World Acceptance Corporation

Good morning and welcome to the World Acceptance Corporation's first quarter 2024 earnings conference call. This call is being recorded. At this time, all participants have been placed on listen-only mode. Before we begin, the corporation has requested that I make the following announcement. The comments made during this conference call may contain certain forward-looking statements within the meaning of Section 21 of the Securities Exchange Act of 1934 that represent the corporation's expectations and beliefs concerning future events. Such forward-looking statements are about matters that are inherently subject to risks and uncertainties. Statements other than those of historical fact, as well as those identified by the words anticipate, estimate, intend, plan, expect, believe, may, will, and should, or any variation of the foregoing and similar expressions, are forward-looking statements. Additional information regarding forward-looking statements and any factors that could cause actual results or performance to differ from the expectations expressed or implied in such forward-looking statements are included in the paragraph discussing forward-looking statements in today's earning press release. And in the risk factors section of the corporation's most recent Form 10-K for the fiscal year ended March 31, 2023. and subsequent reports filed with or furnished to the SEC from time to time. The corporation does not undertake any obligation to update any forward-looking statements it makes. At this time, it is my pleasure to turn the floor over to your host, Chad Prashad, President and Chief Executive Officer. Please go ahead.

Good morning, and thank you for joining our fiscal 2024 first quarter earnings call. Before we open it up to questions, there are a few areas that I'd like to highlight. Last year, we instituted a number of adjustments that we believe would have a significant impact on our business and have been quite pleased with the results. As we discussed during prior earnings calls, we tightened underwriting about a year and a half ago as economic uncertainty and inflation concerns were increasing. We have weathered a period of delinquency normalization after a period of extraordinary portfolio growth, as well as higher than expected delinquency and losses throughout most of our last fiscal year. Today, we continue to see lower and normalizing delinquency rates in our portfolio, as well as increasing yields, and expect this trend to continue for several more months. This is primarily due to many operations adjustments, including a heightened focus on credit quality and yields, as we previously discussed. We're also very cautiously increasing approval rates to new customers, as we still see the potential of this uncertain economic environment to impact our customers in the coming year. During the first quarter, Our customer base grew more than the prior three years, both in nominal and relative terms. New loan originations by number increased dramatically over the prior quarter by 47%, and are returning to a normal rate as a percentage of the customer base. Returned customer originations also increased dramatically, around 76% over the previous quarter, and exceeded the first quarter of last year as well. thanks to an increased focus by our marketing and operations teams. All of these outcomes are an especially great team accomplishment when we consider the reports of increasing delinquency rates across several credit industries during both the calendar year of 2022 as well as the first half of 2023. While economic uncertainty still exists, management continues to accrue for long-term incentive plan with vesting tiers of $16.35, $20.45, and $25.30 per share due to much improved credit quality, yields, and operating conditions. We anticipate the first-tier vesting as early as the end of this fiscal year, assuming credit quality and performance remain stable and unemployment remains low. We're pleased to begin our fiscal year 2024 from a position of portfolio and capital strength. At this time, Johnny Camise, our Chief Financial and Strategy Officer, and I would like to open up to any questions you have.

We will now begin the question and answer session. To ask a question, you may press star then one on your touch tone phone. If you're using a speaker phone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question comes from John Rowan of Jani. Go ahead.