World Acceptance Corp. F1Q10 (Qtr End 6/30/09) Earnings Call Transcript

Jul.29.09 | About: World Acceptance (WRLD)

World Acceptance Corp. (NASDAQ:WRLD)

F1Q10 (Qtr End 6/30/09) Earnings Call

July 29, 2009 10:00 am ET

Executives

Sandy McLean - Chairman and CEO

Mark Roland - President and Chief Operating Officer

Kelly Malson - Chief Financial Officer

Analysts

Rick Shane - Jefferies

John Rowan - Sidoti & Company

David Burtzlaff - Stephens Incorporated

Henry Coffey - Sterne Agee

Andrew Shapiro - Lawndale Capital Management

Bill Dezellem - Tieton Capital Management

Andrew Matthes - Matthes Capital Management

Operator

Good morning, and welcome to the World Acceptance Corporation’s sponsored first quarter press release conference call. At this time, all participants have been placed on listen-only mode. A question and answer session will follow the presentations by the Corporation’s CEO and its officers.

Before we begin, the Corporation has requested that I make the following announcement. The comments made during this conference may contain forward-looking statements within the meaning of Section 27A of the Securities and Exchange Act 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.

Factors that could cause actual results or performance to differ from the expectations expressed or implied in such forward-looking statements include changes in the timing, amount of revenues that may be recognized by the Corporation, changes in current revenue and expense trends, changes in the Corporation’s markets and changes in the economy. Such factors are discussed in greater detail in the Corporation’s filings with the Securities and Exchange Commission.

At this time, it’s my pleasure to turn the floor over to your host, Sandy McLean, Chairman and CEO.

Sandy McLean

Thank you, James, and welcome to the World Acceptance Corporation first quarter conference call. As he said, I’m Sandy McLean, the company’s Chairman and CEO. With me is, Mark Roland, our President and Chief Operating Officer; Kelly Malson, our Chief Financial Officer; and other members of our management team. I’ll spend just a few minutes reviewing the quarter results and then we will be happy to answer any questions.

I am once again very pleased with the quarterly financial performance, especially considering the ongoing economic difficulties that the country faces. We have seen an increase in demand for our loan products during the quarter, and as we’ve previously indicated have experienced some improvement in our loan losses.

Net income for the first quarter was $14.6 million or $0.90 per diluted share, compared to 11.3 million or $0.68 per diluted share for the first quarter of fiscal 2009. This represents a 29% increase in net income and a 33.4% increase in net income per diluted share when comparing the two quarterly periods.

In accordance with FASB Staff Position APB 2 Accounting for Convertible Debt Instruments, the prior results have been restated to reflect an increase in interest expense and a reduction in income tax. The impact of this restatement on the first quarter of last year amounted to a decrease of 709,000 in net income or $0.04 per diluted share, and the impact of this accounting change during the current quarter amounted to a decrease of 642,000 in net earnings or $0.04 per diluted share.

Additionally, our current quarterly results benefited from a $2.4 million pre-tax gain from the early repayment of $10 million face amount of our convertible bonds. This resulted in an increase of 1.5 million in net earnings or $0.09 per diluted share during the current quarter.

Gross loans amounted to 726 million at June the 30, 2009, a 14.8% increase over the 632.7 million outstanding at June the 30, 2008, and 18.2% increase since the beginning of the fiscal year. The increase in loan demand is reflected in a 20.8% increase in loans to new borrowers when comparing the two quarterly periods. Additionally, this growth was fairly evenly distributed throughout the company with nine of our 11 states experiencing at least 8% growth and seven of the 11 states exceeding a 12% growth rate.

While acquisitions continue to be an important factor in our overall growth strategy, the company did not make any significant purchases during the first fiscal quarter. One small office consisting of 358 accounts and 537,000 gross loans was purchased, which was merged into an existing office. For comparison purposes, during the first quarter of fiscal 2009, the company acquired 4,375 accounts and 7.1 million in gross loan balances in 11 separate offices. Of the 11 offices, seven remained open and four were consolidated into existing locations.

