WRLD - Earnings call transcript Q3 2021 | World Acceptance Corporation

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Operator

Good morning, and welcome to the World Acceptance Corporation Sponsored Third Quarter Press Release Conference Call. This call is being recorded. [Operator Instructions].

Before we begin, the corporation has requested that I make the following announcement. The comments made during this conference 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. by about statements are historical may, other well forward-looking those are risks subject fact will, statements estimate, statements. or as uncertainties, anticipate, similar any and than identified the and forward-looking should, matters expect, variation inherently that to as intend, and Such plan, words of believe, foregoing the those are of expressions

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

Chad Prashad

thank call. and for morning, you our earnings for Good joining third quarter us

quarter our third begin, we the Calendar members. team XXXX company of our thank I year, history. was in all and the Before would very to like big to busiest a you a challenging quarter extend was

our we served helping of customers. So and I as navigate being to to these you flexible, from communities challenges and all thank want our dedicated

questions. we'll So, open thank that, And you, it up for team. with

Operator

with will Kyle Joseph first come [Operator Instructions]. Jefferies. our question And from

Kyle Joseph

on for reserve, incremental the your I the there incremental impacts Just and -- loan magnitude of and us noticed if remains timing sense a you stimulus your just thoughts there, factored on could on uncertainty demand? some terms just the in give you potential into stimulus -- but

John Calmes

Sure. impacts going allowance, let and of to of like rates. what quantitative we the to the unemployment to and weren't on Through sort higher the of the demand additional to needed that is speak unemployment second forward. a I'll quarter, mean as any -- speak of those quarter, reserve up we still looking there tied specifically felt I can the longer. given might the the federal Chad pandemic some And the how around stimulus, and lasts But end losses. forward, long uncertainty built

until conservative bit have So the we range the a the of on still there's more little -- allowance end we've certainty. kept

Chad Prashad

going with saw demand into began company to history. to first to which the customers highest quarter, as going drop we former demand see Yes, several we've had forward the in precipitous pretty months demand April, in but as stimulus our third demand -- was rebound round for yes, later then it a forward, on

stimulus likely another A round depends the package though it's it's to but looks as with we've time, just delayed early lot too recently, that for this exactly on some So of be tell. it period of seen like. of what stimulus,

Kyle Joseph

I And the on last potential passed from for X it. Can Illinois Got week. business Illinois follow-up the guys and impacts your appreciate then Bill? me. that. exposure quantify some you legislation

Chad Prashad

Sure.

already legislation that can in the new So Illinois sub it customers weeks, we serving to law did being coming of pass In pivoted signed the XX%. some serve have in last week. only anticipation we

base in to XX% of doing week on sub customer pivot the we it to first that our that So of an Illinois that. loan have to be XX% throughout it's months our will in to serve we're full weeks will But quickly in business longer be swiftly used to Illinois we will there. able and couple grow roughly We able and no the Illinois. and that serve recognize confident impact larger we of very next

be grow these in is, states the sub equation to large able to this XX% other take states and our One well. learnings other pieces spread loans as in other business of we'll it Illinois to and

Kyle Joseph

that brings up other Actually, I that your loan loan me. you your more was for noticed down count it. on balances. the Got X larger question balances? Is result of a than focusing customer guys

Chad Prashad

quarter specifically. a really minimal had And very customers That in refinances. Not really quarter of new decreased and customers is to It's from loans question. our loans demand. most demand a and the second result of where first good were former throughout we

are quarter biggest for third third Those had to customers. new in quarter, be loans than ever. former going our customers So typically we our larger much

customer did rebound. New year-over-year. XX%, was down about XX% demand And it

typically loan are smaller However, larger loans. -- those

portfolio So higher our Most of towards of were the larger re-rating demand it's a customers quality who loans. asking credit again. was for

Operator

Our Janney. next from question will Rowan come with John

John Rowan

on by above the question Illinois. don't the in very provisions are are in state of Are Kyle's you that was XX% it's preclude that outstanding from Are believe signed you on law yet. Governor Illinois? collecting Follow-up law loans abruptly. the I that obviously currently -- the there this passed

John Calmes

No.

obviously, So passed loans the prior are be the hasn't originated still yes, collectible. that to loans yet, that but loans legal that been fully will originated --

