Edgar Filing: WORLD ACCEPTANCE CORP

Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

__________________________________

Form 10-Q

__________________________________

(Mark One)



x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2018



¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT of 1934

For the transition period from ______________ to ______________

Commission File Number: 000-19599

WORLD ACCEPTANCE CORPORATION

(Exact name of registrant as specified in its charter.)



South Carolina		57-0425114
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

108 Frederick Street

Greenville, South Carolina 29607

(Address of principal executive offices)

(Zip Code)

(864) 298-9800

(registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for shorter period than the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.



	Large Accelerated filer o	Accelerated filer x

	Non-accelerated filer o	Smaller reporting company o

		Emerging growth company o

If an emerging growth company, indicate by check mark if registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨No x

The number of outstanding shares of the issuer’s no par value common stock as of January 31, 2019 was 9,622,849.

WORLD ACCEPTANCE CORPORATION

FORM 10-Q

TABLE OF CONTENTS



Item No.	Contents	Page
	GLOSSARY OF DEFINED TERMS	4

	PART I - FINANCIAL INFORMATION
1.	Consolidated Financial Statements (unaudited):	5
	Consolidated Balance Sheets as of December 31, 2018 and March 31, 2018	5
	Consolidated Statements of Operations for the three and nine months ended December 31, 2018 and December 31, 2017	6
	Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended December 31, 2018 and December 31, 2017	8
	Consolidated Statements of Shareholders' Equity for the three and nine months ended December 31, 2018 and December 31, 2017	9
	Consolidated Statements of Cash Flows for the nine months ended December 31, 2018 and December 31, 2017	11
	Notes to Consolidated Financial Statements	13
2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	28
3.	Quantitative and Qualitative Disclosures about Market Risk	38
4.	Controls and Procedures	38

	PART II - OTHER INFORMATION
1.	Legal Proceedings	39
1A.	Risk Factors	39
2.	Unregistered Sales of Equity Securities and Use of Proceeds	39
3.	Defaults Upon Senior Securities	39
4.	Mine Safety Disclosures	39
5.	Other Information	39
6.	Exhibits	40

	EXHIBIT INDEX	40

	SIGNATURES	42

Introductory Note: As used herein, the "Company," "we," "our," "us," or similar formulations include World Acceptance Corporation and each of its subsidiaries, unless otherwise expressly noted or the context otherwise requires that it include only World Acceptance Corporation. All references in this report to "fiscal 2019" are to the Company’s fiscal year ending March 31, 2019; all references in this report to "fiscal 2018" are to the Company's fiscal year ended March 31, 2018; and all references to "fiscal 2017" are to the Company’s fiscal year ended March 31, 2017.

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GLOSSARY OF DEFINED TERMS

The following terms may be used throughout this Report, including consolidated financial statements and related notes.



Term	Definition
ASU	Accounting Standards Update
CEO	Chief Executive Officer
CFO	Chief Financial Officer
CFPB	U.S. Consumer Financial Protection Bureau
Compensation Committee	Compensation and Stock Option Committee
DOJ	U.S. Department of Justice
Exchange Act	Securities Exchange Act of 1934, as amended
FASB	Financial Accounting Standards Board
FCPA	U.S. Foreign Corrupt Practices Act of 1977, as amended
G&A	General and administrative
GAAP	U.S. generally accepted accounting principles
IRS	U.S. Internal Revenue Service
LIBOR	London Interbank Offered Rate
Option Measurement Period	The 6.5 year performance period beginning on September 30, 2018 and ending on March 31, 2025 over which the Performance Options are eligible to vest, following certification by the Compensation Committee of achievement
Purchasers	Jointly, Astro Wealth S.A. de C.V. and Astro Assets S.A. de C.V.
Performance Share Measurement Period	The 6.5 year performance period beginning on September 30, 2018 and ending on March 31, 2025 over which the Performance Shares are eligible to vest, following certification by the Compensation Committee of achievement
Performance Options	Performance-based stock options
Performance Shares	Service- and performance-based restricted stock awards
Restricted Stock	Service-based restricted stock awards
SEC	U.S. Securities and Exchange Commission
Sellers	Collectively, World Acceptance Corporation, WFC Services Inc., and WAC Mexico Holdings LLC
Service Options	Service-based stock options
SWAC	Servicios World Acceptance Corporation de México, S. de R.L. de C.V, a former subsidiary of World Acceptance Corporation
TCJA	Tax Cuts and Jobs Act
Transition Tax	Tax amount associated with a one-time repatriation tax on deferred foreign income
WAC de Mexico	WAC de México, S.A. de C.V., SOFOM, E.N.R., a former subsidiary of World Acceptance Corporation

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PART I. FINANCIAL INFORMATION

WORLD ACCEPTANCE CORPORATION

AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)



	December 31, 2018			March 31, 2018
ASSETS
Cash and cash equivalents	$	11,131,795		$	12,473,833
Gross loans receivable	1,258,907,905			1,004,233,159
Less:
Unearned interest, insurance and fees	(338,132,479		)	(258,991,492		)
Allowance for loan losses	(91,305,834		)	(66,088,139		)
Loans receivable, net	829,469,592			679,153,528
Property and equipment, net	24,436,278			22,785,951
Deferred income taxes, net	23,781,795			20,175,148
Other assets, net	16,974,557			13,244,416
Goodwill	7,034,463			7,034,463
Intangible assets, net	14,684,675			6,644,301
Assets of discontinued operations (Note 2)	—			79,475,397
Total assets	$	927,513,155		$	840,987,037

LIABILITIES & SHAREHOLDERS' EQUITY

Liabilities:
Senior notes payable	$	308,040,000		$	244,900,000
Income taxes payable	10,800,106			14,097,419
Accounts payable and accrued expenses	34,604,163			33,503,335
Liabilities of discontinued operations (Note 2)	—			7,378,431
Total liabilities	353,444,269			299,879,185

Commitments and contingencies (Note 11)	—			—

Shareholders' equity:
Preferred stock, no par value Authorized 5,000,000, no shares issued or outstanding	—			—
Common stock, no par value Authorized 95,000,000 shares; issued and outstanding 9,839,348 and 9,119,443 shares at December 31, 2018 and March 31, 2018, respectively	—			—
Additional paid-in capital	187,258,977			175,887,227
Retained earnings	386,809,909			391,275,705
Accumulated other comprehensive loss	—			(26,055,080		)
Total shareholders' equity	574,068,886			541,107,852

Total liabilities and shareholders' equity	$	927,513,155		$	840,987,037

See accompanying notes to consolidated financial statements.

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WORLD ACCEPTANCE CORPORATION

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)



	Three months ended December 31,					Nine months ended December 31,
	2018		2017			2018			2017
Continuing operations
Revenues:
Interest and fee income	$	122,998,784	$	112,032,713		$	344,933,259		$	321,717,884
Insurance income, net and other income	14,640,547		13,669,926			42,611,820			39,552,172
Total revenues	137,639,331		125,702,639			387,545,079			361,270,056

Expenses:
Provision for loan losses	48,943,886		40,455,513			119,893,201			100,989,538
General and administrative expenses:
Personnel	47,106,172		36,465,905			128,370,062			115,708,658
Occupancy and equipment	10,363,659		9,793,672			30,781,521			29,036,158
Advertising	8,930,182		7,922,621			18,896,777			17,601,531
Amortization of intangible assets	372,270		271,013			911,218			732,282
Other	10,191,888		10,396,491			30,717,796			30,746,671
Total general and administrative expenses	76,964,171		64,849,702			209,677,374			193,825,300

Interest expense	4,637,154		5,000,504			13,020,154			14,037,950
Total expenses	130,545,211		110,305,719			342,590,729			308,852,788

Income from continuing operations before income taxes	7,094,120		15,396,920			44,954,350			52,417,268

Income taxes	833,958		15,203,517			8,997,456			28,979,799

Income from continuing operations	6,260,162		193,403			35,956,894			23,437,469

Discontinued operations (Note 2)
Income (loss) from discontinued operations before disposal of discontinued operations and income taxes	—		(104,947		)	2,341,825			110,343
Gain (loss) on disposal of discontinued operations	—		—			(38,377,623		)	—
Income taxes (benefit)	—		(1,591,761		)	626,583			(999,436		)
Income (loss) from discontinued operations	—		1,486,814			(36,662,381		)	1,109,779

Net income (loss)	$	6,260,162	$	1,680,217		$	(705,487	)	$	24,547,248

Net income per common share from continuing operations:
Basic	$	0.69	$	0.02		$	3.96		$	2.68
Diluted	$	0.67	$	0.02		$	3.88		$	2.64
Net income (loss) per common share from discontinued operations:

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Basic	$	—	$	0.17	$	(4.04	)	$	0.13
Diluted	$	—	$	0.17	$	(3.95	)	$	0.12
Net income (loss) per common share:
Basic	$	0.69	$	0.19	$	(0.08	)	$	2.81
Diluted	$	0.67	$	0.19	$	(0.08	)	$	2.76
Weighted average common shares outstanding:
Basic	9,108,516		8,787,835		9,078,576			8,729,710
Diluted	9,278,834		8,937,960		9,275,068			8,886,763

See accompanying notes to consolidated financial statements.

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WORLD ACCEPTANCE CORPORATION

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)



	Three months ended December 31,					Nine months ended December 31,
	2018		2017			2018			2017

Net income (loss)	$	6,260,162	$	1,680,217		$	(705,487	)	$	24,547,248
Foreign currency translation adjustments	—		(4,940,844		)	(5,235,838		)	(3,282,203		)
Reclassification of cumulative foreign currency translation adjustments due to sale of Mexico business	—		—			31,290,918			—
Comprehensive income (loss)	$	6,260,162	$	(3,260,627	)	$	25,349,593		$	21,265,045

See accompanying notes to consolidated financial statements.

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WORLD ACCEPTANCE CORPORATION

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(Unaudited)



	Three months ended December 31, 2018
	Common Stock
	Shares		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss, net	Total Shareholders' Equity
Balances at September 30, 2018	9,153,145		$	180,680,619	384,310,056		—	564,990,675
Proceeds from exercise of stock options	20,180		1,000,193		—		—	1,000,193
Common stock repurchases	(38,822	)	—		(3,760,309	)	—	(3,760,309	)
Restricted common stock expense under stock option plan, net of cancellations ($1,348,952)	704,845		4,216,816		—		—	4,216,816
Stock option expense	—		1,361,349		—		—	1,361,349
Net income	—		—		6,260,162		—	6,260,162
Balances at December 31, 2018	9,839,348		$	187,258,977	386,809,909		—	574,068,886



	Three months ended December 31, 2017
	Common Stock
	Shares		Additional Paid-in Capital			Retained Earnings	Accumulated Other Comprehensive Loss, net		Total Shareholders' Equity
Balances at September 30, 2017	8,840,040		$	155,823,825		360,452,718	(26,124,234	)	490,152,309
Proceeds from exercise of stock options	39,891		1,971,294			—	—		1,971,294
Common stock repurchases	—		—			—	—		—
Restricted common stock expense under stock option plan, net of cancellations ($957,699)	(11,535	)	(634,498		)	—	—		(634,498	)
Stock option expense	—		712,286			—	—		712,286
Other comprehensive loss	—		—			—	(4,940,844	)	(4,940,844	)
Net income	—		—			1,680,217	—		1,680,217
Balances at December 31, 2017	8,868,396		$	157,872,907		362,132,935	(31,065,078	)	488,940,764