As we plan - as planned, we continued the expansion of our branch network during the first fiscal quarter at a much more moderate rate. We began fiscal 2010 with 944 offices and opened five giving us a total of 949 offices at June the 30, 2009. Our plans for fiscal 2010 are to open 30 offices in U.S. and 15 in Mexico, plus evaluate any acquisitions as opportunities may arise.

Total revenue for the quarter amounted to 100.2 million, which is a 13.4% increase over the 88.4 million during the first quarter of the prior fiscal year. This corresponds to a 13.4% increase in average net loans when comparing the two quarterly periods. Revenues from the 835 offices opened throughout both quarterly periods increased by 8.7%. Delinquencies and charge-offs showed signs of improvement during the first quarter in spite of the ongoing difficult economic environment. Accounts that were 61 days or more past due decreased slightly from 2.9% to 2.8% on a recency basis and remained flat at 4% on a contractual basis when comparing the two quarter-end statistics.

Net charge-offs as a percentage of average net loans decreased from 14.5% on an annualized basis during the prior-year quarter to 13.8% annualized during the most recent quarter. The 13.8% is more in line with historical charge-off ratios for the first fiscal quarter. For instance, charge-off ratios were 13.9% in June of ‘05, 13.4% in June of ‘03 and 13.5% in June of ‘02.

General and administrative expenses amounted to 53.3 million in the first fiscal quarter, a 9.3% increase over the 48.8 million in the same quarter of the prior fiscal year. As a percentage of revenues, our G&A decreased from 55.2% during the first quarter of fiscal 2009 to 53.2% during the current quarter. Our G&A per average open office decreased by 1.5% when comparing the two fiscal quarters.

Highlights of our expansion into Mexico include the following. 63 offices were opened at June the 30, 2009. No offices were opened during the current quarter. We may have approximately 66,000 accounts and approximately 26.1 million in gross loans outstanding. This represents a 74.3% increase in accounts and a 39.4% increase in ledger over the trailing 12 months. We had net charge-offs of approximately 477,000 during the quarter or 12.5% of average net loans on an annualized basis and 61-day delinquencies of 3.3% and 4.1% on a recency and contractual basis respectively.

We lost approximately 211,000 during the first quarter, which we feel is very good given the large number of new offices that have been opened during the last six months. Most of our mature offices are doing very well, and we expect this subsidiary to provide a positive contribution to our overall profits during the current year. The company’s annualized return on average assets of 10.8% and on average equity of 19.2% continue their excellent historical trends during the first quarter of the fiscal 2010.

As we have stated on many occasions, the primary risk factor facing our company is our regulatory and legislative nature. Historically, this risk has been primarily limited to the state level. But during the past year, it has become a concern at the federal as well. Currently, there are discussions in two states, Illinois and New Mexico, regarding possible changes to the specific laws under which we operate. At this time, there is no reason to believe that any proposed changes would result in our inability to operate profitably in those states. However, this is an ongoing challenge that we have successfully managed throughout our company’s history.

At the federal level, there are several proposed bills that are pending in both the House and Senate calling for national rate count. At the present time, there does not appear to be sufficient support for these bills to move them out of committee. Additionally, the proposed Consumer Financial Protection Agency could result in additional regulation on our and other financial service industries. However, as currently proposed, there is specific language in the bill that would prohibit such an agency from establishing national usury rates. Nonetheless, such an agency could impose other limitations on terms and product structure. It could have a negative impact on our ability to offer our products to the borrowers that need and deserve them.

We will continue to work closely with our trade organizations, the American Financial Services Association and the National Installment Lenders Association to promote our industry and to educate legislators to the consequences of such legislation, primarily the elimination of available credit to large segments of population that does not have access to more traditional bonds or credit.

At this time, any of us will be more than happy to answer any of your questions.

Question-and-Answer Session

Operator

Thank you. (Operator Instructions) We’ll take our first question today from Rick Shane with Jefferies.

Rick Shane - Jefferies

Hi, guys. Thanks for taking my questions. A couple of different things here. What was on absolute dollar basis the growth loss number for the quarter and the recoveries if you have it please?

