World Acceptance (US:WRLD)2022-01-25 16:44Financial Data and Key Metrics Changes - The overall portfolio grew by $211 million, or 15.1% during the quarter, and $340 million, or 27% year-over-year, marking the largest single growth quarter on record [7][8] - Delinquency rates remain low and within expectations, with a shift to CECL provisioning expected to positively impact revenue and income in future quarters [8][9] Business Line Data and Key Metrics Changes - The company experienced broad expansion across all customer types, with significant increases in new and returning customer loan volume compared to last year and pre-pandemic levels [8] Market Data and Key Metrics Changes - Over 43% of the portfolio is below 36% APR, and 56% is below 54% APR, indicating the company's ability to offer attractive loan terms to retain customers [11] Company Strategy and Development Direction - The company aims to continue portfolio growth while reducing servicing costs, moving towards a fixed cost model [31][32] - The focus is on retaining high-quality customers and monitoring credit quality to manage expected losses and provisions effectively [32] Management's Comments on Operating Environment and Future Outlook - Management noted that the rapid growth in the portfolio is due to recovering demand post-pandemic, with expectations for continued growth but not necessarily at the same accelerated rate [20][21] - The company anticipates hitting its long-term EPS target before the end of fiscal year 2025 [10][32] Other Important Information - The tax rate was low due to windfall tax benefits from stock option exercises, with expectations of a normal tax rate between 21% and 23% going forward [27] Q&A Session Summary Question: Clarification on provisioning and net income - Management explained that the rapid growth in the portfolio has led to increased provisioning, which will ease as growth decelerates [19][21] Question: Charge-offs and portfolio composition - It was noted that larger loans typically have lower charge-off rates compared to smaller loans, and the current portfolio has seen record growth with a significant increase in new customers [25][26] Question: Tax rate and future expectations - The low tax rate was attributed to windfall benefits, with a normal rate expected in the future [27] Question: Medium-term loan growth and credit expectations - Management reiterated expectations for continued growth, with a focus on customer retention and credit quality monitoring [32][39] Question: Funding costs and future expectations - The increase in funding costs was linked to recent bond issuances and the growth in buybacks, with expectations for some natural deleveraging in the upcoming quarter [41][46]