WRLD 10-K & 10-Q changes, risk factors and insider trading

In addition, our profitability may be directly affected by the level ofof, and fluctuations inin, interest rates, whether caused by changes in economic conditions or other factors that affect our borrowing costs. Changes in monetary policy, including changes in interest rates, could influence the amount of interest we pay on our revolving credit facility or any other floating interest rate obligations we may incur. Our profitability and liquidity could be materially adversely affected during any period of higher interest rates. See Part II, Item 7A, “Quantitative and Qualitative Disclosure About Market Risk” for additional information regarding our interest rate risk.

Any material adverse change in the ability or willingness of a significant portion of our borrowers to meet their obligations to us, whether due to changes in economic conditions, unemployment rates, the cost of consumer goods (particularly, but not limited to, food and energy costs) and inflationary pressures, disposable income, interest rates, health crises, natural disasters, acts of war or terrorism, political or social conditions, divorce, death, or other causes over which we have no control, would have a material adverse impact on our earnings and financial condition. Additionally, delinquency and default experience on our loans isare likely to be more sensitive to changes in the economic climate in the areas in which our borrowers reside. Although new customers are required to submit a listing of personal property that will serve as collateral to secure their loans, the Company does not rely on the value of such collateral in the loan approval process and generally does not perfect its security interest in that collateral. Additionally, increases in the size of the loans we offer and average loan size could increase the chance a borrower does not meet their obligations to us and could further increase our credit risk. Additional information regarding our credit risk is included in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operation-Allowance for Credit Losses.”

Insurance claims and policyholder liabilities are difficult to predict and may exceed the related reserves set aside for claims (losses) and associated expenses for claims adjudication (loss adjustment expenses). Additionally, events such as cybersecurity attacks and breaches and other types of catastrophes,catastrophes and prolonged economic downturns, could adversely affect our financial condition and results of operations. Other risks relating to our insurance operations include changes to laws and regulations applicable to us, as well as changes to the regulatory environment, such as: changes to laws or regulations affecting capital and reserve requirements; frequency and type of regulatory monitoring and reporting; restrictions on sales process, consumer privacy, use of customer data and data security; benefits or loss ratio requirements; insurance producer licensing or appointment requirements; required disclosures to consumers; and collateral protection insurance (i.e., insurance some of our lender companies purchase, at the customer’s expense, on that customer’s loan collateral for the periods of time the customer fails to adequately, as required by his loan, insure his collateral).

To estimate the appropriate level of allowance for credit losses, we consider known and relevant internal and external factors that affect loan collectability, including the total amount of loan receivables outstanding, historical loan receivable charge-offs, our current collection patterns, and economic trends. Our methodology for establishing our allowance for credit losses is based on the guidance in ASC 326, and, in part, on our historic loss experience. If customer behavior changes as a result of economic, political, social, or other conditions, or if we are unable to predict how these conditions may affect our allowance for credit losses, our allowance for credit losses may be inadequate. Our allowance for credit losses is an estimate, and if actual credit losses are materially greater than our allowance for credit losses, our provision for credit losses would increase, which would result in a decline in our future earnings, and thus our results of operations could be adversely affected. Neither state regulators nor federal regulators regulate our allowance for credit losses. Additional information regarding our allowance for credit losses is included in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Allowance for Credit Losses.”

Adverse economic conditions—such as inflation, unemployment, interest rate volatility, or reduced consumer spending —may impair the Company's ability to execute business strategy and could materially impact it'sits financial position, operating results, and cash flows.

The Company's ability to achieve growth objectives may be hindered by external factors such as regulatory changes, economic shifts, competitive pressure, or operational constraints beyond it'sits control.

A decline in demand for products—products, combined with failure to adapt offerings or strategy—strategy, could negatively impact the business and the Company's operating results.

The demand for the products we offer may be reduced due to a variety of factors, such as demographic patterns, changes in customer preferences or financial condition, regulatory restrictions that decrease customer access to particular products, or the availability of competing products, including through alternative or competing marketing channels. For example, we are highly dependent upon selecting and maintaining attractive branch locations. These locations are subject to local market conditions, including the employment available in the area, housing costs, traffic patterns, crime, and other demographic influences, any of which may quickly change, thereby negatively impacting demand for our products in the area. Should we fail to adapt to significant changes in our customers’ demand for, or access to, our products, our revenues could decrease significantly and our operations could be harmed. Even if we do make changes to existing products or introduce new products and channels to fulfill customer demand, customers may resist or may reject such products. Moreover, the effect of any product change on the results of our business may not be fully ascertainable until the change has been in effect for some time, and by that timetime, it may be too late to make further modifications to such product without causing further harm to our business, results of operations, and financial condition.

