WRLD - Earnings call transcript Q2 2021 | World Acceptance Corporation

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Operator

Good morning, and welcome to the World Acceptance Corporation-sponsored Second Quarter Press Release Conference Call. This call is being recorded. [Operator Instructions] Before we begin, the corporation has requested that I make the following announcements. The comments made during this conference call may contain certain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 that represent the corporation's expectations and beliefs concerning future events. Such forward-looking statements are about matters that are inherently subject to risks and uncertainties. any of words as expect, forward-looking anticipate, will should those identified as believe, statements. than foregoing and the the by estimate, or other historical expressions well fact those may, and Statements similar of are variation intend, plan,

or earnings ended or in Additional from results Prashad, today's obligation implied the any turn forward-looking year statements your with release SEC time filed forward-looking are statements included to in paragraph the this section reports cause forward-looking statements it from discussing time. Risk host, in to differ to regarding fiscal Chad most of update makes. any does Chief factors and such Officer. to information it could and in to XX, the the and the any forward-looking for pleasure that March At recent is The press my and subsequent undertake actual the the or performance furnished expectations expressed Factors time, over Executive to corporation XX-K President floor Form statements corporation's XXXX, not

Chad Prashad

Good is morning. Chad Prashad. This

Our Chief with I this to is you've John Financial Officer, well. time this as review Strategy all had release morning. Calmes, trust our morning me and

So any I'd open questions at and Thank like for this time, it that have. up to ahead go you. you may

Operator

from of Jefferies. be Joseph question Kyle Instructions] will first [Operator The

Kyle Joseph

outlook but going down how Can quarter is know saw for the on you still for a book year-over-year, nice you us forward? through demand sense question sequential First loan volumes the I in give growth. a and is trended uptick volumes. the

Chad Prashad

Sure. Yes.

around ended customer a than well, a September steady quarter. XX% over a give overall, was sense last July August of from for it somewhere about we're quarter, To in former continued in through increase demand year. definitely X% the the So an increase September. seeing you through -- returned, sequentially uptick higher

there. risk any One, also, a going and when customers. a some from out there's underwriting for But we be intentionally bit of may made for the customer new changes demand unforeseen the began, that couple new volume quite lower application adjust On in general pandemic on there's things there. side, just to

QX month application throughout seen volume in well as QX. each increase have throughout We

return we're beginning levels. to to normal so And see those closer

New customers year-over-year. were in And was down closer whereas sequentially X/X only XX% down to in that around September. around XX% is closer to July,

So to we're volume begin demand uptick new as in see customers' well.

refinance. overall, around a who side, so On refinance the customers a steady or of book are the eligible rather The percent to perspective of book is refinances. overall is from a percent down and volume XX%

what not may So to future, in a given come stimulus has do that, it future lot that for with overall of the may unemployment. we see or

So to seen. remains that be

that back will new overall being summer, throttle throughout did bit out and customer efforts we down. the on side, point a ahead On due our to demand marketing go I the just

of allocating And sure has prudent wisely. marketing those so very the be make we'll investments to continue we to dollars see as our that risen, cost with we're acquisition

volume that customer saw until returns wouldn't acquisition cost a we the to new it prior what of return expect to to the see So in I was overall pandemic. to past back

Kyle Joseph

is you kind right sense of us more on when additional today, for macroeconomic your would there's stimulus that unemployment you of, credit given charge-offs the And likely now? is, net where That's in of can the give to of on kind delinquencies obviously, actual where helpful. it. of seeing net reflect a expect if -- of you're of but obviously, opposite lot kind but based kind side kind what charge-offs, driven, that, no Got -- then stimulus and good delinquencies terms of backdrop

Chad Prashad

well. say, to if chime Yes. in first. Johnny he has anything wants in he can And as I'll chime

quite shifted where year. has we portfolio were a the overall, last bit from So

increased we'd portfolio growth. were new pointing the we acquisitions, existing customer the we backside new company year, aggressive same, weighting it as risk as side portfolio QX, the due So acquisitions or than associated the on customers, customer risks early customers. on new is as the customer off on to out, last the the new well the pretty So as year, of The X We're portfolio were side. within And on the increased most that while to of with the of quarters right? of the growing was the throughout side new payoffs X of customer stages saw come overall fairly rapidly.