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	Nine months ended December 31, 2018
	Common Stock
	Shares		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss, net		Total Shareholders' Equity
Balances at March 31, 2018	9,119,443		$	175,887,227	391,275,705		(26,055,080	)	541,107,852
Proceeds from exercise of stock options	45,456		2,815,599		—		—		2,815,599
Common stock repurchases	(38,822	)	—		(3,760,309	)	—		(3,760,309	)
Restricted common stock expense under stock option plan, net of cancellations ($1,348,952)	713,271		6,131,165		—		—		6,131,165
Stock option expense	—		2,424,986		—		—		2,424,986
Other comprehensive loss	—		—		—		(5,235,838	)	(5,235,838	)
Reclassification of cumulative foreign currency translation adjustments due to sale of Mexico business	—		—		—		31,290,918		31,290,918
Net loss	—		—		(705,487	)	—		(705,487	)
Balances at December 31, 2018	9,839,348		$	187,258,977	386,809,909		—		574,068,886



	Nine months ended December 31, 2017
	Common Stock
	Shares		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss, net		Total Shareholders' Equity
Balances at March 31, 2017	8,782,949		$	144,241,105	344,605,347		(27,782,875	)	461,063,577
Proceeds from exercise of stock options	155,710		8,736,340		—		—		8,736,340
Common stock repurchases	(58,728	)	—		(4,614,331	)	—		(4,614,331	)
Restricted common stock expense under stock option plan, net of cancellations ($957,699)	(11,535	)	655,620		—		—		655,620
Stock option expense	—		1,834,513		—		—		1,834,513
ASU 2016-09 adoption	—		2,405,329		(2,405,329	)	—		—
Other comprehensive loss	—		—		—		(3,282,203	)	(3,282,203	)
Net income	—		—		24,547,248		—		24,547,248
Balances at December 31, 2017	8,868,396		$	157,872,907	362,132,935		(31,065,078	)	488,940,764

See accompanying notes to consolidated financial statements.

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WORLD ACCEPTANCE CORPORATION

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

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	Nine months ended December 31,
	2018			2017
Cash flow from operating activities:
Net income (loss)	$	(705,487	)	$	24,547,248
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Loss on sale of discontinued operations	38,377,623			—
Amortization of intangible assets	911,218			732,282
Amortization of debt issuance costs	456,568			656,806
Provision for loan losses	119,893,201			113,570,935
Depreciation	5,015,745			5,471,446
Loss on sale of property and equipment	50,139			223,764
Deferred income tax benefit (expense)	(3,606,647		)	2,241,233
Compensation related to stock option and restricted stock plans, net of taxes and adjustments	9,905,103			3,447,832
Change in accounts:
Other assets, net	(3,946,708		)	(1,573,172		)
Income taxes payable	(3,297,313		)	(7,165,088		)
Accounts payable and accrued expenses	1,100,829			3,420,224
Net cash provided by operating activities	164,154,271			145,573,510
Cash flows from investing activities:
Increase in loans receivable, net	(239,976,349		)	(202,138,017		)
Net assets acquired from branch acquisitions, primarily loans	(30,232,918		)	(8,829,565		)
Increase in intangible assets from acquisitions	(8,951,592		)	(1,877,329		)
Purchases of property and equipment	(6,973,951		)	(6,809,295		)
Proceeds from sale of property and equipment	257,740			193,535
Proceeds from sale of Mexico business	37,494,505			—
Net cash used in investing activities	(248,382,565		)	(219,460,671		)
Cash flow from financing activities:
Borrowings from senior notes payable	246,640,000			236,763,800
Payments on senior notes payable	(183,500,000		)	(155,050,000		)
Debt issuance costs associated with senior notes payable	(240,000		)	(420,000		)
Proceeds from exercise of stock options	2,815,599			8,736,340
Payments for taxes related to net share settlement of equity awards	(1,348,952		)	(957,699		)
Repurchase of common stock	(3,760,309		)	(4,614,331		)
Net cash provided by financing activities	60,606,338			84,458,110
Effects of foreign currency fluctuations on cash and cash equivalents	2,667,447			(799,995		)
Net change in cash and cash equivalents	(20,954,509		)	9,770,954
Cash and cash equivalents at beginning of period from continuing operations	12,473,833			11,581,936
Cash and cash equivalents at beginning of period from discontinued operations	19,612,471			3,618,474
Cash and cash equivalents at end of period	$	11,131,795		$	24,971,364
Cash and cash equivalents at end of period from continuing operations	11,131,795			12,440,318
Cash and cash equivalents at end of period from discontinued operations	—			12,531,046

Supplemental Disclosures:
Interest paid during the period	$	11,865,748		$	12,609,023
Income taxes paid during the period	$	16,976,977		$	35,181,118

See accompanying notes to consolidated financial statements.

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WORLD ACCEPTANCE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 – BASIS OF PRESENTATION

The consolidated financial statements of the Company at December 31, 2018, and for the three and nine months then ended were prepared in accordance with the instructions for Form 10-Q and are unaudited; however, in the opinion of management all adjustments (consisting only of items of a normal, recurring nature) necessary for a fair presentation of the financial position at December 31, 2018, and the results of operations and cash flows for the periods ended December 31, 2018 and 2017, have been included. The results for the interim periods are not necessarily indicative of the results that may be expected for the full year or any other interim period.

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities at the date of the consolidated financial statements and the reported amount of revenue and expenses during the reporting period. Actual results could differ from those estimates.

The consolidated financial statements do not include all disclosures required by GAAP and should be read in conjunction with the Company’s audited consolidated financial statements and related notes for the fiscal year ended March 31, 2018, included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2018, as filed with the SEC.

NOTE 2 – DISCONTINUED OPERATIONS

As previously disclosed, the Company sold all of the issued and outstanding capital stock and equity interest of WAC de Mexico and SWAC to the Purchasers, effective as of July 1, 2018, for a purchase price of approximately $44.36 million. The Company has provided, and may continue to provide, limited ParaData systems and software training to the Purchasers, as requested. The Company has not and will not have any other involvement with the Mexico operating segment subsequent to the sale's effective date.

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The following table reconciles the major classes of assets and liabilities of discontinued operations to the amounts presented in the Consolidated Balance Sheet for March 31, 2018:



	March 31, 2018
Assets of discontinued operations:
Cash and cash equivalents	$	19,612,471
Loans receivable, net	46,027,200
Property and equipment, net	2,805,467
Deferred income taxes, net	10,064,489
Other assets, net	965,770
Total assets of discontinued operations	$	79,475,397

Liabilities of discontinued operations:
Income taxes payable	437,551
Accounts payable and accrued expenses	6,940,880
Total liabilities of discontinued operations	$	7,378,431

The following table reconciles the major classes of line items constituting pre-tax income (loss) of discontinued operations to the amounts presented in the Consolidated Statements of Operations:



	Three months ended December 31,			Nine months ended December 31,
	2018	2017		2018		2017

Revenues	—	11,231,128		9,693,367		35,578,665
Provision for loan losses	—	3,299,392		1,809,059		12,581,397
General and administrative expenses	—	8,036,683		5,542,483		22,886,925
Income from discontinued operations before disposal of discontinued operations and income taxes	—	(104,947	)	2,341,825		110,343
Gain (loss) on disposal of discontinued operations	—	—		(38,377,623	)	—
Income taxes (benefit)	—	(1,591,761	)	626,583		(999,436	)
Income (loss) from discontinued operations	—	1,486,814		(36,662,381	)	1,109,779

The following table presents operating, investing and financing cash flows for the Company’s discontinued operations:



	Nine months ended December 31,
	2018			2017

Cash provided by operating activities:	$	3,553,854		$	15,224,142
Cash provided by (used in) investing activities:	1,138,084			(5,511,573		)
Cash provided by (used in) financing activities:	$	(17,126,000	)	$	—

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NOTE 3 – SUMMARY OF SIGNIFICANT POLICIES

Nature of Operations

The Company is a small-loan consumer finance company headquartered in Greenville, South Carolina that offers short-term small loans, medium-term larger loans, related credit insurance products and ancillary products and services to individuals who have limited access to other sources of consumer credit. The Company offers income tax return preparation services to its loan customers and other individuals.

Seasonality

The Company's loan volume and corresponding loans receivable follow seasonal trends. The Company's highest loan demand generally occurs from October through December, its third fiscal quarter. Loan demand is generally lowest and loan repayment highest from January to March, its fourth fiscal quarter. Loan volume and average balances remain relatively level during the remainder of the year. Consequently, the Company experiences significant seasonal fluctuations in its operating results and cash needs. Operating results for the Company's third fiscal quarter are generally lower than in other quarters and operating results for its fourth fiscal quarter are generally higher than in other quarters.

Recently Adopted Accounting Standards

Scope of Modification Accounting

In May 2017, the FASB issued ASU 2017-09, Scope of Modification Accounting. The amendments in this update provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. According to ASU 2017-09 an entity should account for the effects of a modification unless all the following are met:


1.	The fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified.


2.	The vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified.


3.	The classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified.

The amendments in this Update are effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. The Company adopted ASU 2017-09 on its effective date, April 1, 2018. Management has reviewed the provisions of ASU 2017-09 and has determined that there is no financial statement impact during the period since this is a clarification to current guidance. The Company will apply the clarified guidance on any future change to terms and conditions of share-based payment awards.

Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing

In April 2016, the FASB issued ASU 2016-10, Identifying Performance Obligations and Licensing. The amendments clarify the following two aspects of Topic 606: (a) identifying performance obligations; and (b) the licensing implementation guidance. The amendments do not change the core principle of the guidance in Topic 606. The effective date and transition requirements for the amendments are the same as the effective date and transition requirements in Topic 606. Public entities should apply the amendments for annual reporting periods beginning after December 15, 2017, including interim reporting periods therein. The Company adopted ASU 2016-10 on its effective date, April 1, 2018. Management has concluded that the new standard did not have a material impact on the Company's consolidated financial statements.

Recognition and Measurement of Financial Assets and Financial Liabilities

In January 2016, the FASB issued ASU 2016-01, which updates certain aspects of recognition, measurement, presentation and disclosure of financial instruments. Public entities should apply the amendments for annual reporting periods beginning after December 15, 2017, including interim reporting periods therein. The Company adopted ASU 2016-01 on its effective date, April 1, 2018. The Company's current disclosures around financial instruments reflect the instruments' estimated fair market value or exit price. Based on this, management has determined that the provisions of ASU 2016-01 had no financial statement impact during the period of adoption.

Revenue from Contracts with Customers

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In May 2014, the FASB issued ASU 2014-09, which supersedes the revenue recognition requirements Topic 605 (Revenue Recognition), and most industry-specific guidance. ASU 2014-09 is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09, as amended by ASU 2015-14, ASU 2016-20, ASU 2017-13, is effective for fiscal years, and interim periods, beginning after December 15, 2017. The Company adopted this new guidance on its effective date, April 1, 2018, using the modified retrospective method where prior periods are not restated. Management has evaluated revenue from contracts with customers and has concluded that the new standard did not have a material impact on the Company's consolidated financial statements.

Recently Issued Accounting Standards Not Yet Adopted

Simplifying the Test for Goodwill Impairment

In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment. ASU 2017-04 eliminates Step 2 from the goodwill impairment test. Instead, under the amendments in this Update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. ASU 2017-04 also eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. Therefore, the same impairment assessment applies to all reporting units. The amendments in this update are effective for public entities who are SEC filers for fiscal years beginning after December 15, 2018. Early adoption is permitted. We are currently evaluating the impact the adoption of this guidance will have on our consolidated financial statements.