Despite the measures we implement to protect our systems and data, we may not be able to anticipate, identify, prevent or detect cyber-attacks, ransomware, computer viruses or other security breaches, particularly because the techniques used by attackers change frequently and often are not immediately detected, and because cyber-attacks can originate from a wide variety of sources, including third parties who are or may be involved in organized crime or linked to terrorist organizations or hostile foreign governments. Such third parties may seek to gain unauthorized access to our systems directly, by fraudulently inducing employees, customers, or other users of our systems, or by using equipment or security passwords belonging to employees, customers, third-party service providers, or other users of our systems. Or, they may seek to disrupt or disable our services through attacks such as denial-of-service attacks and ransomware attacks. In addition, while we have a third-party risk management process for service providers, suppliers, and vendors, we cannot guarantee that their security controls and other protective measures will be successful in preventing an attack on their systems, which could negatively impact our operations or data. We may be unable to identify, or may be significantly delayed in identifying, cyber-attacks and incidents due to the increasing use of techniques and tools that are designed to circumvent controls, to avoid detection, and to remove or obfuscate forensic artifacts. Artificial intelligence ("AI") tools may increase threat actors' ability to detect or exploit vulnerabilities, to develop ransomware or other malware, to launch cyberattacks, or to otherwise seek to attack systems, data, software, or code relied on by us or our service providers. The increasing sophistication of AI poses a greater risk of cyber-attacks, such as through identity fraud (such as via "deepfakes"), phishing, and/or social engineering, as malicious actors may exploit AI to create convincing false identities or manipulate internal controls and/or verification processes, or to develop novel or more sophisticated attacks on a more accelerated or larger-scale basis. As a result, our computer systems, software and networks, as well as those of third-party vendors we utilize, may be vulnerable to unauthorized access, computer viruses, malicious attacks and other events that could have a security impact beyond our control. Our staff, technologies, systems, networks, and those of third-parties we utilize also may become the target of cyber-attacks, unauthorized access, malicious code, computer viruses, denial of service attacks, ransomware, and physical attacks that could result in information security breaches, the unauthorized release, gathering, monitoring, misuse, loss or destruction of our or our customers’ confidential, proprietary and other information, or otherwise disrupt our or our vendors’ operations. We also routinely transmit and receive personal, confidential and proprietary information through third parties, which may be vulnerable to interception, misuse, or mishandling.

Evolving data privacy or AI laws may increase compliance and technology costs, potentially impacting financial results and operational efficiency.

Catastrophic events affecting the off-site data center,centers, centralized IT functions, or critical third-party cloud infrastructure could disrupt operations and materially impact business continuity and financial performance.

Our information systems, and administrative and management processes could be disrupted if a catastrophic event, such as severe weather, natural disaster, power outage, act of war or terror or similar event, destroyed or severely damaged our infrastructure. Similarly, catastrophic events affecting infrastructure elsewhere in the world may shift load to infrastructure we use, and thus indirectly but adversely impact our business continuity or performance. Any such catastrophic event or other unexpected disruption of our headquarters' functions or off-site data centers could have a material adverse effect on our business, results of operations, and financial condition.

A small number of shareholders may exert significant influence over matters requiring shareholder approval, whichand couldsuch resultshareholders inmay decisionshave interests that conflict with the interests of other investors.

We have previously acquired, and in the future may acquire, assets or businesses, including large portfolios of loans receivables,receivable, either through the direct purchase of such assets or the purchase of the equity of a company with such a portfolio. Since we will not have originated or serviced the loans we acquire, we may not be aware of legal or other deficiencies related to origination or servicing, and our due diligence efforts of the acquisition prior to purchase may not uncover those deficiencies. Further, we may have limited recourse against the seller of the portfolio.

We depend to a substantial extent on borrowings under our revolving credit agreement and warehouse facility to fund our liquidity needs.

Our revolving credit agreement allows us to borrow up to $580.0$640.0 million, with an accordion feature permitting the maximum aggregate commitments to increase to $730.0$790.0 million provided that certain conditions are met. The maturity date of the revolving credit agreement is JuneJuly 7,22, 2026.2028. Pursuant to the terms of our revolving credit agreement, we are required to comply with a number of covenants and conditions, including a minimum borrowing base calculation. Our warehouse facility allows us to borrow up to $175.0 million. The maturity date of the warehouse facility is September 29, 2027. If our existing sources of liquidity become insufficient to satisfy our financial needs or our access to these sources becomes unexpectedly restricted, we may need to try to raise additional capital in the future. If such an event were to occur, we can give no assurance that such alternate sources of liquidity would be available to us at all or on favorable terms. Additional information regarding our liquidity risk is included in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Liquidity and Capital Resources.”

We may incur a substantial amount of debt in the future. As of March 31, 2025,2026, the Company's debt outstanding was $446.9 million, net of $1.0$587.2 million unamortized debt issuance costs related to the unsecured senior notes payable, and aour total debt-to-equity ratio ofwas approximately 1.01.7 to 1.0. The amount of debt we may incur in the future could have important consequences, including the following:

•we may be vulnerable to interest rate increases, as borrowings under our revolving credit agreement and warehouse facility bear interest at variable rates, as may any future debt that we incur;

In addition, meeting our anticipated liquidity requirements is contingent upon our continued compliance with our revolving credit agreement.agreement and warehouse facility. An acceleration of our debt would have a material adverse effect on our liquidity and our ability to continue as a going concern. If our debt obligations increase, whether due to the increased cost of existing indebtedness or the incurrence of additional indebtedness, the consequences described above could be magnified.

