000 | $ 77,050,000 | $ 253,101,000 | $ 223,124,000 | ||
Division Assets: | 1,146,297,011 | 1,146,297,011 | $ 1,118,221,935 | ||||
Reconciliation of Revenues: | |||||||
Revenues | [1] | 87,332,000 | 77,050,000 | 253,101,000 | 223,124,000 | ||
Reconciliation of Profit: | |||||||
INCOME BEFORE INCOME TAXES | 3,140,747 | 11,285,456 | 20,162,448 | 35,025,699 | |||
Operating Segments | |||||||
Division Revenues: | 82,904,000 | 72,600,000 | 238,855,000 | 209,941,000 | |||
Division Assets: | 963,501,000 | 963,501,000 | 900,607,000 | ||||
Reconciliation of Revenues: | |||||||
Revenues | 82,904,000 | 72,600,000 | 238,855,000 | 209,941,000 | |||
Reconciliation of Profit: | |||||||
INCOME BEFORE INCOME TAXES | 25,941,000 | 30,254,000 | 86,762,000 | 89,074,000 | |||
Corporate, Non-Segment | Interest Income | |||||||
Division Revenues: | 30,000 | 22,000 | 76,000 | 67,000 | |||
Reconciliation of Revenues: | |||||||
Revenues | 30,000 | 22,000 | 76,000 | 67,000 | |||
Reconciliation of Profit: | |||||||
INCOME BEFORE INCOME TAXES | (27,229,000) | (23,419,000) | (80,844,000) | (67,231,000) | |||
Corporate, Non-Segment | Investment Income | |||||||
Division Revenues: | 2,040,000 | 1,811,000 | 5,834,000 | 5,549,000 | |||
Reconciliation of Revenues: | |||||||
Revenues | 2,040,000 | 1,811,000 | 5,834,000 | 5,549,000 | |||
Reconciliation of Profit: | |||||||
INCOME BEFORE INCOME TAXES | 4,429,000 | 4,450,000 | 14,245,000 | 13,183,000 | |||
Segment Reconciling Items | Timing Difference of Insurance Income Allocation | |||||||
Division Revenues: | 2,356,000 | 2,613,000 | 8,315,000 | 7,557,000 | |||
Reconciliation of Revenues: | |||||||
Revenues | 2,356,000 | 2,613,000 | 8,315,000 | 7,557,000 | |||
Segment Reconciling Items | Other Revenue Not Allocated | |||||||
Division Revenues: | 2,000 | 4,000 | 21,000 | 10,000 | |||
Reconciliation of Revenues: | |||||||
Revenues | 2,000 | 4,000 | 21,000 | 10,000 | |||
Division I | Operating Segments | |||||||
Division Revenues: | 11,334,000 | 10,020,000 | 32,518,000 | 29,246,000 | |||
Division Assets: | 122,641,000 | 122,641,000 | 115,423,000 | ||||
Reconciliation of Revenues: | |||||||
Revenues | 11,334,000 | 10,020,000 | 32,518,000 | 29,246,000 | |||
Reconciliation of Profit: | |||||||
INCOME BEFORE INCOME TAXES | 3,227,000 | 3,711,000 | 11,006,000 | 11,193,000 | |||
Division II | Operating Segments | |||||||
Division Revenues: | 11,092,000 | 10,174,000 | 31,983,000 | 29,304,000 | |||
Division Assets: | 133,286,000 | 133,286,000 | 123,844,000 | ||||
Reconciliation of Revenues: | |||||||
Revenues | 11,092,000 | 10,174,000 | 31,983,000 | 29,304,000 | |||
Reconciliation of Profit: | |||||||
INCOME BEFORE INCOME TAXES | 4,170,000 | 5,231,000 | 13,512,000 | 15,042,000 | |||
Division III | Operating Segments | |||||||
Division Revenues: | 11,405,000 | 10,592,000 | 33,367,000 | 31,083,000 | |||
Division Assets: | 128,703,000 | 128,703,000 | 125,568,000 | ||||
Reconciliation of Revenues: | |||||||
Revenues | 11,405,000 | 10,592,000 | 33,367,000 | 31,083,000 | |||
Reconciliation of Profit: | |||||||
INCOME BEFORE INCOME TAXES | 4,724,000 | 5,219,000 | 14,598,000 | 15,746,000 | |||
Division IV | Operating Segments | |||||||
Division Revenues: | 12,737,000 | 11,469,000 | 37,203,000 | 32,653,000 | |||
Division Assets: | 161,811,000 | 161,811,000 | 152,409,000 | ||||
Reconciliation of Revenues: | |||||||
Revenues | 12,737,000 | 11,469,000 | 37,203,000 | 32,653,000 | |||
Reconciliation of Profit: | |||||||
INCOME BEFORE INCOME TAXES | 4,091,000 | 5,573,000 | 14,299,000 | 15,381,000 | |||
Division V | Operating Segments | |||||||
Division Revenues: | 8,968,000 | 7,756,000 | 26,008,000 | 22,258,000 | |||
Division Assets: | 98,914,000 | 98,914,000 | 91,774,000 | ||||
Reconciliation of Revenues: | |||||||
Revenues | 8,968,000 | 7,756,000 | 26,008,000 | 22,258,000 | |||
Reconciliation of Profit: | |||||||
INCOME BEFORE INCOME TAXES | 2,717,000 | 3,234,000 | 9,230,000 | 9,244,000 | |||
Division VII | Operating Segments | |||||||
Division Revenues: | 8,882,000 | 7,223,000 | 24,709,000 | 20,941,000 | |||
Division Assets: | 100,318,000 | 100,318,000 | 91,753,000 | ||||
Reconciliation of Revenues: | |||||||
Revenues | 8,882,000 | 7,223,000 | 24,709,000 | 20,941,000 | |||
Reconciliation of Profit: | |||||||
INCOME BEFORE INCOME TAXES | 1,916,000 | 2,691,000 | 6,860,000 | 7,442,000 | |||
Division VIII | Operating Segments | |||||||
Division Revenues: | 8,751,000 | 6,450,000 | 24,959,000 | 18,400,000 | |||
Division Assets: | 100,890,000 | 100,890,000 | 90,425,000 | ||||
Reconciliation of Revenues: | |||||||
Revenues | 8,751,000 | 6,450,000 | 24,959,000 | 18,400,000 | |||
Reconciliation of Profit: | |||||||
INCOME BEFORE INCOME TAXES | 1,770,000 | 1,166,000 | 6,616,000 | 4,035,000 | |||
Division IX | Operating Segments | |||||||
Division Revenues: | 9,735,000 | 8,916,000 | 28,108,000 | 26,056,000 | |||
Division Assets: | 116,938,000 | 116,938,000 | $ 109,411,000 | ||||
Reconciliation of Revenues: | |||||||
Revenues | 9,735,000 | 8,916,000 | 28,108,000 | 26,056,000 | |||
Reconciliation of Profit: | |||||||
INCOME BEFORE INCOME TAXES | $ 3,326,000 | $ 3,429,000 | $ 10,641,000 | $ 10,991,000 | |||
|
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