we've the certainly and so our portfolio a in towards really complete shift lower risk customers. tenured of weighting And seen more

portfolio forward, seeing today. risk going the in to see it what how weighted the is long it as be to performs, would from expect as terms probably fairly So we're of is today, the overall, similar we way what

at to customers year last put continue should are on expectation just new the year and levels increases we who the more of to to grow back risk customers, be the As and the more portfolio and emphasis risky. new that due were whole before, we return

something been to XX the well, quarters. that fairly we've X that's doing last So for I think,

things the a on good he wants. a are a CECL from grasp loss forward, impacts there's And pretty from what have going loss perspective, of can those lot unforeseen. be. Johnny We that talk But here, a should expectations then perspective about if

just for have we those provisions unforeseen increased things. So

Kyle Joseph

Got it. probably Last Very more me, helpful. for X Johnny. from

-- there it due give look reserve on on of was quarter. impact like just but loans. the doesn't quarter, the for reason you Can Just any like the XX-Q on amendment? it would Last anything, amendment what kind or went the And it there? was on for a the sense there past us looks in if

John Calmes

a shift how in it reporting. internal was Yes, just Yes. our

but before end. month month end we So the up end with we picked versus month the the changes the was reporting. end around all total correct, delinquency and reporting after And month some reporting before after just have CECL,

pulled that disclosure. used numbers were numbers just the change for for the didn't that the was It it said, you as provisioning. So we the

that. corrected we So

Kyle Joseph

And can a us last Okay. the is this the sense delinquencies performance basis Or Do that me. sorry, there you give mirror then contractual Understood. have you recency X for kind if DQs? of for us? actually, not,

John Calmes

did. They

on XX-day X.X% September was year. So due versus past last X.X% delinquency, June at September at X% the contractual at and it

Operator

Rowan is from John question with Janney. Next

John Rowan

be older to I you that performing the clear, said correct? portfolio I do increased better just mean, have you the you customers, So age in Is though, mean, new some must release that your say is had on you Because that you but anticipated? reserves than on provisioning released accounts.

John Calmes

Right.

net XX-day is our the what thing biggest the from the right? quarter, decreased XX-day decreased the $XX.X that fact why right, So portfolio, million recency happened So the when provision million. driving delinquency due the look that June, you and past in -- $X.X less at so than the is during -- charge-offs,

to So that's obviously, allowance, X% decrease, moving the from decreasing right? expect that because future of to we So therefore, lower, charge-offs significantly X.X%. be

John Rowan

fine. right? That's aged on But all That's that's customers? new not stuff,

John Calmes

Right.

we months the allowance in it that's tenure So tenure ago, when we the customers picture, fewer you to the losses. that's So look at so into buckets, today at because X break as still the XX, the to CECL the a to right, base over June including the an calculate right? have percent have million much you mix so versus Obviously, overall that an model XX, as we at September XX when our look well. model, right? down bucket. bring million $XX.X bucket so we the customer portfolio, with allowance -- is X going additional way right, added additional potential we But adjustments At base over X-month $XX.X

place conservative So place, we the like standpoint. we're still in feel a pretty from a allowance good

John Rowan

trying there's pull a reserved noncash. that if point. a not push rate and for. suggest to I'm provision it you're -- that's because that difference at my just looking you're earnings run to That's under only I'm makes

So me. just last question for

much Given fall the count quarter, you back. the actually in as share diluted as bought didn't the repurchases nearly

the ways if repurchases, What were X have dilutive count looks was next the what repurchases? would quarter. even share been? of So timing Because share maybe your the like fall the And/or share you will quarter the into don't share question. do answer today, end count it if again to to

John Calmes

Right.

So will was diluted as right, know, the share of now the that dilutive since higher our back repurchases that quarter. you were the But will it shares, count fact much just back of the then, than it math. towards the the is end weighted be number share price through also impacting, increase

could impacting assume But that's on typical adding as up it shares you shares. in -- the million. and $X.X I think So well. depending at were XXX,XXX The will the share impact down dilutive the price. estimate move that obviously, for outstanding A quarter

John Rowan

mean, I And good think And much are the if is are of you number? that's just that a you just frequent is, get probably do to going tell Whatever can us, number Because small Board. covenants you us repurchase? a gauge that but from percentage What X good get a net the Okay. I more. you that tend you use how to authorizations it's dictate whatever then can income, tell forward?

to just next the make share reflect we sure want year. so of I through And possibility repurchase

John Calmes

what available tell can I Yes. of we you where have – as today.

we So this in that October. repurchases includes did

October. another So million we $XX.X repurchased in

the XX% available that the QX add to of QX under our to be and of of debt today, can income, we added extent right? that repurchase. we $X whatever have million $XX So million. agreement, build That through consolidated will So definitely XX% in we will

Operator

Vincent Caintic of Stephens. from The next comes question

Vincent Caintic

Just for But to well customer plan follow-up mix Kyle's as right at absent is from the performance going offs, number shift originations? modeling, charge good a the this macro first as is forward XX.X%, looking restart -- so quarter But your the that questioning. to thinking and new be great performance.