Although the terms of our revolving credit agreement and warehouse facility contain restrictions on our ability to incur additional debt, as well as any future debt that we incur, these restrictions are subject, or likely to be subject, in the case of any future debt, to exceptions that could permit us to incur a substantial amount of additional debt. In addition, our existing and future debt agreements will not prevent us from incurring certain liabilities that do not constitute indebtedness as defined for purposes of those debt agreements. If new debt or other liabilities are added to our current debt levels, the risks associated with our having substantial debt could intensify. As of March 31, 2025,2026, we had $316.7$90.1 million available for borrowing under our revolving credit agreement,agreement and $31.7 million available for borrowing under our warehouse facility, subject to borrowing base limitations and other specified terms and conditions.

Our revolving credit agreement containsand warehouse facility contain covenants that restrict our ability to, among other things:

Our revolving credit agreement also imposes requirements that we maintain specified financial measures not in excess of, or not below, specified levels. In particular, our revolving credit agreement requires, among other things, that we maintain (i) at all times a specified minimum consolidated net worth, (ii) as of the end of each fiscal quarter, a minimum ratio of consolidated net income available for fixed charges for the period of four consecutive fiscal quarters most recently ended to consolidated fixed charges for that period of not less than a specified minimum, (iii) at all times a specified maximum ratio of total debt on a consolidated basis to consolidated adjusted net worth and (iv) at all times a specified maximum collateralasset performancequality indicator. These covenants limit the manner in which we can conduct our business and could prevent us from engaging in favorable business activities or financing future operations and capital needs and impair our ability to successfully execute our strategy and operate our business.

A breach of any of the covenants in our revolving credit agreementagreements would result in an event of default thereunder. Any event of default would permit the creditors to accelerate the related debt, which could also result in the acceleration of any other or future debt containing a cross-acceleration or cross-default provision. In addition, an event of default under our revolving credit agreementagreements would permit the lenders thereunder to terminate all commitments to extend further credit under the revolving credit agreement.credit. Furthermore, if we were unable to repay the amounts due and payable under the revolving credit agreementagreements or any other secured debt we may incur, the lenders thereunder could cause the collateral agent to proceed against the collateral securing that debt. In the event our creditors accelerate the repayment of our debt, there can be no assurance that we would have sufficient assets to repay that debt, and our financial condition, liquidity and results of operations would suffer. A breach of our covenants under the Notes would have similar consequences. Additional information regarding our revolving credit facility and Noteswarehouse isfacility are included in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Liquidity and Capital Resources.”

Turbulence in the global or domestic capital markets or other macro-economic factors can result in disruptions in the financial sector, including bank failures, and can affect lenders with which we have relationships, including members of the syndicate of banks that are lenders under our revolving credit agreement. Disruptions in the financial sector may increase our exposure to credit risk and adversely affect the ability of lenders to perform under the terms of their lending arrangements with us. Failure by our lenders to perform under the terms of our lending arrangements could cause us to incur additional costs that may adversely affect our liquidity, financial condition, and results of operations. There can be no assurance that future disruptions in the financial sector will not occuroccur, thatwhich could have adverse effects on our business. Additional information regarding our liquidity and related risks is included in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Liquidity and Capital Resources.”

Adverse federal legislative or regulatory changes—changes, or noncompliance with existing or future laws—laws, could result in enforcement actions or require the Company to modify, suspend, or cease part or all of its operations.

The decentralized nature of origination and servicing, including reliance on third parties, may increase the risk of inconsistent practices, reduced oversight, and misconduct—potentiallymisconduct, resultingwhich could result in monetary loss, legal liability, regulatory scrutiny, or reputational harm.

As part of our business, from time to time, we sell loans that are charged off. If we do not appropriately assess a debt buyer’s collection practices for compliance with laws and regulations, there is risk potential. Failure to appropriately select and manage debt buyers can lead to additional regulatory scrutiny, penalties and potentially limit our collection practices on certain debts. In addition, if we do not maintain and provide sufficient documentation of the loans sold, debt buyers may pursue collection without complete and accurate information, subjecting us to potential fines by regulators as well as repurchase risk from debt buyers.