Measurement of Credit Losses on Financial Instruments

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses. The amendment seeks to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in this ASU replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. For public business entities the amendments are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We are currently evaluating the impact the adoption of this guidance will have on our consolidated financial statements. The adoption of this ASU could have a material impact on the provision for loan losses in the consolidated statements of operations and allowance for loan losses in the consolidated balance sheets.

Leases

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The ASU 2016-02, as amended by ASU 2018-01, and ASU 2018-10, will require lessees to recognize assets and liabilities on leases with terms greater than 12 months and to disclose information related to the amount, timing and uncertainty of cash flows arising from leases, including various qualitative and quantitative requirements. The amendments of this ASU become effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018. We are currently evaluating the impact the adoption of this guidance will have on our consolidated financial statements. We expect the standard to have an impact on our assets and liabilities for the addition of right-of-use assets and lease liabilities, but we do not expect it to have a material impact to our results of operations or liquidity.

In July of 2018, the FASB issued ASU 2018-11, Leases: Targeted Improvements, which allows for a transition option to adopt the standard on the date of initial application as opposed to the modified retrospective approach. We plan to make the election to adopt the standard using this transition relief.

We reviewed all other newly issued accounting pronouncements and concluded that they are either not applicable to our business or are not expected to have a material effect on the consolidated financial statements as a result of future adoption.

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NOTE 4 – FAIR VALUE

Fair Value Disclosures

The Company may carry certain financial instruments and derivative assets and liabilities measured at fair value on a recurring basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Company determines the fair values of its financial instruments based on the fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

Financial assets and liabilities measured at fair value are grouped in three levels. The levels prioritize the inputs used to measure the fair value of the assets or liabilities. These levels are:


•	Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities.


•	Level 2 – Inputs other than quoted prices that are observable for assets and liabilities, either directly or indirectly. These inputs include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in market that are less active.


•	Level 3 – Unobservable inputs for assets or liabilities reflecting the reporting entity’s own assumptions.

The Company’s financial instruments measured at fair value on a recurring basis for the periods reported consist of the following: cash and cash equivalents, loans receivable, and senior notes payable. Fair value approximates carrying value for all of these instruments. Loans receivable are originated at prevailing market rates and have an average life of approximately eight months. Given the short-term nature of these loans, they are continually repriced at current market rates. The Company’s revolving credit facility has a variable rate based on a margin over LIBOR and reprices with any changes in LIBOR. The Company also considers its creditworthiness in its determination of fair value.

The carrying amounts and estimated fair values of amounts the Company measures at fair value on a recurring basis are summarized below.



		December 31, 2018			March 31, 2018
	Input Level	Carrying Value		Estimated Fair Value	Carrying Value		Estimated Fair Value
ASSETS
Cash and cash equivalents	1	$	11,131,795	11,131,795	$	12,473,833	12,473,833
Loans receivable, net	3	829,469,592		829,469,592	679,153,528		679,153,528

LIABILITIES
Senior notes payable	3	308,040,000		308,040,000	244,900,000		244,900,000

There were no significant assets or liabilities measured at fair value on a non-recurring basis as of December 31, 2018 or March 31, 2018.

NOTE 5 – FINANCE RECEIVABLES AND ALLOWANCE FOR LOAN LOSSES

The following is a summary of gross loans receivable as of:



	December 31, 2018		March 31, 2018		December 31, 2017

Small loans	$	857,945,959	$	670,189,211	$	774,416,024
Large loans	400,961,429		334,041,731		352,999,300
Sales finance loans⁽¹⁾	517		2,217		4,057
Total gross loans	$	1,258,907,905	$	1,004,233,159	$	1,127,419,381

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⁽¹⁾	The Company decided to wind down the World Class Buying Club program during the third quarter of fiscal 2015. As of March 31, 2015, the Company is no longer financing the purchase of products through the program; however, the Company will continue to service the outstanding retail installment sales contracts.

The following is a summary of the changes in the allowance for loan losses for the periods indicated:



	Three months ended December 31,						Nine months ended December 31,
	2018			2017			2018			2017

Balance at beginning of period	$	79,310,375		71,172,677			$	66,088,139		$	60,644,365
Provision for loan losses	48,943,886			40,455,513			119,893,201			100,989,538
Loan losses	(40,001,055		)	(33,550,642		)	(105,014,401		)	(91,047,277		)
Recoveries	3,052,628			3,242,943			10,338,895			10,733,865
Balance at end of period	$	91,305,834		$	81,320,491		$	91,305,834		$	81,320,491

The following is a summary of loans individually and collectively evaluated for impairment for the period indicated:



December 31, 2018	Loans individually evaluated for impairment (impaired loans)			Loans collectively evaluated for impairment		Total

Gross loans in bankruptcy, excluding contractually delinquent	$	4,714,475		—		4,714,475
Gross loans contractually delinquent	62,834,979			—		62,834,979
Loans not contractually delinquent and not in bankruptcy	—			1,191,358,451		1,191,358,451
Gross loan balance	67,549,454			1,191,358,451		1,258,907,905
Unearned interest and fees	(14,930,704		)	(323,201,775	)	(338,132,479	)
Net loans	52,618,750			868,156,676		920,775,426
Allowance for loan losses	(48,104,640		)	(43,201,194	)	(91,305,834	)
Loans, net of allowance for loan losses	$	4,514,110		824,955,482		829,469,592



March 31, 2018	Loans individually evaluated for impairment (impaired loans)			Loans collectively evaluated for impairment		Total

Gross loans in bankruptcy, excluding contractually delinquent	$	4,627,599		—		4,627,599
Gross loans contractually delinquent	50,019,567			—		50,019,567
Loans not contractually delinquent and not in bankruptcy	—			949,585,993		949,585,993
Gross loan balance	54,647,166			949,585,993		1,004,233,159
Unearned interest and fees	(11,433,666		)	(247,557,826	)	(258,991,492	)
Net loans	43,213,500			702,028,167		745,241,667
Allowance for loan losses	(38,782,574		)	(27,305,565	)	(66,088,139	)
Loans, net of allowance for loan losses	$	4,430,926		674,722,602		679,153,528

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December 31, 2017	Loans individually evaluated for impairment (impaired loans)			Loans collectively evaluated for impairment		Total

Gross loans in bankruptcy, excluding contractually delinquent	$	4,507,307		—		4,507,307
Gross loans contractually delinquent	57,019,347			—		57,019,347
Loans not contractually delinquent and not in bankruptcy	—			1,065,892,727		1,065,892,727
Gross loan balance	61,526,654			1,065,892,727		1,127,419,381
Unearned interest and fees	(13,118,190		)	(287,078,221	)	(300,196,411	)
Net loans	48,408,464			778,814,506		827,222,970
Allowance for loan losses	(44,092,718		)	(37,227,773	)	(81,320,491	)
Loans, net of allowance for loan losses	$	4,315,746		741,586,733		745,902,479

The average net balance of impaired loans was $46.3 million and $42.1 million, respectively, for the nine month periods ended December 31, 2018, and 2017. It is not practical to compute the amount of interest earned on impaired loans.

The following is an assessment of the credit quality for the period indicated:



	December 31, 2018		March 31, 2018		December 31, 2017
Credit risk
Consumer loans- non-bankrupt accounts	$	1,252,645,902	$	998,299,051	$	1,121,591,353
Consumer loans- bankrupt accounts	6,262,003		5,934,108		5,828,028
Total gross loans	$	1,258,907,905	$	1,004,233,159	$	1,127,419,381

Consumer credit exposure
Credit risk profile based on payment activity, performing	$	1,164,459,600	$	929,400,862	1,044,690,133
Contractual non-performing, 61 or more days delinquent ⁽¹⁾	94,448,305		74,832,297		82,729,248
Total gross loans	$	1,258,907,905	$	1,004,233,159	$	1,127,419,381

Credit risk profile based on customer type
New borrower	$	175,727,060	$	104,762,628	$	126,446,949
Former borrower	144,840,392		104,281,551		131,195,579
Refinance	917,868,854		778,115,097		850,626,372
Delinquent refinance	20,471,599		17,073,883		19,150,481
Total gross loans	$	1,258,907,905	$	1,004,233,159	$	1,127,419,381


⁽¹⁾	Loans in non-accrual status.

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The following is a summary of the past due receivables as of:



	December 31, 2018			March 31, 2018		December 31, 2017
Contractual basis:
30-60 days past due	$	49,655,289		32,959,151		39,955,532
61-90 days past due	31,613,326			24,812,730		25,709,901
91 days or more past due	62,834,979			50,019,567		57,019,347
Total	$	144,103,594		107,791,448		122,684,780

Percentage of period-end gross loans receivable	11.4		%	10.7	%	10.9	%

NOTE 6 – AVERAGE SHARE INFORMATION

The following is a summary of the basic and diluted average common shares outstanding:



	Three months ended December 31,		Nine months ended December 31,
	2018	2017	2018	2017
Basic:
Weighted average common shares outstanding (denominator)	9,108,516	8,787,835	9,078,576	8,729,710

Diluted:
Weighted average common shares outstanding	9,108,516	8,787,835	9,078,576	8,729,710
Dilutive potential common shares securities	170,318	150,125	196,492	157,053
Weighted average diluted shares outstanding (denominator)	9,278,834	8,937,960	9,275,068	8,886,763

Options to purchase 701,484 and 338,489 shares of common stock at various prices were outstanding during the three months ended December 31, 2018 and 2017 respectively, but were not included in the computation of diluted EPS because the option exercise price was anti-dilutive.

Options to purchase 552,337 and 392,609 shares of common stock at various prices were outstanding during the nine months ended December 31, 2018 and 2017 respectively, but were not included in the computation of diluted EPS because the option exercise price was anti-dilutive.

NOTE 7 – STOCK-BASED COMPENSATION

Stock Incentive Plans

The Company has a 2005 Stock Option Plan, a 2008 Stock Option Plan, a 2011 Stock Option Plan and a 2017 Stock Incentive Plan for the benefit of certain non-employee directors, officers, and key employees. Under these plans, a total of 4,950,000 shares of common stock have been authorized and reserved for issuance pursuant to grants approved by the Compensation and Stock Option Committee of the Board of Directors. Stock options granted under these plans have a maximum duration of 10 years, may be subject to certain vesting requirements, which are generally three to five years for officers, non-employee directors, and key employees, and are priced at the market value of the Company's common stock on the option's grant date. At December 31, 2018, there were a total of 246,296 shares of common stock available for grant under the plans.

Stock-based compensation is recognized as provided under FASB ASC Topic 718-10 and FASB ASC Topic 505-50. FASB ASC Topic 718-10 requires all share-based payments to employees, including grants of employee stock options, to be recognized as compensation expense over the requisite service period (generally the vesting period) in the consolidated financial statements based on their grant date fair values. The Company has applied the Black-Scholes valuation model in determining the grant date fair value of the stock option awards. Compensation expense is recognized only for those options expected to vest.

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Long-term Incentive Program and Non-Employee Director Awards

On October 15, 2018, the Compensation Committee and Board approved and adopted a new long-term incentive program that seeks to motivate and reward certain employees and to align management’s interest with shareholders' by focusing executives on the achievement of long-term results. The program is comprised of four components: Service Options, Performance Options, Restricted Stock, and Performance Shares.

Pursuant to this program, the Compensation Committee approved certain grants of Service Options, Performance Options, Restricted Stock and Performance Shares under the World Acceptance Corporation 2011 Stock Option Plan and the World Acceptance Corporation 2017 Stock Incentive Plan to certain employee directors, vice presidents of operations, vice presidents, senior vice presidents, and executive officers. Separately, the Compensation Committee approved certain grants of Service Options and Restricted Stock to certain of the Company's non-employee directors.