Sandy McLean

The net charge-offs were 17.77 million of which recoveries were 1.9 million.

Rick Shane - Jefferies

Okay, perfect. What percentage of the loan volume for the quarter was renewals and refinances?

Sandy McLean

Combined renewals were 76.7%.

Rick Shane - Jefferies

Okay. Just help us understand, I mean credit was very good. It contravenes the trend that we’ve basically seen for any other consumer finance company out there at this point. You have a big enough sample size in terms of your portfolio that it’s hard to imagine that your customer base is that different from what’s going on nationally. How do you - when you look at this and sort of say, okay, great, we had a wonderful quarter in terms of credit, especially almost an extraordinary quarter in the context of everybody else, what do you think you guys are doing that’s creating this differential?

Sandy McLean

Let me begin by saying, our customer base is not generally the same as what you’ve been seeing overall from a national standpoint, meaning credit cards and mortgage loans and so forth. Ours is kind of a specialized customer base that has difficulties all the time, but I don’t know, Mark, if you have something too, what’s...

Mark Roland

Maybe just a little bit. I mean we did slow down a little bit on our office expansion, which has given us the opportunity at the supervisory level to take a look at some of those branches that had struggled a bit with delinquencies and charge-offs over the past several months. I mean if you look at individual branches, you see a wide disparity between the best and the worst. When we have additional time to focus on those offices that have been struggling, those results are apparent. The other thing is I think we’ve mentioned before, when you see the trend in the general fuel cost and related cost of energy, that dropped down significantly in the January, February, March, April timeframe. I mean over time that being a significant portion of our customers’ monthly budget, that helps. We’ve seen fuel prices trending back up recently, but I don’t know how far they’ll go. But I think a lot of it is management. A lot of it is the fact that our customers perhaps are less stressed by fuel and energy prices. That’s about what we know about it.

Rick Shane - Jefferies

Got it. Did you see any impact on a year-over-year basis with the lack of tax stimulus checks?

Mark Roland

In terms of growth? I am trying to remember what we had last year in the same period. We had a $500 individual rebate.

Rick Shane - Jefferies

Yeah, I think it was even more than that. I won’t say it was 17 or 1,800 bucks a family.

Mark Roland

Right.

Rick Shane - Jefferies

I mean it’s - again, without stimulus checks this year, you would think that - I guess that explains the loan growth.

Mark Roland

Right. The other thing was the - this year, the only recipients of any federal assistance in that form I believe were the self security dependent individuals who did receive a $500 check, and that certainly is a portion of our portfolio mix.

Rick Shane - Jefferies

Okay. I’ve taken enough of your time. Thank you, guys.

Operator

We’ll take our next question from John Rowan with Sidoti & Company.

John Rowan - Sidoti & Company

Good morning. Maybe just first question for, I guess, Kelly. Where is the one-time gain on the extinguishment of debt and what was the gross before-tax number?

Kelly Malson

The gross on the extinguishment of debt was $2.4 million, and that’s included in other income.

John Rowan - Sidoti & Company

Okay. Now you guys restated the 2000 and - or fiscal ‘09 numbers. Do you have the revised interest expense for September through March?

Kelly Malson

John, I don’t have that with me. We are going to beef up or include some of those disclosures in the Q, which will be filed within - will be filed next week.

John Rowan - Sidoti & Company

Okay. Do you happen to have the fiscal 2009 number restated yet or you do not have that either?

Kelly Malson

For the year, it’s $0.16. So it’s roughly $0.04 a quarter.

John Rowan - Sidoti & Company

$0.16 or $0.04 per quarter, okay. Now, Sandy, I know you mentioned in your comments, can you just go over the guidance on store count again for the year?

Sandy McLean

On store count?

John Rowan - Sidoti & Company

Yes.

Sandy McLean

Yes, the intention is to open 30 offices in U.S. and 15 in Mexico.

John Rowan - Sidoti & Company

Okay.