We have experienced significant management transitions in the past six months, including the resignation of our former President and Chief Executive Officer, appointment of an interim President and Chief Executive Officer, retirement of our Executive Vice President and Chief Branch Operations Officer and appointment of a new Executive Vice President and Chief Operating Officer. There may be additional resignations and appointments in our senior management team in the future. Executive leadership transitions can be inherently difficult to manage and may cause disruption to our business. In addition, management transition inherently causes some loss of institutional knowledge, which can negatively affect strategy and execution, and our results of operations and financial condition could be negatively impacted as a result. The loss of services of one or more other members of senior management, or the inability to attract qualified permanent replacements, could have a material adverse effect on our business. If we fail to successfully attract and appoint permanent replacements with the appropriate expertise, we could experience increased employee turnover and harm to our business, results of operations, cash flow and financial condition. The search for permanent replacements could also result in significant recruiting and relocation costs.

The departure or replacement of key personnel—personnel, and challenges in attracting or retaining high-performing employees—may disrupt operations and negatively affect the Company’s business and financial results.

Changes in tax laws or regulations—regulations, or adverse interpretations or rulings by tax authorities—authorities, may increase the Company’s tax burden or negatively impact financial condition and operating results.

We are required to maintain disclosure controls and procedures and internal control over financial reporting. Section 404(a) of the Sarbanes Oxley Act requires us to include in our annual reports on Form 10-K an assessment by management of the effectiveness of our internal control over financial reporting. Section 404(b) of the Sarbanes Oxley Act requires us to engage our independent registered public accounting firm to attest to the effectiveness of our internal control over financial reporting. We expect to incur significant expenses and to devote resources to Section 404 compliance on an ongoing basis. It is difficult for us to predict how long it will take or how costly it will be to complete the assessment of the effectiveness of our internal control over financial reporting for each year and to remediate any deficiencies in our internal control over financial reporting.

If we identify a material weakness in our controls and procedures, our ability to record, process, summarize, and report financial information accurately and within the time periods specified in the rules and forms of the SEC could be adversely affected. In addition, remediation of a material weakness would require our management to devote significant time and incur significant expense. A material weakness is a deficiency, or a combination of deficiencies, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. If we are unable to maintain effective controls and proceduresprocedures, we could lose investor confidence in the accuracy and completeness of our financial reports, and we may be subject to investigation or sanctions by the SEC. Any such consequence or other negative effect could adversely affect our operations, financial condition, and the trading price of our common stock.

The absence or reduction of dividend payments may decrease the Company’s attractiveness to income-focused investors and impact shareholder sentiment.

The Company’s common stock price has been and is likely to continue to be subject to significant volatility. Securities markets worldwide experience significant price and volume fluctuations. This market volatility, as well as general economic, market, or political conditions,conditions or the geopolitical environment, including the ongoing conflict in Iran and the Russia-Ukraine War, could reduce the market price of shares of our common stock in spite of our operating performance. Additionally, a variety of factors could cause the price of the common stock to fluctuate, perhaps substantially, including:including, general market fluctuations resulting from factors not directly related to the Company’s operations or the inherent value of its common stock; state or federal legislative or regulatory proposals, initiatives, actions or changes that are, or are perceived to be, adverse to our operations or the broader consumer finance industry in general; announcements of developments related to our business; fluctuations in our operating results and the provision for credit losses; low trading volume in our common stock; decreased availability of our common stock resulting from stock repurchases and concentrations of ownership by large or institutional investors; general conditions in the financial service industry; developments in domestic or international tariffs or trade agreements, disruption to the domestic financial services industry, the domestic or global economy, including inflationary pressures, or the domestic or global credit or capital markets; changes in financial estimates by securities analysts; our failure to meet the expectations of securities analysts or investors; negative commentary regarding our Company and corresponding short-selling market behavior; adverse developments in our relationships with our customers; investigations or legal proceedings brought against the Company or its officers; or significant changes in our senior management team.

New accounting rules or regulations, changes to existing accounting rules or regulations, and changing interpretations of existing rules and regulations have been issued or occurred and may continue to be issued or occur in the future. Our methodology for valuing our receivablesloans receivable and otherwise accounting for our business is subject to change depending upon the changes in, and interpretation of, accounting rules, regulations, or interpretations. Any such changes to accounting rules, regulations, or interpretations could negatively affect our reported results of operations and could negatively affect our financial condition through increased cost of compliance.

We are required to use certain assumptions and estimates in preparing our financial statements under GAAP, including determining allowances for credit losses, the fair value of financial instruments, asset impairment, reserves related to litigation and other legal matters, the fair value of share-based compensation, valuation of income,income and other taxestaxes, and regulatory exposures. In addition, significant assumptions and estimates are involved in determining certain disclosures required under GAAP, including those involving the fair value of our financial instruments. If the assumptions or estimates underlying our financial statements are incorrect, the actual amounts realized on transactions and balances subject to those estimates will be different, and this could have a material adverse effect on our results of operations and financial condition.

Except in certain circumstances, we are not restricted from issuing additional shares of common stock, including any securities that are convertible into or exchangeable for, or that represent the right to receive, common stock. The market price of shares of our common stock could decline as a result of sales of a large number of shares of common stock in the market or the perception that such sales could occur. We intend to continue to evaluate acquisition opportunities and may issue shares of common stock in connection with these acquisitions. Any shares of common stock issued in connection with acquisitions, the exercise of outstanding stock options, or otherwiseotherwise, would dilute the percentage ownership held by our existing shareholders.