John Rowan

because have I mean confusing read sure March, -- about that And gave? as things. you million bill, of $XX number I Or above to want like Sure. the you million those had of are -- the make links That's just the comments, of based receivables is customers it's it's on there's other what, and you XX%? XX% you XX%. to I it's because super $XX said Illinois. your in amendments

Chad Prashad

So in credit and model increase on that a with we're going business that risk Illinois, we is loans as new their of to our interest is originate themselves, prove lower customer So take line we'll new and rate. right? they XX% XX% their

pivoting Illinois solicitations as above But growth or customer to relating that's new we're well effort, bring towards as are growth to ability well. acquisitions that the and below base and we that have in -- So going customers on new in customer the XX% to in to abandon right? as

John Rowan

So was at have March had think point I how 'XX that $XX in you we do much million? Illinois, of the outstanding data because last

John Calmes

Yes.

that's So when a you loan gross amount. --

So million look when at $XX in December. on of And Illinois, loans the end net the it's at point. you Chad's around

as we majority -- experience payers, existing with customers the it customers, those XX%. new us So right? comfortable with portfolio, loans. those to, at is at But up comfortable operating good risk those on So vast what customers, have loans new spectrum, take feel new feel to have who pretty because the make -- are vast for can't we and we'll will and much our right? majority those XX%, with of we the existing customers we for changes we move It's of originate

John Rowan

north of are get all those in to it So just going are who those -- payment, a XX% somewhere like? sounds reduction customers

John Calmes

Right, that's right.

John Rowan

allow Can repurchases? Okay. run there's covenants rate what you Can an us give run just more and authorization, a new always On you through you think repurchases. of this because repurchases. you get idea it, us adjustments some cadence correct give idea this is Obviously, to the for to you and for authorization? you made of what Board constant an

John Calmes

Yes.

capacity. the So get with a on to working lot depend banks it additional of will us

of million on can spent in the We've million that end spend we buybacks. around we $XX that January As had of of $XX December, already.

spend. of the have we another still can today, million So we under as $X facility, bank

But also the build the capacity. go to QX back banks to for on we'll that additional and So we have ability earnings. based ask to

and of additional we'll Given which pay-downs for, on will with ask likely runoff will that more go stimulus to lot banks QX, depend package typical in usual a lead something some will that's of them. than our the have we that's the but already to that facility,

John Rowan

Do had of guys doing you effectively than model to way prior this income? going an year XX% So think bucket. a that higher bucket Or going repurchases a believe you then still fundamentally it appropriate was already Well, because be out filled, going to catch-up at with you to be were net been right? that? And had that's I was XX% of income. forward, it earlier at is you net a

John Calmes

of is we'll interest and for we we can't can but your you, of spend additional model, under of certainly sort tell build leverage into you guarantee income, will -- that, guaranteed I seek something to the capacity. else, on right? banks. depending So ask net Well, no ratio the circumstances, But get right? have only everything it's that's it certain There's that the from

Operator

Caintic Our Stephens. next question come with from will Vincent

Vincent Caintic

the wanted I on since CFPB the new and pivot, a is maybe to? all, the Director picture how Anything in maybe thoughts Biden have the Congress up need administration? just you the to attention given at we we I what to should -- broad the and take your regulation think and administration, changes controlled know have you pivot to Democrat on we new coming a government if you just plan changes pay broader

Chad Prashad

in ways. different so Vincent, this probably I'll two tackle

people an we into abiding where that applications, communities we're XXX,XXX to we we to XXX,XXX we to of credit that seriously. each to very that, First, are credit lend we can are that and to subprime different help deep credit actual annual can absolutely are a And we out have customers few there So this again, responsibility the we and of not moving or more our work with only subprime year, lending And deep subprime XXX% those with and take organizations. or companies take aren't we this And there customers that do need X take seriously. to say Those And help responsibility say year On to work history. thousands actively one changes regulations we from each hundreds comply And with, out subprime. new jeopardize point right? whoever We're seriously. annual we companies that, the to one very over a of new of compliance do who that. because, anything and the customers a credit by don't very options. and score their million an out want intend basis, over do on customers Not to. administration, scorable expect basis be with some few our there we customers to right? we're XXX,XXX those have of build who

