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 ofThe 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," "continue,"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; the nature and scope of regulatory authority, particularly discretionary authority, that may be exercised by regulators, including, but not limited to, theSEC , DOJ,CFPB , and individual state regulators having jurisdiction over the Company; the unpredictable nature of regulatory proceedings and litigation; risks associated with the COVID-19 pandemic and the mitigation efforts by governments and related effects on us, our customers, and employees; the sale of ourMexico 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 the acquisition or sale of assets or businesses or other strategic initiatives, including increased loan delinquencies or net charge-offs, integration or migration issues, increased costs of servicing, incomplete records, and retention of customers; 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 I, Item 1A "Risk Factors" in the Company's most recent annual report on Form 10-K for the fiscal year endedMarch 31, 2020 filed with theSEC , and in the Company's other reports filed with, or furnished to, theSEC 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 (unaudited), as well as operating data and ratios, for the periods indicated: 28
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Table of Contents Three months ended June 30, 2020 2019 (Dollars in thousands) Gross loans receivable$ 1,067,877 $ 1,222,696 Average gross loans receivable (1) 1,113,530 1,173,917 Net loans receivable (2) 794,284 901,968 Average net loans receivable (3) 831,388 868,582 Expenses as a percentage of total revenue: Provision for credit losses 20.7 % 29.8 % General and administrative 57.8 % 59.1 % Interest expense 4.5 % 3.2 % Operating income as a % of total revenue (4) 21.5 % 11.1 % Loan volume (5) 463,484 752,148 Net charge-offs as percent of average net loans receivable 18.3 % 16.3 % Return on average assets (trailing 12 months) 3.4 % 7.5 % Return on average equity (trailing 12 months) 8.2 % 12.1 % Branches opened or acquired (merged or closed), net (3) 25 Branches open (at period end) 1,240 1,218
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(1) Average gross loans receivable have been determined by averaging month-end gross loans receivable over the indicated period, excluding tax advances. (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, excluding tax advances. (4) Operating income is computed as total revenue less provision for credit losses and general and administrative expenses. (5) Loan volume includes all loans generated by the Company. It does not include loans purchased through acquisitions.
Adjustments subsequent to the release of earnings on
The Company has made certain adjustments to its treatment of the amortization related to historic tax credits purchased during fiscal 2020 since the Company's earnings release was furnished onJuly 30, 2020 . The adjustments reclassify the amortization of the historic tax credits from the amortization of intangible assets line item to the other expense line item. As a result of these corrections, the below line items have been adjusted as follows:
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