The Company's financial performance continues to be dependent in large part upon the growth in its outstanding loans receivable, the maintenance of loan quality and acceptable levels of operating expenses. Since March 31, 2021,2022, gross loans receivable have increaseddecreased at a 2.63%4.27% annual compounded rate from $1.10$1.52 billion to $1.23$1.28 billion at March 31, 2025.2026. We believe we werecan ablecontinue to improve our gross loans receivable growth rates through acquisitions, improved marketing processes, and analytics. The Company plans to enter into new markets through opening new branches and acquisitions as opportunities arise.

(1) Average gross loans receivable have been determined by averaging month-end gross loans receivable over the indicated period, excluding tax advances.period.

(3) Average net loans receivable have been determined by averaging month-end gross loans receivable less unearned interest and deferred fees over the indicated period, excluding tax advances.period.

On October 5, 2017, the CFPB issued a final rule (the "Rule") imposing limitations on (i) short-term consumer loans, (ii) longer-term consumer installment loans with balloon payments, and (iii) higher-rate consumer installment loans repayable by a payment authorization. The Rule originally required lenders originating short-term loans and longer-term balloon payment loans to evaluate whether each consumer has the ability to repay the loan along with current obligations and expenses (“ability to repay requirementsrequirement”); however, the ability to repay requirementsrequirement was rescinded in July 2020. The Rule also curtails repeated unsuccessful attempts to debit consumers’ accounts for short-term loans, balloon payment loans, and installment loans that involve a payment authorization and an annual percentage rate over 36% (“payment requirements”). Implementation of the Rule’s payment requirements may require changes to the Company’s practices and procedures for such loans, which could materially and adversely affect the Company’s ability to make such loans, the cost of making such loans, the Company’s ability to, or frequency with which it could, refinance any such loans, and the profitability of such loans.

Critical Accounting Policies and Estimates

The Company’s accounting and reporting policies are in accordance with GAAP and conform to general practices within the finance company industry. The significant accounting policies used in the preparation of the Consolidated Financial Statements are discussed in Note 1 to the Consolidated Financial Statements. Certain critical accounting policies involve significant judgment by the Company’s management, including the use of estimates and assumptions which affect the reported amounts of assets, liabilities, revenues, and expenses. As a result, changes in these estimates and assumptions could significantly affect the Company’s financial position and results of operations. The Company considers its policies regarding the allowance for credit losses, share-based compensation,losses and income taxes to be its most critical accounting policies due to the significant degree of management judgment involved.

Accounting policies related to the allowance for credit losses are considered to be critical as these policies involve considerable subjective judgementjudgment and estimation by management. In the case of loans, the allowance for credit losses is a contra-asset valuation account, calculated in accordance with ASC 326 that is deducted from the amortized cost basis of loans to present the net amount expected to be collected. The amount of the allowance account represents management’s best estimate of current expected credit losses on these financial instruments considering available information, from internal and external sources, relevant to assessing exposure to credit loss over the contractual term of the instrument. Relevant available information includes historical credit loss experience, current conditions, and reasonable and supportable forecasts. The historical credit loss experience is adjusted for quantitative and qualitative factors that are not fully reflected in the historical data. In determining our estimate of expected credit losses, we evaluate information related to credit metrics, changes in our lending strategies and underwriting practices, and the current and forecasted direction of the economic and business environment. These metrics include, but are not limited to, trends in first pay success for NBs, 61-90 day delinquencies on a recency basis, percent of loan balances that are paying, percentage of gross loans that are acquired loan, portfolio composition, and observable changes in recent or expected economic trends and conditions.

No assurance can be given that either the tax returns submitted by management or the income tax reported on the Consolidated Financial Statements will not be adjusted by either adverse rulings, changes in the tax code, or assessments made by the IRS or by state or foreign taxing authorities. The Company is subject to potential adverse adjustments including, but not limited to:to, an increase in the statutory federal or state income tax rates, the permanent non-deductibility of amounts currently considered deductible either now or in future periods, and the dependency on the generation of future taxable income in order to ultimately realize deferred income tax assets.

The Company has historically financed and continues to finance its operations, acquisitions and branch expansion through a combination of cash flows from operations and borrowings from its institutional lenders. As discussed below, the Company has also issued debt securities to finance its operations and repay a portion of its outstanding indebtedness. The Company has generally applied its cash flows from operations to fund its loan volume, fund acquisitions, repay long-term indebtedness and repurchase its common stock. As the Company's gross loans receivable decreased from $1.52 billion at March 31, 2022 to $1.23 billion at March 31, 2025, netNet cash provided by operating activities for fiscal yearsyear 2025, 2024, and 20232026 was $254.2$259.4 million, $265.8 million, and $291.6 million, respectively.million.