Sandy McLean

Because that’s what we approved; that was our plan all along and also what we previously disclosed.

Kelly Malson

John, it’s Kelly.

John Rowan - Sidoti & Company

Yeah.

Kelly Malson

The $0.16 that I gave you was the change for the FY ‘08. For FY ‘09, it’s $0.26, because you also have to remember we bought back some of the debt in the third and fourth quarter, which is also going to have an impact. I apologize; I picked up the wrong year.

John Rowan - Sidoti & Company

No problem. But your - so your debt number was 369 for the year, and I take $0.26 off of that to get to a restated...

Kelly Malson

343.

John Rowan - Sidoti & Company

343, okay. Then also just again on credit, and I don’t want to spend too much time here, but the net charge-off for you was certainly below what I was looking for. Just can you give us an idea of how sustainable that is? I mean obviously we’ve seen the rate of growth and that charge-off rate come down quite a bit. How sustainable do you think it is for the rest of the year?

Sandy McLean

It’s very difficult to say. I think one impact - if you look at the - and Mark mentioned this just a minute ago. If you look at what happened to gas prices, which we think really does have an impact, they seemed to be drifting up over the last couple of months. If that continues, then certainly I don’t think that we’ll see continuing reductions like we did this quarter. But bar that, there is no reason to believe at this point in time that we shouldn’t be close to at least last year’s levels. But that’s as much as we can say at this point.

John Rowan - Sidoti & Company

Okay. Thank you very much.

Operator

Next we’ll hear from David Burtzlaff with Stephens Incorporated.

David Burtzlaff - Stephens Incorporated

Good morning, guys, a couple questions. Sandy, was the loan growth pretty even throughout the quarter, or how should we look at that, or was it more later in the quarter?

Sandy McLean

I don’t think - I mean I think it is fairly even throughout the quarter. We rose from a year-over-year growth rate of 12% to a year-over-year growth rate of about 14.8%, I believe. As we mentioned, there was no real acquisition. So, all three months were fairly good from a growth standpoint.

David Burtzlaff - Stephens Incorporated

Okay. Are you seeing the same trend so far in July?

Sandy McLean

I mean yeah. I mean that certainly is - it’s up, but it’s hard to say where it’s going to end out at any point. I don’t know whether this - I don’t know if we’re increasing our year-over-year growth rate or not while maintaining kind of where we are.

David Burtzlaff - Stephens Incorporated

Okay. All right. Then your advertising expense came in a little lower than where I was looking at and lower than last year. Are you just - is that just a timing issue or are you not advertising as much?

Kelly Malson

Actually, we’ve changed our advertising strategy slightly, and we’re being more focused on who we’re sending direct mail to. Because of that, we have been able to reduce our advertising costs.

David Burtzlaff - Stephens Incorporated

Okay. And, Kelly, what should we look at for the tax rate for the year?

Kelly Malson

Approximately 37.5%.

David Burtzlaff - Stephens Incorporated

Okay.

Kelly Malson

Give or take just a little bit.

David Burtzlaff - Stephens Incorporated

Okay. Thank you very much.

Operator

Next we’ll hear from Henry Coffey with Sterne Agee.

Henry Coffey - Sterne Agee

Yeah, good morning, everyone. Obviously a great quarter, so congratulations. When you look at some of the challenged branches that you’ve been working with, do they fall into any specific state and are you continuing - do you think you’ll continuing to - continue to see sort of progressive improvements there?

Mark Roland

No, they don’t fall into any - in a specific state. There just tend - it’s the 80-20 rule. Almost at any given time, 20% of the - or 80% of the problems are in 20% of the branches. As long as we’ve got the time and the manpower to focus on those, then I would hope that we would continue to see improvement. However, in our industry and industry in general, there is turnover in employees. As managers leave for whatever reason, new challenges are presented. So it’s not a cycle where you can just hit them all and be done. There is always a new one cropping up.

Henry Coffey - Sterne Agee

If I were to interpret your comments correctly, Sandy, your basic view is that charge-offs stay about where they were last year, or do we see continued improvement?