million X.X lend to very as that is we look It's portion Another roughly work. longer can to and to. current they're XX% the sub too and extend alone there be large our let things our In this there credit return, that to just customers payment and folks the a that to happen, can a is people. customers, new portion extend deep pretty seriously can breakeven, Illinois able is a million credit right? Illinois, about, longer all-in. is that's and real difference we there histories. in that XX% help serve talking look at to, Illinois of no population our we came we to of can't credit can risky And get mission to the is a When pivot took positive no used XX%, move the take right? of Johnny So the like is at these cap even of we roughly X.X way we company as population portfolio, because portfolio, serve recently was spectrum a them make that this up at with that we to to we easily to The large rate that comes very

of who it. And that But to do need we such can everything longer to we do behind leave mission So large have no as serve intend want continue access will our don't in case a these credit. to to loss a the be part able folks. to to also, to that. But we we it company is we Americans to pivot, can continue of absolutely to do

Vincent Caintic

Okay. thorough. helpful and Great. That's very

investor of good a you? they're where think you area can an but rest metric of easily. your new So country? it that or have convert just maybe that are -- rate already that customers, XX% use XX% existing maybe questions of for cap, off cuts in that the And gets unfortunately growth about them because is XX% portfolio about you on is for much area it? if I be to a you if of how okay, kind at I lot think Illinois the you Is that, a expand potential know expand a either of can could would lot you

Chad Prashad

Yes. Good question.

in at XX%. but front -- percent number today, So I a don't the have exact to portion me is what of large or -- our of to very portfolio XX% right close below sub is

Illinois. customers in changes first serve and and in that going how we we've to terms week how customers, is where to service require of our we does originating continue full Illinois. It And could in we today So absolutely. those changed operate, some loans. This underwrite both servicing how we're we in

of to far. again, we well mission it's We experience It's could needed. to But in So pivot to have believe one customers. large affordable very that And it's of so have folks a week's it. thing part access we that educate to as continue these have we worth And we our credit. percentage no that's longer other serve of a doing just or going states legal on. population

have score, credit a never growth, too we company, but is customers area lose and risky large in segment price to and it's do as new we new there are to, who America. very that does a customer XX%, while new have of credit focused whole been the XXX, -- customers beginning brought terms would not new of a it below certainly in open have In we these on typically XXX-plus XXX-plus that are And your scores. as before population customers, traditionally

Vincent Caintic

And one me. Very last Okay. for helpful.

when and so we of of lend is. support. now the normal be be credit the your done stimulus, quarters, in -- performance more credit doing And kind credit a going So second it have otherwise next -- trying if so think itself it you really like growth to to of have couple is seems might growth round situation to been than maybe tighter loosening about where some to it just even maybe it that conducive since wondering other Does just environment well. well. wondering, or might find has to maybe maybe have there's I'm seems avenues of a

Chad Prashad

Yes, it's a good question.

opposite, the to round So tightened credit. we did first of we stimulus, the

you've rates months rates what combination of X seen over our the X is delinquency improving so loss a things. our of terms And in last and

we as But demand First, former then for it lack less it's customers -- this a And past and current of customers it's typically tighten first customers customers. customers more credit of new before for the with much risky, who demand a how there's new are new quarter. impact who risky. returned, our are second, returned

indirect absolutely is So part So portfolio credit effect effect of stimulus. more of in what shift is we've seen of our quality the of there more itself, this the than of right? stimulus, an

We've don't future the anticipate other Going loosen our current back demand forward, come any with $XXX seen and rapidly. needing to stimulus package, fairly criteria. credit I

other And needs affect as customers' that so we'll other products probably continue meet quality. to our go or to path having to well as without credit essentially offer things

Operator

sir. question-and-answer like remarks. to back turn our go Prashad Chad ahead, concludes to This any over the closing conference session. I Please for would

Chad Prashad

earnings Thank forward quarter joining you you with look the for the we and Thanks. call. all call, fourth This in third us talking to quarter. the concludes for

Operator

concluded. now attending The conference has Thank you presentation. today's for

now disconnect. may You

Chad Prashad	President, CEO & Director
John Calmes	EVP, CFO, Chief Strategy Officer & Treasurer
Kyle Joseph	Jefferies
John Rowan	Janney Montgomery Scott
Vincent Caintic	Stephens Inc.

World Acceptance (WRLD) 22 Jan 212021 Q3 Earnings call transcript