Among the key factors that could cause our actual financial results, performance or condition to differ from the expectations expressed or implied in such forward-looking statements are the following: recently enacted, proposed or future legislation and the manner in which it is implemented, including pursuant to policies of the new U.S. administration; changes in the U.S. tax code; the nature and scope of regulatory authority, particularly discretionary authority, that is or may be exercised by regulators, including, but not limited to, the U.S. Consumer Financial Protection Bureau, and individual state regulators having jurisdiction over the Company; the unpredictable nature of regulatory examinations, proceedings and litigation; employee misconduct or misconduct by third parties; uncertainties associated with management turnover and the effective succession of senior managementmanagement, including the recent CEO transition and ongoing search for a permanent replacement; media and public characterization of consumer installment loans; labor unrest; the impact of changes in accounting rules and regulations, or their interpretation or application, which could materially and adversely affect the Company’s reported consolidated financial statements or necessitate material delays or changes in the issuance of the Company’s audited consolidated financial statements; the Company's assessment of its internal control over financial reporting; changes in interest rates; the impact of inflation and macroeconomic uncertainty; risks relating to the acquisition or sale of assets or businesses or other strategic initiatives, including increased loan delinquencies or net charge-offs, the loss of key personnel, integration or migration issues, the failure to achieve anticipated synergies, increased costs of servicing, incomplete records, and retention of customers; risks inherent in making loans, including repayment risks and value of collateral; cybersecurity threats or incidents, including the potential or actual misappropriation of assets or sensitive information, corruption of data or operational disruption and the costs of the associated response thereto; our dependence on debt and the potential impact of limitations in the Company’s credit facilities or other impacts on the Company's ability to borrow money on favorable terms, or at all; the timing and amount of revenues that may be recognized by the Company; changes in current revenue and expense trends (including trends affecting delinquency and charge-offs); the impact of extreme weather events and natural disasters; changes in the Company’s markets and general changes in the economy (particularly in the markets served by the Company).

_______________________________________________________ (1) Average gross loans receivable has been determined by averaging month-end gross loans receivable over the indicated period, excluding TALs.period.

(3) Average net loans receivable has been determined by averaging month-end gross loans receivable less unearned interest and deferred fees over the indicated period, excluding TALs.period.

Comparison of three months ended DecemberJune 31,30, 20252026 versus three months ended DecemberJune 31,30, 20242025

The $0.9$6.1 million net lossincome for the three months ended DecemberJune 31,30, 20252026 is a 106.8%285.4% decreaseincrease from net income of $13.4$1.6 million for the same period of the prior year. Operating income, which is revenue less provision for credit losses and general and administrative expenses, decreasedincreased by $15.5$7.4 million, or 56.9%,62.4%, compared to the same period of the prior year. Our results of operations were negatively impacted by an increase in provision for credit losses, largely related to our new loan growth;

Revenues for the three months ended DecemberJune 31,30, 20252026 increased by $2.6$6.4 million, or 1.9%,4.8%, to $141.3$139.2 million from $138.6$132.8 million for the same period of the prior year. Interest and fee income for the three months ended DecemberJune 31,30, 20252026 increased by $3.6$6.2 million, or 2.9%,5.4%, from the same period of the prior year due to an increase in outstanding balances and interest yields.

Insurance commissions and other income for the ninethree months ended DecemberJune 31,30, 20252026 decreasedincreased by $4.2$0.2 million, or 8.0%,1.3%, from the same period of the prior year. Insurance commissionsincome decreasedremained byessentially approximatelyunchanged $1.8at $11.3 million in the first quarter of fiscal 2027 compared to $11.5 million in the first quarter of fiscal 2026. Other income increased $0.5 million, or 4.9%,7.7%, duringto $6.4 million in the ninefirst monthsquarter endedof Decemberfiscal 31, 2025 when2027, compared to the$5.9 ninemillion months ended December 31, 2024. Other income decreased by $2.3 million, or 16.2%, duringin the ninefirst monthsquarter endedof Decemberfiscal 31, 2025 when compared to the nine months ended December 31, 2024.2026.

The provision for credit losses increaseddecreased $15.6$6.7 million, or 11.4%,13.4%, to $151.8$43.8 million from $136.2$50.5 million when comparing the first three quartersquarter of fiscal 20262027 to the first three quarters of fiscal 2025. Net charge-offs as a percentage of average net loans receivable on an annualized basis increased from 17.1% in the first three quarters of fiscal 2025 to 18.4% in the first three quartersquarter of fiscal 2026. The table below itemizes the key components of the CECL allowance and provision impact during the quarter.

G&A expenses for the ninethree months ended DecemberJune 31,30, 20252026 increased by $45.4$5.8 million, or 25.9%,8.2%, from the corresponding period of the previous year. As a percentage of revenues, G&A expenses increased from 43.8%53.0% during the first ninethree months ofended fiscalJune 30, 2025 to 54.0%54.7% during the first ninethree months ofended fiscalJune 30, 2026. G&A expenses per average open branch increased by 29.4%9.4% when comparing the two nine-monththree-month periods. G&A expenses were negatively impacted during the current quarter by $4.6 million in CEO transition related expense. The change in G&A expense is explained in greater detail below.