Under the long-term incentive program, up to 100% of the shares of restricted stock subject to the Performance Shares shall vest, if at all, based on the achievement of two trailing earnings per share performance targets established by the Compensation Committee that are based on earnings per share (measured at the end of each calendar quarter, commencing with the calendar quarter ending September 30, 2019) for the previous four calendar quarters. The Performance Shares are eligible to vest over the Performance Share Measurement Period and subject to each respective employee’s continued employment at the Company through the last day of the applicable Performance Share Measurement Period (or as otherwise provided under the terms of the applicable award agreement or applicable employment agreement).

The Performance Share performance targets are set forth below.



Trailing 4-Quarter EPS Targets for September 30, 2018 through March 31, 2025	Restricted Stock Eligible for Vesting (Percentage of Award)
$16.35	40%
$20.45	60%

The Restricted Stock awards will vest in six equal annual installments, beginning on the first anniversary of the grant date, subject to each respective employee’s continued employment at the Company through each applicable vesting date or otherwise provided under the terms of the applicable award agreement or applicable employment agreement.

The Service Options will vest in six equal annual installments, beginning on the first anniversary of the grant date, subject to each respective employee’s continued employment at the Company through each applicable vesting date or otherwise provided under the terms of the applicable award agreement or applicable employment agreement. The option price is equal to the fair market value of the common stock on the grant date and the Service Options shall have a 10-year term.

The Performance Options shall fully vest if the Company attains the trailing earnings per share target over four consecutive calendar quarters occurring between September 30, 2018 and March 31, 2025 described below. Such performance target was established by the Compensation Committee and will be measured at the end of each calendar quarter commencing on September 30, 2019. The Performance Options are eligible to vest over the Option Measurement Period, subject to each respective employee’s continued employment at the Company through the last day of the Option Measurement Period or as otherwise provided under the terms of the applicable award agreement or applicable employment agreement. The option price is equal to the fair market value of the common stock on the grant date and the Performance Options shall have a 10-year term. The Performance Option performance target is set forth below.



Trailing 4-Quarter EPS Targets for September 30, 2018 through March 31, 2025	Options Eligible for Vesting (Percentage of Award)
$25.30	100%

Stock Options

The weighted-average fair value at the grant date for options issued during the three months ended December 31, 2018 and 2017 was $53.13 and $39.63, respectively.

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The weighted-average fair value at the grant date for options issued during the nine months ended December 31, 2018 and 2017 was $53.12 and $39.33, respectively. Fair value was estimated at grant date using the weighted-average assumptions listed below:



	Nine months ended December 31,
	2018	2017

Dividend Yield	—%	—%
Expected Volatility	48.95%	52.97%
Average risk-free rate	3.06%	1.97%
Expected Life	6.7 years	5.0 years

The expected stock price volatility is based on the historical volatility of the Company's common stock for a period approximating the expected life. The expected life represents the period of time that options are expected to be outstanding after the grant date. The risk-free rate reflects the interest rate at grant date on zero coupon U.S. governmental bonds having a remaining life similar to the expected option term.

Option activity for the nine months ended December 31, 2018 was as follows:



	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value

Options outstanding, beginning of period	497,728		$	70.69
Granted during period	294,630		100.79
Exercised during period	(45,456	)	61.94
Forfeited during period	(6,845	)	72.64
Expired during period	(3,052	)	33.91
Options outstanding, end of period	737,005		$	83.38	7.0 years	$	13,941,136
Options exercisable, end of period	361,283		$	71.25	4.7 years	$	11,217,190

The aggregate intrinsic value reflected in the table above represents the total pre-tax intrinsic value (the difference between the closing stock price on December 31, 2018 and the exercise price, multiplied by the number of in-the-money options) that would have been received by option holders had all option holders exercised their options as of December 31, 2018. This amount will change as the market price of the common stock changes. The total intrinsic value of options exercised during the periods ended December 31, 2018 and 2017 was as follows:



	December 31, 2018		December 31, 2017

Three months ended	$	1,159,858	$	1,334,062
Nine months ended	$	2,251,405	$	4,010,659

As of December 31, 2018, total unrecognized stock-based compensation expense related to non-vested stock options amounted to approximately $15.5 million, which is expected to be recognized over a weighted-average period of approximately 5.3 years.

Restricted Stock

During the nine months ended December 31, 2018, the Company granted 725,420 shares of restricted stock (which are equity classified) to certain vice presidents, senior vice presidents, executive officers and non-employee directors, with a grant date weighted average fair value of $100.99 per share.

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During fiscal 2018, the Company granted 24,456 shares of restricted stock (which are equity classified) to certain executive officers, with a grant date weighted average fair value of $107.52 per share. One-third of these awards vest on each anniversary of the grant date over the three years following the grant date.

During fiscal 2017, the Company granted 74,490 shares of restricted stock (which are equity classified) to certain executive officers, with a grant date weighted average fair value of $51.15 per share. One-third of these awards vest on each anniversary of the grant date over the three years following the grant date.

Compensation expense related to restricted stock is based on the number of shares expected to vest and the fair market value of the common stock on the grant date. The Company recognized compensation expense of $5.6 million and $0.3 million for the three months ended December 31, 2018 and 2017, respectively, and recognized compensation expense of $7.5 million and $1.6 million for the nine months ended December 31, 2018 and 2017, respectively, which is included as a component of general and administrative expenses in the Company’s Consolidated Statements of Operations.

As of December 31, 2018, there was approximately $69.1 million of unrecognized compensation cost related to unvested restricted stock awards, which is expected to be recognized over the next 4.8 years based on current estimates.

A summary of the status of the Company’s restricted stock as of December 31, 2018, and changes during the nine months ended December 31, 2018, are presented below:



	Shares		Weighted Average Fair Value at Grant Date

Outstanding at March 31, 2018	73,810		$	65.74
Granted during the period	725,420		100.99
Vested during the period	(39,392	)	55.51
Forfeited during the period	—		—
Outstanding at December 31, 2018	759,838		$	99.93

Total Stock-Based Compensation

Total stock-based compensation included as a component of net income during the three and nine-month periods ended December 31, 2018 and 2017 was as follows:



	Three months ended December 31,			Nine months ended December 31,
	2018		2017	2018		2017
Stock-based compensation related to equity classified awards:
Stock-based compensation related to stock options	$	1,361,349	712,286	$	2,424,986	$	1,834,513
Stock-based compensation related to restricted stock, net of adjustments and exclusive of cancellations	5,565,768		323,201	7,480,117		1,613,319
Total stock-based compensation related to equity classified awards	$	6,927,117	1,035,487	$	9,905,103	$	3,447,832

NOTE 8 – ACQUISITIONS

The Company evaluates each set of assets and activities it acquires to determine if the set meets the definition of a business according to FASB ASC Topic 805-10-55. Acquisitions meeting the definition of a business are accounted for as a business combination while all other acquisitions are accounted for as asset purchases.

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The following table sets forth the Company's acquisition activity for the nine months ended December 31, 2018 and 2017.



	Nine months ended December 31,
	2018		2017
Acquisitions:
Number of branches acquired through business combinations	14		3
Number of loan portfolios acquired through asset purchases	83		25
Total acquisitions	97		28

Purchase price	$	39,184,508	$	10,706,894

Tangible assets:
Loans receivable, net	30,232,918		8,826,565
Property and equipment	—		3,000
Total tangible assets	30,232,918		8,829,565

Excess of purchase prices over carrying value of net tangible assets	$	8,951,590	$	1,877,329

Customer lists	8,456,590		770,086
Non-compete agreements	495,000		140,000
Goodwill	—		967,243
Total intangible assets	$	8,951,590	$	1,877,329

Acquisitions that are accounted for as business combinations typically result in one or more new branches. In such cases, the Company typically retains the existing employees and the branch location from the acquisition. The purchase price is allocated to the tangible assets and intangible assets acquired based upon their estimated fair market values at the acquisition date. The remainder is allocated to goodwill.

The following table describes the Company's business combination activity for the nine months ended December 31, 2018.



No.	Acquiree Name	Acquiree State(s)	Date
1	Customer Credit Corporation (1 branch)	LA	8/13/2018
2	Your Credit, Inc. (1 branch)	WI	8/24/2018
3	Noble Finance Corporation (1 branch)	ID	9/28/2018
4	Noble Finance Corporation (1 branch)	MO	10/15/2018
5	Gentry Credit Corporation (1 branch)	UT	10/26/2018
6	Gentry Finance Corporation (6 branches)	UT	10/26/2018
7	Noble Finance Corporation (2 branches)	UT	10/26/2018
8	Noble Finance Corporation (1 branch)	TX	11/26/2018

Acquisitions that are accounted for as asset purchases are typically limited to acquisitions of loan portfolios. The purchase price is allocated to the tangible assets and intangible assets acquired based upon their estimated fair market values at the acquisition date. In an asset purchase, no goodwill is recorded.

The Company’s acquisitions include tangible assets (generally loans and furniture and equipment) and intangible assets (generally non-compete agreements, customer lists, and goodwill), both of which are recorded at their fair values, which are estimated pursuant to the processes described below.

Acquired loans are valued at the net loan balance. Given the short-term nature of these loans, generally eight months, and that these loans are priced at current rates, management believes the net loan balances approximate their fair value.

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Furniture and equipment are valued at the specific purchase price as agreed to by both parties at the time of acquisition, which management believes approximates their fair values.

Non-compete agreements are valued at the stated amount paid to the other party for these agreements, which the Company believes approximates the fair value.

Customer lists are valued with a valuation model that utilizes the Company’s historical data to estimate the value of any acquired customer lists. Customer lists are allocated at a branch level and are evaluated for impairment at a branch level when a triggering event occurs in accordance with FASB ASC Topic 360-10-05. If a triggering event occurs, the impairment loss to the customer list is generally the remaining unamortized customer list balance. In most acquisitions, the original fair value of the customer list allocated to a branch is less than $100,000, and management believes that in the event a triggering event were to occur, the impairment loss to an unamortized customer list would be immaterial.

The results of all acquisitions have been included in the Company’s Consolidated Financial Statements since the respective acquisition date. The pro forma impact of these branches as though they had been acquired at the beginning of the periods presented would not have a material effect on the results of operations as reported.

NOTE 9 – DEBT

At December 31, 2018, the Company's notes payable consisted of a $480.0 million senior revolving credit facility with borrowings of $308.0 million outstanding and a $300.0 thousand outstanding standby letter of credit related to workers compensation. To the extent that the letter of credit is drawn upon, the disbursement will be funded by the credit facility. There are no amounts due related to the letter of credit as of December 31, 2018. The letter of credit expires on December 31, 2019; however, it automatically extends for one year on the expiration date. Subject to a borrowing base formula, the Company may borrow at the rate of LIBOR plus an applicable margin between 3.0% and 4.0% based on certain EBITDA related metrics set forth in the revolving credit agreement, which will be determined and adjusted on a monthly basis with a minimum rate of 4.0%. For the nine months ended December 31, 2018 and fiscal year ended March 31, 2018, the Company’s effective interest rate, including the commitment fee and amortization of debt issuance costs, was 6.8% and 6.0%, respectively, and the unused amount available under the revolver at December 31, 2018 was $171.7 million. The revolving credit facility has a commitment fee of 0.50% per annum on the unused portion of the commitment. Borrowings under the revolving credit facility mature on June 15, 2020.

Substantially all of the Company’s assets are pledged as collateral for borrowings under the revolving credit agreement.