Sandy McLean

Well, at the end of the fiscal year, we said we thought for sure, we would definitely see a decrease in the increases on a year-over-year basis. As it turned out, we ended up with an actual decrease from the last, as you know, from 14.5 to 13.8%. We were extremely pleased. I’m not sure that kind of improvement can continue, but certainly it should not be so far out of the current range kind of where we are right now. But it’s really hard to tell, Henry.

Henry Coffey - Sterne Agee

I mean there is always the issue of renewals and delinquencies. I know it’s a relatively small part of the pie of, quote, delinquent loans that get renewed, but do you have those numbers?

Kelly Malson

I don’t have the exact number, Henry. It’s generally roughly about 2%.

Sandy McLean

But there certainly hadn’t been any change in policy or anything of that nature.

Henry Coffey - Sterne Agee

You were building reserves in the June quarter, do you think you’ll continue with that process as you grow the book of business, or is there an opportunity at some point as these charge-offs come down that you could actually release some reserves into earnings?

Sandy McLean

Well, we did not - well, you say we built reserves. On a percentage basis, it’s only a very minor difference from last quarter. It was primarily because of the increase in the portfolio. But we were hesitant to increase the allowance last year as the losses rose, because the model is still saying that they were getting kind of leveled again, but not quite to the point that we needed to do that. By the same token, this model works within a range, and I would - it would have to be substantial improvement before we would go and change our models and actually take a reduction to the percent of our allowance outstanding.

Henry Coffey - Sterne Agee

Thank you. Great quarter.

Sandy McLean

Thank you.

Operator

Andrew Shapiro with Lawndale Capital Management has our next question.

Andrew Shapiro - Lawndale Capital Management

Hi, good morning. Legislatively, you’ve been able to avoid the rate caps, it sounds alike. But given the high percentage of loans that are refinancing, two questions on this major portion of your business. On a loan that refinances based on the timing and the life of these refinanced loans and your Rule of 78 interest method, is the loan principal balance on these loans rising? That’s the first question. The second is, are either the interest rate method or the refinancing practices the target of prospective federal or state increased regulation or legislation?

Sandy McLean

I think we have to address the second one just to make sure I understand the question. But the first one, bear with me one second. Our average loan made this quarter was $1,060. The average loan made the same quarter of last year was $997. So these loans are not growing in size per se. I mean there is a slight growth in the average roll out - average loan made, but that’s pretty indicative of what’s taking place over a pretty long period of time.

I’ll try to answer your second question from the standpoint that the Rule of 78 approximates the interest method. I mean there is some slight - there is a slight increase in the amount that you recognize in the first two or three months, but it’s not a substantial difference because of the way the interest method works all together. So even if there was for some reason a change from the Rule of 78s to the interest method, I did not think it would have a dramatic impact on our overall financials. If there was a substantial difference, then - and if you look in our disclosures and so forth, we acknowledged that we recognize earnings on a - in a Rule of 78s cash basis, but it does approximate what you would get under the interest method. So even if they, for some reason some legislative body chose to disallow the Rule of 78s or whatnot and I think it certainly would not impact our ability to be profitable going forward. If that - I hope I tried to answer your question.

Andrew Shapiro - Lawndale Capital Management

You actually partially answered both. If I could just do a quick follow-up on each just to get a little bit more clarification.

Sandy McLean

Okay.

Andrew Shapiro - Lawndale Capital Management

Regarding the state or federal regulation legislation, so the Rule of 78s may or may not be targeted, but if it is it’s not a big deal. But with so much of your business refinancing prior loans, is that a practice that the feds or the states are looking at or wanting to increase regulation of?

Sandy McLean

It is certainly a topic of conversation especially in light of some of the discussions surrounding the payday lending industry where a person comes in and makes a loan and two weeks later pays certain fee and takes out another loan and that practice continues. During discussions with certain regulators and legislators in a couple of states, there has been suggestions to limit the number of re-financings, but generally speaking, in all of those conversations, the legislators recognize the benefit to the company in being able to re-access their available - these customers are able to benefit from their ability to re-access any available credit they may have. Generally the proposals being made are something that we can certainly live with on a very easy basis. So to come in and eliminate all renewals would certainly have a major impact on our company, but it would also have a tremendous impact on the availability of credit. So I don’t think anybody is heading in that direction.