Personnel expense totaled $145.1$50.8 million for the ninethree months ended DecemberJune 31,30, 2025,2026, a $45.3$5.1 million, or 45.4%,11.1%, increase over the ninethree months ended DecemberJune 31,30, 2024.2025. Salary expense increased approximately $5.5$2.5 million, or 5.9%,7.8%, when comparingduring the two nine month periodsquarter ended DecemberJune 31,30, 20252026, andcompared 2024.to the quarter ended June 30, 2025. Severance related costs increased salary expense by $2.1 million in the first quarter of fiscal 2027 compared to the first quarter of fiscal 2026. Our headcount as of DecemberJune 31,30, 20252026 increasedremained 10.2%relatively flat compared to DecemberJune 31,30, 2024. The increase is the result of annual salary increases and increased headcount in the field to further improve branch level performance.2025. Benefit expense increased approximately $2.3$1.0 million, or 10.0%,10.6%, when comparing the nine monthquarterly periods ended DecemberJune 31,30, 20252026 and 2024.2025. Incentive expense increased $38.0$3.3 million when comparingin the ninefirst monthquarter periodsof endedfiscal December2027 31,compared 2025to andthe 2024.first quarter of fiscal 2026. The increase in incentive expense is primarily due to a $33.2$2.0 million increase in shareCEO based compensationtransition expense. Share based compensation expense increased due to share grants in December of 2024 and June of 2025, and because the prior year period included a $18.5 million reversal of share based compensation expense associated with the forfeiture of the shares granted in the second tranche of our performance-based share plan.

OtherOccupancy and equipment expense totaled $28.6$12.0 million for the ninethree months ended DecemberJune 31,30, 2025,2026, a $2.1$0.2 million, or 7.8%,2.1%, increase over the ninethree months ended DecemberJune 31,30, 2024.2025.

Interest expense for the ninethree months ended DecemberJune 31,30, 20252026 increased by $5.2$1.8 million, or 16.6%,18.6%, from the corresponding ninethree months of the previous year. Interest expense primarily increased due to a $3.0 million early call penalty on our long-term notes, and a $0.7 million write-off of the remaining unamortized debt issuance costs during the second quarter of fiscal 2026. Additionally, there was a 4.7%27.6% increase in the average debt outstanding,outstanding fromfor $508.5the million to $532.7 million. The increase in interest expense wasquarter, partially offset by a 3.4%6.4% decrease in the effective interest rate from 8.5%8.3% to 8.2%.7.8%. The average debt outstanding increased from $456.2 million to $582.3 million when comparing the quarters ended June 30, 2025 and 2026. The Company’s debt-to-equity ratio increased from 1.1:1 at June 30, 2025 to 1.6:1 at June 30, 2026.

Other key return ratios for the first ninethree months ofended fiscalJune 30, 2026 included a 4.0%3.6% return on average assets and a return on average equity of 10.6% (both on a trailing 12-month basis), as compared to a 7.5%7.8% return on average assets and a return on average equity of 19.2%19.1% (both on a trailing 12-month basis) for the first ninethree months ofended fiscalJune 30, 2025.

The Company’s effective income tax rate was a negative 100.8%22.7% for the ninethree months ended DecemberJune 31,30, 20252026 compared to 20.1%30.2% for the corresponding period of the previous year. The Companydecrease finalizedwas the result of a settlement with various taxing authorities that resulted in an increase in the reserve under ASC 740-10740 (unrecognized tax positions) which iswas treated as a discrete item in the currentprior period,year alongquarter. withThis awas decreasepartially inoffset pretax book income relative to the effects of various permanent items includingby an increase in disallowed executive compensation under Section 162(m) in the current period. This was partially offset by the permanent tax benefit related to nonqualified stock option exercises and vesting of restricted stock treated as discrete items in the current period.quarter.

The Company has historically financed and continues to finance its operations, acquisitions and branch expansion primarily through a combination of cash flows from operations and borrowings from its institutional lenders. As discussed below, the Company has also issued debt securities to finance its operations and repay a portion of its outstanding indebtedness. The Company has generally applied its cash flows from operations to fund its loan volume, fund acquisitions, repay long-term indebtedness, and repurchase its common stock. Net cash provided by operating activities for the ninethree months ended DecemberJune 31,30, 20252026 was $164.8$64.4 million.

As of DecemberJune 31,30, 2025,2026, the Company's debt outstanding was $677.2$572.8 million and its shareholders' equity was $351.6$362.2 million resulting in a debt-to-equity ratio of 1.91.6:1.0. Management will continue to monitor the Company's debt-to-equity ratio and is committed to maintaining a debt level that will allow the Company to continue to execute its business objectives, while not putting undue stress on its consolidated balance sheet.