The revolving credit agreement contains events of default including, without limitation, nonpayment of principal, interest or other obligations, violation of covenants, misrepresentation, cross-default to other debt, bankruptcy and other insolvency events, judgments, certain ERISA events, actual or asserted invalidity of loan documentation, invalidity of subordination provisions of subordinated debt, certain changes of control of the Company, and the occurrence of certain regulatory events (including the entry of any stay, order, certain judgment, ruling or similar event related to the Company’s or any of its subsidiaries’ originating, holding, pledging, collecting or enforcing its eligible finance receivables that is material to the Company or any subsidiary) which remains unvacated, undischarged, unbonded or unstayed by appeal or otherwise for a period of 60 days from the date of its entry and is reasonably likely to cause a material adverse change. If it is determined that a violation of the FCPA or other laws has occurred, as described in Note 11, such violation may give rise to an event of default under the revolving credit agreement if such violation were to have a material adverse effect on the Company’s business, operations, properties, assets, or condition (financial or otherwise) or if the amount of any settlement resulted in the Company failing to satisfy any financial covenants.

NOTE 10 – INCOME TAXES

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act. The TCJA included significant changes to existing tax law, including a permanent reduction to the U.S. federal corporate income tax rate from 35% to 21%, a one-time repatriation tax on deferred foreign income (“Transition Tax”), and changes in deductions, credits and business-related exclusions.

The permanent reduction to the U.S. federal corporate income tax rate from 35% to 21% was effective on January 1, 2018. When a federal tax rate change occurs during a fiscal year, the Internal Revenue Code requires taxpayers to compute a weighted daily average rate for the fiscal year of enactment. As a result, the Company calculated a U.S. federal statutory corporate income tax rate of 31.55% for the fiscal year ending March 31, 2018. The U.S. corporate federal statutory rate of 31.55% is the weighted daily average rate between the pre-enactment federal statutory rate of 35% and post-enactment federal statutory rate of 21%.

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The impact of changes in federal tax rates on deferred tax amounts and the effect of the Transition Tax are significant unusual or infrequent items which are recognized as discrete items in the Company’s income tax expense in the interim period in which the event occurs. The Company recorded a $10.5 million net impact of revaluing the U.S. deferred tax assets and liabilities in the third quarter of fiscal 2018. The Company also recorded additional tax expense of $4.9 million related to the Transition Tax during the fourth quarter of fiscal 2018.

During the first quarter of fiscal 2019, the Company's former Mexican subsidiaries paid the U.S. Company a dividend of $17.1 million. The Company will no longer claim permanent reinvestment in the respective foreign jurisdiction. Because of the Transition Tax, the Company's tax basis was greater than its book basis. This difference was recognized during the first quarter when the foreign subsidiaries were marked as held for sale. The recognition of the basis difference created a capital loss that the Company does not believe will be recognized in the carryforward period; therefore, a full tax valuation allowance was recorded against the recognized loss.

As of December 31, 2018 and March 31, 2018, the Company had $6.6 million and $8.8 million, respectively, of total gross unrecognized tax benefits including interest. Approximately $5.3 million and $6.9 million, respectively, represent the amount of net unrecognized tax benefits that are permanent in nature and, if recognized, would affect the annual effective tax rate. At December 31, 2018, approximately $1.4 million of gross unrecognized tax benefits are expected to be resolved during the next twelve months through the expiration of the statute of limitations and settlement with taxing authorities. The Company’s continuing practice is to recognize interest and penalties related to income tax matters in income tax expense. As of December 31, 2018, the Company had approximately $1.8 million accrued for gross interest, of which $0.5 million was accrued during the nine months ended December 31, 2018.

The Company is subject to U.S. income taxes, as well as various other state and local jurisdictions. With the exception of a few states, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2015, although carryforward attributes that were generated prior to 2015 may still be adjusted upon examination by the taxing authorities if they either have been or will be used in a future period.

The Company’s effective income tax rate for continuing operations decreased to 11.8% for the quarter ended December 31, 2018 compared to 98.7% for the prior year quarter. The decrease is primarily due to the $10.5 million charge to tax expense related to the revaluing of the deferred tax asset recorded as a discrete item in the prior year quarter, the reduction in the federal statutory tax rate that was fully integrated during the first quarter of fiscal 2019, and the lapse of the statute of limitations on several items resulting in the Company releasing $1.6 million of reserves during the current year quarter.

NOTE 11 – COMMITMENTS AND CONTINGENCIES

Mexico Investigation

As previously disclosed, the Company has retained outside legal counsel and forensic accountants to conduct an investigation of its operations in Mexico, focusing on the legality under the FCPA, and certain local laws of certain payments related to loans, the maintenance of the Company’s books and records associated with such payments, and the treatment of compensation matters for certain employees.

The investigation continues to address whether and to what extent improper payments, which may violate the FCPA and other local laws, were made approximately between 2010 and 2017 by or on behalf of WAC de Mexico, to government officials in Mexico relating to loans made to unionized employees. The Company voluntarily contacted the SEC and the DOJ in June 2017 to advise both agencies that an internal investigation was underway and that the Company intended to cooperate with both agencies. The Company has and will continue to cooperate with both agencies. The SEC has issued a formal order of investigation. A conclusion cannot be drawn at this time as to what potential remedies these agencies may seek. The Company cannot determine at this time the ultimate effect that the investigation or any remedial measures will have on its financial condition or results of operations.

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that a violation of the FCPA has occurred, such violation may give rise to an event of default under the Company’s credit agreement if such violation were to have a material adverse effect on the Company’s business, operations, properties, assets, or condition (financial or otherwise) or if the amount of any settlement, penalties, fines or other payments resulted in the Company failing to satisfy any financial covenants. Additional potential FCPA violations or violations of other laws or regulations may be uncovered through the investigation.

In addition to the ultimate liability for disgorgement and related interest, the Company believes that it could be further liable for fines and penalties. The Company is continuing its discussions with the DOJ and SEC regarding the matters under investigation, but the Company cannot reasonably estimate the amount of any fine or penalty that it may have to pay as a part of any possible settlement or assess the potential liability that might be incurred if a settlement is not reached and the government were to litigate the matter. As such, based on the information available at this time, any additional liability related to this matter is not reasonably estimable. The Company will continue to evaluate the amount of its liability pending final resolution of the investigation and any related discussions with the government.

Further, under the terms of the stock purchase agreement, we are obligated to indemnify the purchasers for claims and liabilities relating to certain investigations of our former Mexico operating segment, the Company, and its affiliates by the DOJ or the SEC that commenced prior to July 1, 2018. Any such indemnification claims could have a material adverse effect on our financial condition, including liquidity, and results of operations.

General

In addition, from time to time the Company is involved in litigation matters relating to claims arising out of its operations in the normal course of business.

Estimating an amount or range of possible losses resulting from litigation, government actions and other legal proceedings is inherently difficult and requires an extensive degree of judgment, particularly where the matters involve indeterminate claims for monetary damages, may involve fines, penalties or damages that are discretionary in amount, involve a large number of claimants or significant discretion by regulatory authorities, represent a change in regulatory policy or interpretation, present novel legal theories, are in the early stages of the proceedings, are subject to appeal or could result in a change in business practices. In addition, because most legal proceedings are resolved over extended periods of time, potential losses are subject to change due to, among other things, new developments, changes in legal strategy, the outcome of intermediate procedural and substantive rulings and other parties’ settlement posture and their evaluation of the strength or weakness of their case against us. For these reasons, we are currently unable to predict the ultimate timing or outcome of, or reasonably estimate the possible losses or a range of possible losses resulting from, the matters described above. Based on information currently available, the Company does not believe that any reasonably possible losses arising from currently pending legal matters will be material to the Company’s results of operations or financial condition. However, in light of the inherent uncertainties involved in such matters, an adverse outcome in one or more of these matters could materially and adversely affect the Company’s financial condition, results of operations or cash flows in any particular reporting period.

NOTE 12 – SUBSEQUENT EVENTS

Management is not aware of any significant events occurring subsequent to the balance sheet date that would have a material effect on the financial statements thereby requiring adjustment or disclosure.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Note Regarding Forward-Looking Information

This report on Form 10-Q, including "Management’s Discussion and Analysis of Financial Condition and Results of Operations," contains various "forward-looking statements," within the meaning of The Private Securities Litigation Reform Act of 1995, that are based on management’s beliefs and assumptions, as well as information currently available to management. Statements other than those of historical fact, as well as those identified by the words “anticipate,” “estimate,” “intend,” “plan,” “expect,” “believe,” “may,” “will,” “should,” "would," "could," and any variation of the foregoing and similar expressions are forward-looking statements. Although the Company believes that the expectations reflected in any such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Any such statements are subject to certain risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, the Company’s actual financial results, performance or financial condition may vary materially from those anticipated, estimated or expected. Therefore, you should not rely on any of these forward-looking statements.

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 the effect of changes in tax law, such as the effect of the TCJA that was enacted on December 22, 2017; the nature and scope of regulatory authority, particularly discretionary authority, that may be exercised by regulators, including, but not limited to, the SEC, DOJ, CFPB, and individual state regulators having jurisdiction over the Company; the unpredictable nature of regulatory proceedings and litigation; developments in, and the outcome of, our ongoing investigation into certain transactions and payments in Mexico, including any legal proceedings or government enforcement actions which could arise out of the matters under review, and any remedial actions we may take in connection therewith; any determinations, findings, claims or actions made or taken by regulators or other third parties in connection with or resulting from our ongoing investigation or the SEC's formal order of investigation; the recent sale of our Mexico subsidiaries, including claims or litigation resulting therefrom; uncertainties associated with management turnover and the effective succession of senior management; 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; risks relating to expansion; risks inherent in making loans, including repayment risks and value of collateral; cybersecurity threats, including the potential misappropriation of assets or sensitive information, corruption of data or operational disruption; our dependence on debt and the potential impact of limitations in the Company’s amended revolving credit facility; 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); changes in the Company’s markets and general changes in the economy (particularly in the markets served by the Company). These and other risks are discussed in more detail in Part II, Item 1A "Risk Factors" in the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 and in Part I, Item 1A “Risk Factors” in the Company's most recent report on Form 10-K for the fiscal year ended March 31, 2018 filed with the SEC, and in the Company’s other reports filed with, or furnished to, the SEC from time to time. The Company does not undertake any obligation to update any forward-looking statements it may make.

Results of Operations

The following table sets forth certain information derived from the Company's consolidated statements of operations and balance sheets, as well as operating data and ratios, for the periods indicated (unaudited). As a result of the sale of our Mexico subsidiaries, the below statistics describe our U.S. operating segment only:

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	Three months ended December 31,						Nine months ended December 31,
	2018			2017			2018			2017
	(Dollars in thousands)
Gross loans receivable	$	1,258,908		$	1,127,419		$	1,258,908		$	1,127,419
Average gross loans receivable ⁽¹⁾	1,183,223			1,066,785			1,105,090			1,011,637
Net loans receivable ⁽²⁾	920,776			827,223			920,776			827,223
Average net loans receivable ⁽³⁾	867,320			784,743			812,891			747,039

Expenses as a percentage of total revenue:
Provision for loan losses	35.6		%	32.2		%	30.9		%	28.0		%
General and administrative	55.9		%	51.6		%	54.1		%	53.7		%
Interest expense	3.4		%	4.0		%	3.4		%	3.9		%
Operating income as a % of total revenue ⁽⁴⁾	8.5		%	16.2		%	15.0		%	18.4		%

Loan volume	780,896			735,372			2,100,408			1,958,234

Net charge-offs as percent of average net loans receivable	17.0		%	15.4		%	15.5		%	14.3		%

Return on average assets (trailing 12 months)	7.4		%	6.9		%	7.4		%	6.9		%

Return on average equity (trailing 12 months)	11.7		%	12.2		%	11.7		%	12.2		%

Branches opened or acquired (merged or closed), net	15			5			27			5

Branches open (at period end)	1,204			1,174			1,204			1,174


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


⁽²⁾	Net loans receivable is defined as gross loans receivable less unearned interest and deferred fees.