Andrew Shapiro - Lawndale Capital Management

Okay. Then the partial answer or follow-up on question number one; you mentioned how the loan principal balance has risen but not - not a lot but about 10% or so maybe a little bit more. Is there a particularly larger increase in that overall average on your loans that refinance which you said are about three-fourths or so of your loans and net averages just kept down because the average initial loan on first time borrowing is so low that that’s keeping the average dumb? The more interested are concerned about the average loan balance of the refinancing debtor to understand whether the refinancing debtor is becoming a worse off in vicious cycle of debt where they become a lower quality credit as time passes by, meaning your loan balance, credit quality may be deteriorating and at a faster pace than maybe the reserve balances properly indicate?

Sandy McLean

Certainly, I mean, that’s something that has been suggested, but that’s certainly is not what our history indicate. To answer your question directly, our renewal customers generally get increases more than some others probably to answer that, yes, because after several loans either from a renewal or paying us out in full and coming back, they demonstrate their ability and willingness to pay and therefore we may be willing to increase our exposure to that given customer over time. But, if it’s a problem customer who’s making - he’s having difficulty making payments, we’re certainly not going to renew at a higher balance. If he didn’t have what we call equity in the loan, then we’re certainly not going to renew him at all, that’s against company policy, that’s just throwing good money after the bad. So -

Mark Roland

The vast majority of our refinances are for same term, same balance as the prior loan.

Andrew Shapiro - Lawndale Capital Management

Okay.

Mark Roland

Loans that are increased go through a complete credit reinvestigation, new application, new credit bureau, new analysis of pre-income, job and residence verification and so on. So straight refinances by definition, the balance is going to remain the same, loans increase just through a re-underwriting process.

Andrew Shapiro - Lawndale Capital Management

Okay, great. Thank you.

Operator

(Operator Instructions). We’ll hear from Bill Dezellem with Tieton Capital Management.

Bill Dezellem - Tieton Capital Management

Thank you. A couple of questions. First of all, circling back to the branches that are challenged on the credit front, does it tend to be that those branches with newer managers would be the ones with credit challenges, or is there another common thread that would fit that 20% of the branches that you think that Mark had mentioned?

Mark Roland

Yeah, I think there’s two common threads. One, certainly the under or less experienced managers have more difficulty in managing the whole process. It’s a skill that’s learned. But another problem is also an additional staffing in the branch. If we’ve got other turnover in the branch office with an empty seat in a 3.5 person office, then there’s going to be some level of suffering of the overall work process. So I think the common thread that you’d find is understaffing new staff and new manager, younger individuals that have not learned the total process of managing a World office.

Bill Dezellem - Tieton Capital Management

Thank you. That is helpful. Then, you had really highlighted last quarter and specifically in your - I don’t know if it was the Annual Report or 10-K, but that you thought your charge-offs were peaking. What was it that you saw at that time that gave you the confidence to state that and then clearly your assessment was accurate?

Sandy McLean

Well, it wasn’t accurate exactly I mean, it’s very, extremely difficult to quote accurate at this, but we did see trends from the standpoint of the number of accounts that one - what do we call a slope out, that’s one day or past due as far as the delinquencies at all categories and so forth. They did appear to be some improvement as of the end of the fiscal year and as we got into the very first part of this quarter that it lead - led us to believe that we would not see those ongoing type increases in our charge-offs. Anything to that, Mark?

Mark Roland

I mean that it’s relatively mathematic. I mean, accounts move from one stage of delinquency to the next from miss pay to potential 30 to 30 to 60 the charge-off and as you see reductions in those earlier levels of delinquency that trend tends to move forward. It’s not an exact science, but you do see a trend.

Bill Dezellem - Tieton Capital Management

That’s helpful. If we’ve interpreted your comments correctly on the call here today, you are seeing a stabilization of those trends.