As of DecemberJune 31,30, 2025,2026, the Company had two credit facilities: the Revolving Credit Facility and the Warehouse Facility. The Revolving Credit Facility provides, among other things, aggregate commitments of the Lenders of $640.0$655.0 million, with an accordion feature that can increase the aggregate commitments by $150.0$135.0 million (for a total commitment, if the full accordion is borrowed, of $790.0 million).

Subject to a borrowing base formula, the Company could borrow at the rate of one month SOFR plus 0.10% and an applicable margin of 3.5% with a minimum rate of 4.5% under the Revolving Credit Agreement. At DecemberJune 31,30, 2025,2026, the aggregate commitments under the Revolving Credit Agreement were $640.0$655.0 million. The borrowing base limitation was equal to the product of (a) the Company’s eligible finance receivables, less unearned finance charges, insurance premiums and insurance commissions applicable to such eligible finance receivables, and (b) an advance rate percentage that ranges from 70% to 80% based on a collateral performance indicator equal to the sum of, for the Company and certain of its subsidiaries (a) a three-month rolling average rate of receivables at least sixty days past due and (b) an eight-month rolling average net charge-off rate. The Company had $789.7$816.1 thousand in outstanding standby letters of credit which include (i) $200.0 thousand related to worker's compensation expiring on October 16, 2026 and (ii) $589.7$616.1 thousand related to the Company's investment in captive insurance expiring on AprilMarch 12,01, 2026.2027. Both letters of credit automatically extend for one year on their expiration dates. Further, under the Revolving Credit Agreement, the administrative agent has the right to set aside reasonable reserves against the available borrowing base in such amounts as it may deem appropriate, including, without limitation, reserves with respect to certain regulatory events or any increased operational, legal, or regulatory risk of the Company and its subsidiaries.

For the ninethree months ended DecemberJune 31,30, 20252026 and fiscal year ended March 31, 2025,2026, the Company’s effective interest rate, including the commitment fee and amortization of debt issuance costs, as it relates to the Revolving Credit Agreement was 8.3%7.8% annualized and 9.5%,8.3%, respectively. At DecemberJune 31,30, 2025,2026, the unused amount available under the Revolving Credit Facility was $63.5$103.6 million. Borrowings under the Revolving Credit Facility have a maturity date of July 22, 2028.

The Warehouse Facility provides for a revolving $175.0 million warehouse facility and is secured by certain consumer loan receivables that were directly originated by certain of the Company’s subsidiaries. As of DecemberJune 31,30, 2025,2026, the Company may borrow at the rate of one-month SOFR plus 0.11448% and an applicable margin of 3.00%, with a minimum rate of 4.00%. The Credit Agreement has a commitment fee of 0.50% per annum on the unused portion of the commitment.

For the ninethree months ended DecemberJune 31,30, 2025,2026, the Company’s effective interest rate, including the commitment fee and amortization of debt issuance costs, as it relates to the Credit Agreement was 6.3%.7.9%. At DecemberJune 31,30, 2025,2026, the unused amount available under the Warehouse Facility was $73.5$69.8 million. Borrowings under the Warehouse Facility have an expected maturity date of September 29, 2027.

The Company continues to believe stock repurchases are a viable component of the Company’s long-term financial strategy and an excellent use of excess cash when the opportunity arises. Additional share repurchases can be made subject to compliance with, among other things, applicable restricted payment covenants under the Revolving Credit Agreement. Our first priority is to ensure we have enough capital to fund loan growth. As of DecemberJune 31,30, 2025,2026, subject to further approval from our Board of Directors, we could repurchase approximately $61.1$63.8 million of shares under the terms of our Revolving Credit Agreement. To the extent we have excess capital, we may repurchase stock, if appropriate and as authorized by our Board of Directors.

Revolving Credit Facility Debt Covenants

The Revolving Credit Agreement contains a number of affirmative and negative covenants that, among other things, restrict our ability to incur liens, incur indebtedness, pay dividends and repurchase or redeem capital stock, make certain restricted payments, merge or consolidate, dispose of assets, make acquisitions or other investments, redeem or prepay subordinated debt, amend subordinated debt documents, make changes in the nature of its business, and engage in transactions with affiliates. The agreement allows the Company to incur subordinated debt that matures after the termination date of the Revolving Credit Agreement and that contains specified subordinated terms, subject to limitations on amount imposed by the financial covenants under the Revolving Credit Agreement. In addition, the Revolving Credit Agreement requires the Company to (i) keep and maintain a Consolidated Net Worth of $325.0 million, (ii) have a ratio of Net Income Available for Fixed Charges to Fixed Charges of not less than 2.25 to 1.00, (iii) not permit the aggregate unpaid principal amount of Total Debt to exceed 225.0% of Consolidated Adjusted Net Worth, and (iv) maintain an Asset Quality Indicator (Consolidated) of less than or equal to 26.0%. Each of the capitalized terms used and not defined herein have the meanings set forth in the Revolving Credit Agreement.