⁽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.


⁽⁴⁾	Operating income is computed as total revenues less provision for loan losses and general and administrative expenses.

Comparison of three months ended December 31, 2018 versus three months ended December 31, 2017

Gross loans outstanding in the U.S. increased to $1.26 billion as of December 31, 2018, an 11.7% increase from the $1.13 billion of gross loans outstanding as of December 31, 2017. Our unique borrowers in the U.S. increased by 80,074 or 9.6%, during the third quarter of fiscal 2019. This is compared to an increase of 39,725, or 5.0%, during the third quarter of fiscal 2018.

Revenues from continuing operations increased by $11.9 million, or 9.5%, to $137.6 million during the quarter ended December 31, 2018 from $125.7 million for the corresponding quarter of the previous year. The increase was primarily due to an increase in average net loans outstanding. Revenues from the 1,143 branches open throughout both quarterly periods increased by 8.0%.

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Interest and fee income from continuing operations for the quarter ended December 31, 2018 increased by $11.0 million, or 9.8%, from the corresponding quarter of the previous year. The increase was primarily due to a corresponding increase in average net loans outstanding. Net loans outstanding at December 31, 2018 increased 11.3% over the balance at December 31, 2017. Average net loans outstanding increased 10.5% for the quarter ended December 31, 2018 compared to the quarter ended December 31, 2017. We have seen a slight reduction in the overall yield on our portfolio. This is largely due to refinancing a significant portion of our loans with performing customers into larger balance loans with lower rates. We have also reduced our interest rates in certain markets in an effort to increase demand.

Insurance commissions and other income from continuing operations for the quarter ended December 31, 2018 increased by $1.0 million, or 7.1%, from the corresponding quarter of the previous year. Insurance commissions increased by approximately $970.8 thousand, or 9.0%, during the three months ended December 31, 2018 when compared to the three months ended December 31, 2017.

Accounts from continuing operations that were 61 days or more past due on a recency basis increased to 6.0% at December 31, 2018, compared to 5.7% at December 31, 2017. Accounts from continuing operations that were 61 days or more past due on a contractual basis were 7.5% at December 31, 2018 compared to 7.3% at December 31, 2017. The Company's allowance for loan losses from continuing operations as a percentage of net loans from continuing operations was 9.9% at December 31, 2018 compared to 9.8% at December 31, 2017.

The provision for loan losses for continuing operations for the quarter ended December 31, 2018 increased by $8.5 million, or 21.0%, from the corresponding quarter of the previous year. The increase is primarily due to an increase of $6.6 million in net charge-offs from continuing operations. Net charge-offs from continuing operations as a percentage of average net loans on an annualized basis increased from 15.4% in the quarter ended December 31, 2017 to 17.0% in the quarter ended December 31, 2018. The portion of the provision driven by total loans outstanding at December 31, 2018 increased by $1.2 million over the balance at December 31, 2017 due to faster growth in outstanding loans from continuing operations during the third quarter of fiscal 2019. There was a $630.0 thousand increase in the US provision due to an increase during the quarter in US accounts 90 days past due when comparing the third quarter of fiscal 2019 to the third quarter of fiscal 2018.

G&A expenses from continuing operations for the quarter ended December 31, 2018 increased by $12.1 million, or 18.7%, from the corresponding quarter of the previous year. As a percentage of revenues, G&A expenses increased from 51.6% during the third quarter of fiscal 2018 to 55.9% during the third quarter of fiscal 2019. G&A expenses per average open branch increased by 15.9% when comparing the two fiscal quarters. The change in G&A expense is explained in greater detail below.

Personnel expense totaled $47.1 million for the quarter ended December 31, 2018, a $10.6 million, or 29.2%, increase over the quarter ended December 31, 2017. The increase was primarily due to the additional share based compensation associated with the long-term incentive program and director equity awards of $6.2 million as well as $3.8 million related to a 6.8% increase in average full time equivalent employees quarter over quarter.

Occupancy and equipment expense totaled $10.4 million for the quarter ended December 31, 2018, a $0.6 million, or 5.8%, increase over the quarter ended December 31, 2017. Occupancy and equipment expense is generally a function of the number of branches the Company has opened throughout the period. For the quarter ended December 31, 2018, the average expense per branch increased slightly to $8.6 thousand, up from $8.4 thousand for the quarter ended December 31, 2017.

Advertising expense totaled $8.9 million for the quarter ended December 31, 2018, a $1.0 million, or 12.7%, increase over the quarter ended December 31, 2017.

Amortization of intangible assets totaled $0.4 million for the quarter ended December 31, 2018, $101.3 thousand, or 37.4% increase over the quarter ended December 31, 2017, which is due to a corresponding increase in total intangible assets during the comparative periods due to acquisitions.

Other expense totaled $10.2 million for the quarter ended December 31, 2018, a $0.2 million, or 2.0%, decrease over the quarter ended December 31, 2017.

Interest expense for the quarter ended December 31, 2018 decreased by $0.4 million, or 7.3%, from the corresponding quarter of the previous year. The decrease in interest expense was due to a 22.7% decrease in the average debt outstanding, from $337.5 million to $260.8 million. The Company’s debt to equity ratio decreased from 0.8:1 at December 31, 2017 to 0.5:1 at December 31, 2018.

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Other key return ratios for the third quarter of fiscal 2019 included a 7.4% return on average assets and a return on average equity of 11.7% (both on a trailing 12-month basis), as compared to a 6.9% return on average assets and a return on average equity of 12.2% for the third quarter of fiscal 2018.

Comparison of nine months ended December 31, 2018 versus nine months ended December 31, 2017

Gross loans outstanding in the U.S. increased to $1.26 billion as of December 31, 2018, a 11.7% increase from the $1.13 billion of gross loans outstanding as of December 31, 2017. Our unique borrowers in the U.S. increased by 139,105 or 17.8% during the nine months ended December 31, 2018. This is compared to an increase of 101,771 or 13.8% during the nine months ended December 31, 2017.

As previously disclosed, we sold our Mexico operations effective July 1, 2018. As a result of the sale, we have classified the Mexico business as discontinued operations on the statements of operations and balance sheets for the applicable periods. We recognized a $39.0 million impairment loss related to the disposal of our Mexico operations in the first quarter of fiscal 2019, which was subsequently reduced by approximately $600.0 thousand in the second quarter of fiscal 2019. In accordance with GAAP, our testing for, and subsequent recognition of, the impairment was triggered by the change in classification of our Mexico operations from continuing operations to held for sale in the first quarter of fiscal 2019. Of the total initial impairment loss, $31.3 million was directly attributable to the cumulative translation loss on the investment stemming from the devaluation of the Mexican Peso relative to the U.S. Dollar since the date of our investment. In terms of our impairment analysis, the cumulative translation loss effectively increased our investment in our Mexico operations from $51.6 million to $82.9 million, which ultimately resulted in the total initial impairment of $39.0 million to reflect an estimated fair value of $43.9 million. Due to the impairment, net income for the nine months ended December 31, 2018 decreased $25.2 million to a $.7 million loss compared to the $24.5 million of net income reported for the nine months ended December 31, 2017.

Net income from continuing operations for the nine months ended December 31, 2018 increased to $36.0 million, a 53.4% increase from the $23.4 million reported for the same period of the prior year. Operating income (revenue less provision for loan losses and general and administrative expenses) from continuing operations decreased by $8.5 million, or 12.8%.

Revenues from continuing operations increased by $26.3 million, or 7.3%, to $387.5 million during the nine months ended December 31, 2018 from $361.3 million for the same period of the prior year. The increase was primarily due to an increase in average net loans outstanding. Revenues from the 1,143 branches open throughout both nine-month periods increased by 6.9%.

Interest and fee income from continuing operations for the nine months ended December 31, 2018 increased by $23.2 million, or 7.2%, from the same period of the prior year. The increase was primarily due to a corresponding increase in average net loans outstanding. Net loans outstanding at December 31, 2018 increased by 11.3% over the balance at December 31, 2017. Average net loans outstanding increased by 8.8% for the nine months ended December 31, 2018 compared to the nine-month period ended December 31, 2017. We have seen a slight reduction in the overall yield on our portfolio. This is largely due to refinancing a significant portion of our loans with performing customers into larger balance loans with lower rates. We have also reduced our interest rates in certain markets in an effort to increase demand.

Insurance commissions and other income from continuing operations for the nine months ended December 31, 2018 increased by $3.1 million, or 7.7%, from the same period of the prior year. Insurance commissions increased by approximately $2.3 million, or 7.3%, during the nine months ended December 31, 2018 when compared to the nine months ended December 31, 2017. Other income increased by approximately $760.0 thousand primarily due to $370.0 thousand from the preparation of tax returns and $860.0 thousand due to increased customer demand for the Company's motor club product, partially offset by minor reductions in the Company's various other revenue generating activities.

Accounts from continuing operations that were 61 days or more past due on a recency basis increased to 6.0% at December 31, 2018, compared to 5.7% at December 31, 2017. Accounts from continuing operations that were 61 days or more past due on a contractual basis were 7.5% December 31, 2018 compared to 7.3% at December 31, 2017. The Company's allowance for loan losses from continuing operations as a percentage of net loans from continuing operations was 9.9% at December 31, 2018 compared to 9.8% at December 31, 2017.

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The provision for loan losses for continuing operations for the nine months ended December 31, 2018 increased by $18.9 million, or 18.7%, from the same period of the prior year. The increase is primarily due to an increase in net charge-offs from continuing operations of $14.4 million. Net charge-offs from continuing operations as a percentage of average net loans on an annualized basis increased from 14.3% in the nine months ended December 31, 2017 to 15.5% in the nine months ended December 31, 2018. The portion of the provision driven by total loans outstanding at December 31, 2018 increased by $3.0 million over the balance at December 31, 2017 due to faster growth in outstanding loans from continuing operations during the nine-month period ended December 31, 2018. Management also increased the allowance $1.95 million in the second quarter of fiscal 2019 as a result of higher front end delinquencies.

G&A expenses from continuing operations for the nine months ended December 31, 2018 increased by $15.9 million, or 8.2%, from the corresponding period of the previous year. As a percentage of revenues, G&A expenses increased from 53.7% during the first nine months of fiscal 2018 to 54.1% during the first nine months of fiscal 2019. G&A expenses per average open branch increased by 6.5% when comparing the two nine-month periods. The change in G&A expense is explained in greater detail below.

Personnel expense totaled $128.4 million for the nine months ended December 31, 2018, a $12.7 million, or 10.9%, increase over the nine months ended December 31, 2017. The increase was due to the additional share based compensation associated with the long-term incentive program and director equity awards.

Occupancy and equipment expense totaled $30.8 million for the nine months ended December 31, 2018, a $1.7 million, or 6.0%, increase over the nine months ended December 31, 2017. Occupancy and equipment expense is generally a function of the number of branches the Company has open throughout the period. For the nine months ended December 31, 2018, the average expense per branch increased slightly to $25.9 thousand, up from $24.8 thousand for the nine months ended December 31, 2017.