Mark Roland

At least when you look at the last same quarter, quarter two, I think Sandy’s comment is correct that that you certainly wouldn’t expect to see an increase over that prior year quarter level.

Bill Dezellem - Tieton Capital Management

Right. Okay. May see an increase versus this quarter, but certainly nothing out of the - we’re almost normal.

Mark Roland

I think, historically, we do see an increase from Q1 to Q2. It’s not as noticeable as the Q2 to Q3 movement, but yeah, it does go up a little bit.

Bill Dezellem - Tieton Capital Management

That’s helpful. Then in the press release you mentioned that you are sensing that some of your customers other loan sources are now not available. I don’t mean to be facetious here, but clearly Bear Stearns and Lehman Brothers were not sources of capital for your customers. So, I’m essentially highlighting my ignorance here, what really are some of the other sources of capital that seemed to be limited or have gone away?

Mark Roland

Some of the other larger, more traditional consumer finance companies, if you think about the old days, the household finances and beneficials and those guys, those were absorbed into various entities over time, most recently the two I mentioned became HSBC. HSBC is one example of the 1,000 branch consumer finance branch network that closed its stores during the last or the - I think at the end of the somewhere in February or March in that range. They close them immediately, it wasn’t a gradual exit. In addition, some of our customers live in small towns with community banks and whatever that due to small loan financings, and I believe that the evidences that some of those entities are also pulling back on moderate size smaller consumer finance transactions not making credit available in those smaller towns. There are other examples of larger consumer finance companies that aren’t there anymore. I think, certainly, Citi and their network of consumer finance branches has pulled back significantly as well and they moved that entity into their bad bank or whatever they’re referring to it as their for sale asset pool.

Bill Dezellem - Tieton Capital Management

That is helpful. Then the loan growth being so strong in this quarter, I mean, I think, the December quarter you had 8% loan growth, last quarter, the March quarter I should say was up 13%, and then jumping up to 20% this quarter. Are you feeling that the lack of credit or the credit availability disappearing as you’ve just highlighted that that’s what what’s driving the loan growth that you are experiencing here in this quarter or --?

Mark Roland

I think, that’s some of it, but the other portion is that there’s, the consumer confidence level has increased. People that were not borrowing money for things like minor home repairs or whatever a small trip, a vacation things like that, we saw in this last quarter that they were more willing to come back and do those kinds of transactions with more confidence.

Sandy McLean

Plus, anytime you see a reduction in the charge-off ratios that inadvertently are as a result kind of adds to your - I mean it can’t add to your growth.

Bill Dezellem - Tieton Capital Management

That’s helpful. Thank you both.

Operator

Our next question will come from Andrew Matthes with Matthes Capital Management.

Andrew Matthes - Matthes Capital Management

Yeah, hi. Good morning, guys. One quick question; what was the gross loan volume during the quarter and what was it last year in the same quarter?

Sandy McLean

This year it was 553 million versus 460 million the prior year quarter.

Andrew Matthes - Matthes Capital Management

Okay. Thank you very much.

Sandy McLean

Okay.

Operator

(Operator Instructions).

Sandy McLean

There doesn’t appear to be any more questions. We certainly appreciate you all’s interest and participation in the call today. Thank you very much.

Operator

Thank you for your participation. Before concluding this morning’s teleconference, the Corporation has asked to again remind you that the comments made during this conference may contain certain forward-looking statements within the meaning of Section 27A of the Securities and Exchange Act that represents the Corporation’s expectations and beliefs concerning future events. Such forward-looking statements are about matters that are inherently subject to risks and uncertainties.

Factors that could cause actual results or performances to differ from the expectations expressed or implied in such forward-looking statements include changes in the timing, amount of revenues that may be recognized by the Corporation, changes in current revenue and expense trends, changes in the Corporation’s markets and changes in the economy. Such factors are discussed in greater detail in the Corporation’s filings with the Securities and Exchange Commission.

This concludes the World Acceptance Corporation quarterly teleconference.

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