John Calmes

that's all I yes, right? But a the get starting second it's a estimate, portfolio sort good that's make there. mix this can the macro point, And to I and and think from if impact level. Right. there's assumptions half yes, So level portfolio of -- mix a a you stays from things fair Obviously, right? same, think tricky,

Vincent Caintic

Okay.

us mix, a give to like then be so And returning charge you a -- much a sense customers XX.X%, portfolio whatever would a or build how add, net rate, charge-off according a when remodel good. is off? of should sort that, of existing can new new originating of customer you is kind is net to -- -- through the Sounds on what the customer you expecting there

John Calmes

new customer. About Obviously, I be a will to, clarity that. It's average customer, higher guess, than typically higher around Vincent. their question, don't We that. disclose much model provide rate focus us. charge-off begin are who much customers introduced year and net some more certainly we than a riskiest Yes. But the to we great on able and customers customers the believe coming And throttle underwriting back are an ago, for been we've throughout risky to to least specifically. the panic, new on the all turning what

pull and been can we So there that have pulling. are some levers

the So there's in the optionality future.

So as in certainly and we overall economy, appetite an to began things as again increase there's on going for stabilize, risk just side. growing be the

the to any other I you changes, of changes the new But we safe expect of willing see that also probably there terms absence for similar and But fairly it's terms in in course, we of on of take in solicit future. we're to be Just what in say now, the customers fairly to to. customers that macroeconomic it's today. think will

Vincent Caintic

makes sense. That Okay.

John Calmes

And in Vincent, right? old move old company loss get be. that you right? -- an that it's you rate, not an month what the right? earnings is year but into loss year it what the X to that X be, X of you our can that rate right. drops linear, Obviously, of idea in customer, have from as customer what customer But So might can get So the less impact significantly overall ratios than release, relative rate of may we idea

Vincent Caintic

you. Got

Okay.

in and a is of the yield power On coming credit there, there competition? -- pricing little in yield this you has Are bit. Is you out as able lot been there see of a better? to hold now market environment? down even getting your Do your the terms has -- been

John Calmes

Yes. I can that start one.

and again, is higher really we're are just pricing new on thing, it's obviously the that, So pricing customers. yield customers is, our for riskiest mean, So the driving same customers new right? our those the right? what's decreasing I So

to the So $X,XXX are as loan and decreased yield right? loan, new So our the larger move XX% under from this XX% customers small overall loans not decision right? simply we over year, in to portfolio which a And fewer a fewer has at little September to is a has the new September made It's at portfolio, customers. of brought has decreased, in bringing year that's of that shifted we last upmarket. result a

Vincent Caintic

And just for helpful. makes Very last sense. me. Okay. That question

get to able -- and you've had you've So financing maintain been your portfolio.

And marketing, past, market there? Just then smaller acquisitions, the maybe there been market there more rest the advantage acquisitions? is particularly and players portfolio portfolio take be guess, can the doing how and for of for might who out a wondering struggling the players, in you've of other I you

Chad Prashad

Yes. I’ll absolutely, start yes, is there still this. a And market there.

were think in as been interesting the in market of throughout acquisitions there beginning QX, weren’t we’re some the on they I to the But past. players had early are quarter. as prevalent this and interest who quite smaller see some potentially more in

emphasis the have We acquisitions the a growth of acquisitions we but continue importance summer, few of the order strategy, closed same. the of do to in and see portfolio seems roughly there focused as pipeline amount those We future. this a do our overall in to part be fair long-term have

Operator

Financial. next be Philadelphia from The will of Hymowitz Jordan question

Jordan Hymowitz

XX% below about of are your loans balanced now $X,XXX? small loans said You

John Calmes

right. That's

Jordan Hymowitz

assume definition of military above all And would would XX% lending I the those XX%? that be

John Calmes

no. have necessarily, front of don't we But breakdown in that Not us.

Jordan Hymowitz

percent about generally Military Act above then Okay. of your How Lending the -- are what originations XX%? of

John Calmes

But are riskiest our obviously Yes. now, customers. right of right, not lower, originating lot a that customers loans we're new to given who it's

I of front don't So information in us. have

Jordan Hymowitz

probably are? think, you least given that's of most your where would don't XX%, be small loans it But at

John Calmes

larger Not that if you of on those lot are include look right? loan refinances, a that at total refinances originations portfolio. So

originations if a it new new look higher rate. higher likely – a So interest you would at be to bars,

Operator

back session. And Prashad over this the question-and-answer remarks. any our now for turn closing would concludes like Mr. to I conference to

Chad Prashad

team look quarter and of contending care I’d spring the like call. serve also second year. the our and our to next appreciate the so chatting at thank this I time exceptionally, the the interest for earnings us joining and to take of in to to for members World, again World all summer the especially communities, Thanks forward throughout questions for and quarter.

Operator

quarterly participation. the your World This for Acceptance concludes you Thank Corporation teleconference.

You disconnect may now

World Acceptance (WRLD) 22 Oct 202021 Q2 Earnings call transcript