Advertising expense totaled $18.9 million for the nine months ended December 31, 2018, a $1.3 million, or 7.4%, increase over the nine months ended December 31, 2017.

Amortization of intangible assets totaled $0.9 million for the nine months ended December 31, 2018, a $0.2 million, or 24.4%, increase over the nine months ended December 31, 2017, which relates to a corresponding increase in total intangible assets during the comparative periods due to acquisitions over the last twelve months.

Other expense totaled $30.7 million for the nine months ended December 31, 2018, a $28.9 thousand, or 0.1%, decrease over the nine months ended December 31, 2017.

Interest expense for the nine months ended December 31, 2018 decreased by $1.0 million, or 7.3%, from the corresponding nine months of the previous year. The decrease in interest expense was due to a 21.1% decrease in the average debt outstanding, from $315.2 million to $248.5 million. The Company disbursed $17.1 million in cash from its discontinued operations to its continuing operations during the nine months ended December 31, 2018 and used this cash to pay down outstanding debt. The Company’s debt to equity ratio decreased from 0.8:1 at December 31, 2017 to 0.5:1 at December 31, 2018.

Other key return ratios for the first nine months of fiscal 2019 included a 7.4% return on average assets and a return on average equity of 11.7% (both on a trailing 12-month basis), as compared to a 6.9% return on average assets and a return on average equity of 12.2% for the first nine months of fiscal 2018.

The Company’s effective income tax rate for continuing operations decreased to 20.0% for the nine months ended December 31, 2018 compared to 55.3% for the corresponding period of the previous year. The decrease is primarily due to the $10.5 million charge to tax expense related to the revaluing of the deferred tax asset recorded as a discrete item in the prior year quarter, the federal statutory tax rate that was fully integrated during the first nine months of fiscal 2019, and the lapse of the statute of limitations on several items resulting in the Company releasing $1.6 million of reserves during the current year quarter.

Regulatory Matters

Mexico Investigation

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If violations of the FCPA or other local laws occurred, the Company could be subject to fines, civil and criminal penalties, equitable remedies, including profit disgorgement and related interest, and injunctive relief. In addition, any disposition of these matters could result in modifications to our business practices and compliance programs. Any disposition could also potentially require that a monitor be appointed to review future business practices with the goal of ensuring compliance with the FCPA and other applicable laws. The Company could also face fines, sanctions, and other penalties from authorities in Mexico, as well as third-party claims by shareholders and/or other stakeholders of the Company. In addition, disclosure of the investigation could adversely affect the Company’s reputation and its ability to obtain new business or retain existing business from its current customers and potential customers, to attract and retain employees, and to access the capital markets. If it is determined that a violation of the FCPA has occurred, such violation may give rise to an event of default under the Company’s credit agreement if such violation were to have a material adverse effect on the Company’s business, operations, properties, assets, or condition (financial or otherwise) or if the amount of any settlement, penalties, fines or other payments resulted in the Company failing to satisfy any financial covenants. Additional potential FCPA violations or violations of other laws or regulations may be uncovered through the investigation.

Further, under the terms of the Stock Purchase Agreement, we are obligated to indemnify the Purchasers for claims and liabilities relating to certain investigations of our former Mexico operating segment, the Company, and its affiliates by the DOJ or the SEC that commenced prior to July 1, 2018. Any such indemnification claims could have a material adverse effect on our financial condition, including liquidity, and results of operations.

As previously disclosed, the Company sold all of the issued and outstanding capital stock and equity interests of WAC de Mexico and SWAC to the Purchasers, effective as of July 1, 2018, for a purchase price of approximately USD $44.36 million.

Refer to Note 11 to the unaudited consolidated financial statements in this Quarterly Report on Form 10-Q and the Risk Factors in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 and in our Annual Report on Form 10-K for the fiscal year ended March 31, 2018 and in our other reports filed with, or furnished to, the SEC from time to time for additional information.

CFPB Rulemaking Initiatives

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 requires 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 requirements”). 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”). The final Rule has significant differences from the CFPB’s proposed rules announced on June 2, 2016, relating to payday, vehicle title, and similar loans. The Company does not believe that the CFPB's final rule will have a material impact on the Company’s existing lending procedures, because the Company currently does not make short-term consumer loans or longer-term consumer installment loans with balloon payments that would subject the Company to the Rule’s ability to repay requirements. To the extent that the Rule’s payment requirements would apply to the Company’s loans, the Company does not believe that these requirements would have a material impact on the Company’s lending procedures.

The CFPB also has stated that it expects to conduct separate rulemaking to identify larger participants in the installment lending market for purposes of its supervision program. Though the timing of any such rulemaking is uncertain, the Company believes that the implementation of such rules would likely bring the Company’s business under the CFPB’s supervisory authority which, among other things, would subject the Company to reporting obligations to, and on-site compliance examinations by, the CFPB.

See Part I, Item 1, “Business - Government Regulation - Federal legislation” and Part I, Item 1A, “Risk Factors” in the Company’s Form 10-K for the year ended March 31, 2018 for a further discussion of these matters and federal regulations to which the Company’s operations are subject.

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Liquidity and Capital Resources

The Company has 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. 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.

The Company continues to believe that repurchases of common stock are a viable component of the Company’s long-term financial strategy and an excellent use of excess cash when the opportunity arises. However, the Company's amended credit facility limits share repurchases to 50% of consolidated adjusted net income in any fiscal year commencing with the fiscal year ended March 31, 2017.

Expenditures by the Company to open and furnish new branches averaged approximately $41,000 per branch during fiscal 2018. New branches have also required from $100,000 to $400,000 to fund outstanding loans receivable originated during their first 12 months of operation. During the nine months ended December 31, 2018, the Company opened 21 new branches, acquired 14 branches and merged 8 branches into existing branches.

The Company acquired 14 branches through business combinations during the first nine months of fiscal 2019. The Company may acquire new branches or receivables from its competitors or acquire branches in communities not currently served by the Company if attractive opportunities arise as conditions in local economies and the financial circumstances of owners change.

The Company has a revolving credit facility with a syndicate of banks. The revolving credit facility provides for revolving borrowings of up to the lesser of (a) the aggregate commitments under the facility and (b) a borrowing base, and includes a $300.0 thousand letter of credit subfacility. At December 31, 2018, the aggregate commitments under the credit facility were $480.0 million. The borrowing base limitation is equal to the product of (a) the Company’s eligible finance receivables less unearned finance charges, insurance premiums and insurance commissions, and (b) an advance rate percentage that ranges from 79% to 85% based on a collateral performance indicator, as more completely described below. Further, the administrative agent under the revolving credit facility has the right at any time, and from time to time in its permitted discretion (but without any obligation), to set aside reasonable reserves against the borrowing base in such amounts as it may deem appropriate, including, without limitation, reserves with respect to regulatory events or any increased operational, legal or regulatory risk. The maturity date under the revolving credit agreement is June 15, 2020.

On December 14, 2018, the Company amended its revolving credit agreement to, among other things: (i) amend the accordion feature to permit a maximum of aggregate commitments of $600,000,000 (increased from $500,000,000), provided that certain conditions are met; (ii) modify the per annum interest rate on borrowings under the revolving credit agreement from 4.0% to an initial fixed rate of 4.0% until delivery of the Company’s monthly reports for the month ending December 31, 2018, after which the interest rate will be equal to one-month LIBOR plus an applicable margin between 3.0% and 4.0% based on certain EBITDA related metrics referenced in the agreement, which will be determined and adjusted on a monthly basis; (iii) add new definitions for certain EBITDA related metrics, which will be used to determine the applicable margin on a monthly basis; (iv) provide that if any change in GAAP results in a change in the calculation of a pricing grid, the parties will negotiate in good faith to amend the pricing grid; and (v) require consolidated balance sheets and consolidated statements of income and retained earnings for the Company and certain of its subsidiaries to be provided to the administrative agent on a monthly basis.

Prior to the December 2018 amendment, funds borrowed under the revolving credit facility accrued interest at the LIBOR rate plus 4.0% per annum. The revolving credit agreement continues to impose a minimum rate of 4.0% per annum. During the nine months ended December 31, 2018, the effective interest rate, including the commitment fee and amortization of debt issuance costs, on borrowings under the revolving credit facility was 6.8%. The Company pays a commitment fee equal to 0.50% per annum of the daily unused portion of the commitments. On December 31, 2018, $308.0 million was outstanding under this facility, and there was $171.7 million of unused borrowing availability under the borrowing base limitations.

The Company’s obligations under the revolving credit facility, together with treasury management and hedging obligations owing to any lender under the revolving credit facility or any affiliate of any such lender, are required to be guaranteed by each of the Company’s wholly-owned domestic subsidiaries. The obligations of the Company and the subsidiary guarantors under the revolving credit facility, together with such treasury management and hedging obligations, are secured by a first-priority security interest in substantially all assets of the Company and the subsidiary guarantors.

The agreement governing the Company’s revolving credit facility contains affirmative and negative covenants, including covenants that restrict the ability of the Company and its subsidiaries to, among other things, incur or guarantee indebtedness, incur liens, pay dividends and repurchase or redeem capital stock, dispose of assets, engage in mergers and consolidations, make acquisitions

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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 also contains financial covenants, including a minimum consolidated net worth of $330.0 million plus 50% of the borrowers' consolidated net income for each fiscal year beginning with 2017, a minimum fixed charge coverage ratio of 2.5 to 1.0, a maximum ratio of total debt to consolidated adjusted net worth of 2.0 to 1.0, and a maximum ratio of subordinated debt to consolidated adjusted net worth of 1.0 to 1.0. The agreement allows the Company to incur subordinated debt that matures after the termination date for the revolving credit facility and that contains specified subordination terms, subject to limitations on amount imposed by the financial covenants under the agreement.

In addition, the agreement establishes a maximum specified level for the collateral performance indicator. The collateral performance indicator is equal to the sum of (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 was in compliance with these covenants at December 31, 2018 and does not believe that these covenants will materially limit its business and expansion strategy.

The agreement contains events of default including, without limitation, nonpayment of principal, interest or other obligations, violation of covenants, misrepresentation, cross-default to other debt, bankruptcy and other insolvency events, certain judgments, certain ERISA events, actual or asserted invalidity of loan documentation, invalidity of subordination provisions of subordinated debt, certain changes of control of the Company, and the occurrence of certain regulatory events (including the entry of any stay, order, judgment, ruling or similar event related to the Company’s or any of its subsidiaries’ originating, holding, pledging, collecting or enforcing its eligible finance receivables that is material to the Company or any subsidiary) which remains unvacated, undischarged, unbonded or unstayed by appeal or otherwise for a period of 60 days from the date of its entry and is reasonably likely to cause a material adverse change. If it is determined that a violation of the FCPA has occurred, as described above in "—Regulatory Matters—Mexico Investigation" and in Part I, Item 3, "Legal Proceedings—Mexico Investigation" in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2018, such violation may give rise to an event of default under our credit agreement if such violation were to have a material adverse effect on our business, operations, properties, assets, or condition (financial or otherwise) or if the amount of any settlement, penalties, fines or other payments resulted in the Company failing to satisfy any financial covenants.

The Company believes that cash flow from operations and borrowings under its revolving credit facility or other sources will be adequate to fund the expected cost of opening or acquiring new branches, including funding initial operating losses of new branches and funding loans receivable originated by those branches and the Company's other branches (for the next 12 months and for the foreseeable future beyond that). Except as otherwise discussed in this report and in the Company’s Form 10-K for the year ended March 31, 2018, including, but not limited to, any discussions in Part I, Item 1A, "Risk Factors" (as supplemented by any subsequent disclosures in information the Company files with or furnishes to the SEC from time to time), management is not currently aware of any trends, demands, commitments, events or uncertainties that it believes will or could result in, or are or could be reasonably likely to result in, any material adverse effect on the Company’s liquidity.

Share Repurchase Program

On December 16, 2018, the Board of Directors authorized the Company to repurchase up to $75.0 million of the Company’s common stock, inclusive of the amount that remains available for repurchases under the prior repurchase authorization of $25.0 million announced on March 11, 2015. The stock repurchases made pursuant to this authorization will be effected from time to time pursuant to a Rule 10b5-1 plan. As of December 31, 2018, the Company has $73.1 million in aggregate remaining repurchase capacity. The timing and actual number of shares of common stock repurchased will depend on a variety of factors, including the stock price, corporate and regulatory requirements, restrictions under the revolving credit facility and other market and economic conditions.

The Company continues to believe that common 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. However, our revolving credit facility limits share repurchases to 50% of consolidated adjusted net income in any fiscal year commencing with the fiscal year ended March 31, 2017. Our first priority is to ensure we have enough capital to fund loan growth. As of December 31, 2018, the Company's debt outstanding was $308.0 million and its shareholders' equity was $574.1 million, resulting in a debt-to-equity ratio of 0.5:1.0. 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.

Inflation

The Company does not believe that inflation, within reasonably anticipated rates, will have a material, adverse effect on its financial condition. Although inflation would increase the Company’s operating costs in absolute terms, the Company expects that the same decrease in the value of money would result in an increase in the size of loans demanded by its customer base. We anticipate that

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such a change in customer preference would result in an increase in total loans receivable and an increase in absolute revenue to be generated from that larger amount of loans receivable. That increase in absolute revenue should offset any increase in operating costs. In addition, because the Company’s loans have a relatively short contractual term, it is unlikely that loans made at any given point in time will be repaid with significantly inflated dollars.

Quarterly Information and Seasonality

See Note 3 to the unaudited Consolidated Financial Statements.

Recently Adopted Accounting Pronouncements

See Note 3 to the unaudited Consolidated Financial Statements.

Critical Accounting Policies

The Company’s accounting and reporting policies are in accordance with GAAP and conform to general practices within the finance company industry. Certain 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, revenue, 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 loan losses, share-based compensation and income taxes to be its most critical accounting policies due to the significant degree of management judgment involved.

Allowance for Loan Losses

The Company has developed processes and procedures for assessing the adequacy of the allowance for loan losses that take into consideration various assumptions and estimates with respect to the loan portfolio. The Company’s assumptions and estimates may be affected in the future by changes in economic conditions, among other factors. Additional information concerning the allowance for loan losses is discussed under Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Credit Quality” in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2018.

Share-Based Compensation

The Company measures compensation cost for share-based awards at fair value and recognizes compensation over the service period for awards expected to vest. The fair value of restricted stock is based on the number of shares granted and the quoted price of the Company’s common stock at the time of grant, and the fair value of stock options is determined using the Black-Scholes valuation model. The Black-Scholes model requires the input of highly subjective assumptions, including expected volatility, risk-free interest rate and expected life, changes to which can materially affect the fair value estimate. Actual results and future changes in estimates may differ substantially from the Company’s current estimates.

Income Taxes

Management uses certain assumptions and estimates in determining income taxes payable or refundable, deferred income tax liabilities and assets for events recognized differently in its financial statements and income tax returns, and income tax expense. Determining these amounts requires analysis of certain transactions and interpretation of tax laws and regulations. Management exercises considerable judgment in evaluating the amount and timing of recognition of the resulting income tax liabilities and assets. These judgments and estimates are re-evaluated on a periodic basis as regulatory and business factors change.

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, state, or foreign taxing authorities. The Company is subject to potential adverse adjustments, including but not limited 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.

Under FASB ASC Topic 740, the Company will include the current and deferred tax impact of its tax positions in the financial statements when it is more likely than not (likelihood of greater than 50%) that such positions will be sustained by taxing authorities, with full knowledge of relevant information, based on the technical merits of the tax position. While the Company supports its tax positions by unambiguous tax law, prior experience with the taxing authority, and analysis of what it considers to be all relevant

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facts, circumstances and regulations, management must still rely on assumptions and estimates to determine the overall likelihood of success and proper quantification of a given tax position.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

Interest Rate Risk

As of December 31, 2018, the Company’s financial instruments consisted of the following: cash and cash equivalents, loans receivable and senior notes payable. Fair value approximates carrying value for all of these instruments. Loans receivable are originated at prevailing market rates and have an average life of approximately eight months. Given the short-term nature of these loans, they are continually repriced at current market rates.

The Company’s outstanding debt under its revolving credit facility was $308.0 million at December 31, 2018. Interest on borrowing under this facility is based on the greater of 4.0% or one month LIBOR plus an applicable margin between 3.0% and 4.0% based on certain EBITDA related metrics. Based on the outstanding balance at December 31, 2018, a change of 1.0% in the interest rates would cause a change in interest expense of approximately $3.1 million on an annual basis.

Foreign Currency Exchange Rate Risk

Until the sale of its foreign subsidiaries, effective as of July 1, 2018, the Company held branches in Mexico, where its local businesses utilized the Mexican peso as their functional currency. The consolidated financial statements of the Company are denominated in U.S. dollars and were, therefore, impacted by changes in the U.S. dollar to Mexican peso exchange rate until the sale of the Company's foreign subsidiaries. As a result of such sale, the Company is not currently subject to foreign currency exchange rate risk and a change in the U.S. dollar to Mexican peso exchange rate as of December 31, 2018 would not be material to the Company's unaudited consolidated financial statements.

Item 4. Controls and Procedures

Changes in Internal Control over Financial Reporting

There were no changes to our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Evaluation of Disclosure Controls and Procedures

Based on management’s evaluation, with the participation of our CEO and CFO, as of the end of the period covered by this report, our CEO and CFO have concluded that our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, are effective to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and is accumulated and communicated to management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

See Note 11 to the unaudited Consolidated Financial Statements for information regarding legal proceedings.

Item 1A. Risk Factors

Other than as set forth in Part II, Item 1A of the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2018, there have been no material changes to the risk factors disclosed in Part I, Item 1A of the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2018.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The Company's credit agreements contain certain restrictions on the payment of cash dividends on its capital stock. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources."

Since 1996, the Company has repurchased approximately 18.2 million shares for an aggregate purchase price of approximately $862.6 million. On December 17, 2018, the Company announced the Board of Directors had authorized a program to repurchase up to $75.0 million of the Company’s common stock, inclusive of the amount that remains available for repurchases under the prior repurchase authorization of $25.0 million announced on March 11, 2015. As of December 31, 2018, the Company has $73.1 million in repurchase capacity remaining under this authorization. The repurchase authorization does not have a stated expiration date. The following table details purchases of the Company's common stock, if any, made by the Company during the three months ended December 31, 2018:



	(a) Total number of shares purchased	(b) Average price paid per share		(c) Total number of shares purchased as part of publicly announced plans or programs	(d) Approximate dollar value of shares that may yet be purchased under the plans or programs
October 1 through October 31, 2018	—	$	—	—	$	1,906,179
November 1 through November 30, 2018	—	—		—	1,906,179
December 1 through December 31, 2018	38,822	96.83		38,822	73,147,034
Total for the quarter	38,822	$	96.83	38,822

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

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Item 6. Exhibits

The exhibits listed in the accompanying exhibit index are filed as part of the Quarterly Report on Form 10-Q.

EXHIBIT INDEX

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Exhibit Number	Exhibit Description		Filed Herewith	Incorporated by Reference
Exhibit Number	Exhibit Description		Filed Herewith	Form or Registration Number	Exhibit	Filing Date
2.01	Stock Purchase Agreement, effective as of July 1, 2018, by and among World Acceptance Corporation, WFC Services Inc., WAC Mexico Holdings LLC, Astro Wealth S.A. de C.V., and Astro Assets S.A. de C.V.			8-K	2.1	08-03-18
3.01	Eighth Amended and Restated Bylaws of World Acceptance Corporation (File No. 000-19599)			10-K	3.01	11-08-18
10.01	Twelfth Amendment to Amended and Restated Revolving Credit Agreement, dated as of June 1, 2018			8-K	10.1	06-01-18
10.02⁺	Form of Restricted Stock Award (Service-Based) Agreement under the 2011 Plan			8-K	10.1	10-16-18
10.03⁺	Form of Restricted Stock Award Agreement (Service-Based) under the 2017 Plan			8-K	10.2	10-16-18
10.04⁺	Form of Restricted Stock Award Agreement (Service- and Performance-Based) under the 2011 Plan			8-K	10.3	10-16-18
10.05⁺	Form of Restricted Stock Award Agreement (Service- and Performance-Based) under the 2017 Plan			8-K	10.4	10-16-18
10.06⁺	Form of Stock Option Agreement under the 2011 Plan			8-K	10.5	10-16-18
10.07⁺	Form of Stock Option Agreement under the 2017 Plan			8-K	10.6	10-16-18
10.08⁺	Employment Agreement, dated October 15, 2018, by and between R. Chad Prashad and World Acceptance Corporation			8-K	10.7	10-16-18
10.09⁺	Amendment to Employment Agreement, dated October 15, 2018, by and between John L. Calmes, Jr. and World Acceptance Corporation			8-K	10.8	10-16-18
10.10⁺	Amendment to Employment Agreement, dated October 15, 2018, by and between D. Clinton Dyer and World Acceptance Corporation			8-K	10.9	10-16-18
10.11⁺	Offer Letter, dated July 9, 2018, for Luke J. Umstetter			10-K	10.02	11-08-18
10.12	Thirteenth Amendment to Amended and Restated Revolving Credit Agreement, dated as of December 14, 2018			8-K	10.1	12-14-18
31.01	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer		*
31.02	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial and Strategy Officer		*
32.01	Section 1350 Certification of Chief Executive Officer		*
32.02	Section 1350 Certification of Chief Financial Officer		*
101.01	The following materials from the Company's Quarterly Report for the fiscal quarter ended December 31, 2018, formatted in XBRL:		*
	(i)	Consolidated Balance Sheets as of December 31, 2018 and March 31, 2018;
	(ii)	Consolidated Statements of Operations for the three and nine months ended December 31, 2018 and December 31, 2017;
	(iii)	Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended December 31, 2018 and December 31, 2017;
	(iv)	Consolidated Statements of Shareholders' Equity for the three and nine months ended December 31, 2018 and December 31, 2017;
	(v)	Consolidated Statements of Cash Flows for the nine months ended December 31, 2018 and December 31, 2017; and
	(vi)	Notes to the Consolidated Financial Statements.



*	Submitted electronically herewith.
+	Management Contract or other compensatory plan required to be filed under Item 6 of this report and Item 601 of Regulation S-K of the Securities and Exchange Commission.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



WORLD ACCEPTANCE CORPORATION

	By: /s/ R. Chad Prashad
	R. Chad Prashad
	President and Chief Executive Officer
	Signing on behalf of the registrant and as principal executive officer
	Date:	February 11, 2019

	By: /s/ John L. Calmes, Jr.
	John L. Calmes, Jr.
	Executive Vice President and Chief Financial and Strategy Officer
	Signing on behalf of the registrant and as principal financial officer
	Date:	February 11, 2019

	By: /s/ Scott McIntyre
	Scott McIntyre
	Senior Vice President of Accounting
	Signing on behalf of the registrant and as principal accounting officer
	Date:	February 11, 2019