Regulation FD Presentation, Business/Financial Results (Form 8-K)

NEWS RELEASE

For Immediate Release

GREENVILLE, S.C. (October 23, 2025) - World Acceptance Corporation (NASDAQ: WRLD) today reported financial results for its second quarter of fiscal 2026.

WORLD ACCEPTANCE CORPORATION REPORTS FISCAL 2026 SECOND QUARTER RESULTS

Second fiscal quarter highlights

During its second fiscal quarter, World Acceptance Corporation (the "Company") grew outstanding loans by $51.2 million from June 30, 2025, compared to $21.1 million in the second quarter of the prior year, which resulted in 1.5% year over year growth in outstanding loans. This represents the first year over year growth since September 2022. While the Company experienced a net loss per diluted share of $0.38 for the quarter due to expenses related to the early redemption of bonds and the return to portfolio growth, we believe that these and other investments have positioned us well for improving results in fiscal 2027 and beyond.

Highlights from the second quarter include:

Portfolio results

Gross loans outstanding were $1.32 billion as of September 30, 2025, a 1.5% increase from the $1.30 billion of gross loans outstanding as of September 30, 2024. This is a substantial improvement from the 4.0% year over year decrease as of March 31, 2025. During the most recent quarter, gross loans outstanding increased sequentially 4.0%, or $51.2 million, from $1.26 billion as of June 30, 2025, compared to an increase of 1.7%, or $21.1 million, in the comparable quarter of the prior year.

During the most recent quarter, our new, former and current customer borrowing increased when comparing the same quarter of fiscal year 2025. Specifically, during the quarter, new, former and refinance customer loan volume increased 40.4%, 4.1% and 1.0%, respectively, compared to the same quarter of fiscal year 2025. Our customer base increased by 6.2% during the twelve-month period ended September 30, 2025, compared to a decrease of 0.1% for the comparable period ended September 30, 2024. During the quarter ended September 30, 2025, the number of unique borrowers in the portfolio increased by 5.8%, compared to an increase of 3.6% during the quarter ended September 30, 2024. As we continue to shrink the average gross loan balance in the portfolio through increasing new and former customer small loan volume and maintain the tighter underwriting of large loans, we expect the portfolio gross and net yield to continue to improve.

WRLD Reports Fiscal 2026 Second Quarter Results

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The following table includes the volume of gross loan origination balances, excluding tax advance loans, by customer type for the following comparative quarterly periods:

As of September 30, 2025, the Company had 1,013 open branches. For branches open at least twelve months, same store gross loans increased 3.3% in the twelve-month period ended September 30, 2025, compared to a decrease of 5.6% for the twelve-month period ended September 30, 2024. For branches open throughout both periods, the customer base over the twelve-month period ended September 30, 2025, increased 7.9%, compared to an increase of 0.3% for the twelve-month period ended September 30, 2024.

Three-month financial results

The current quarter's $1.9 million net loss was a $24.1 million decrease from net income of $22.1 million for the same quarter of the prior year. Net loss per diluted share was $0.38 per share in the second quarter of fiscal 2026, compared to net income per diluted share of $3.99 per share for the same quarter of the prior year. The significant decrease is the result of an $18.5 million reversal of share based compensation expense in the prior year associated with the forfeiture of the shares granted in the second tranche of our performance-based share plan that resulted in negative share based compensation expense of $17.9 million for the prior year quarter. The current quarter included $6.1 million in share based compensation expense, a $24.0 million increase compared to the same quarter of the prior year, mainly due to the prior year reversal noted above. The current quarter also included a $3.7 million expense for the early redemption of our long-term notes, which includes a $3.0 million early call penalty and a $0.7 million write-off of the remaining unamortized debt issuance costs. Net loss was also negatively impacted by an increase in provision for credit losses, largely related to our new loan growth; however, we expect solid returns on our fiscal 2025 originations given early payment performance and yield.

Total revenues for the second quarter of fiscal 2026 increased to $134.5 million, a 2.3% increase from $131.4 million for the same quarter of the prior year. Interest and fee income increased 4.4%, from $113.9 million in the second quarter of fiscal 2025, to $119.0 million in the second quarter of fiscal 2026. Insurance income decreased by 3.6% to $11.9 million in the second quarter of fiscal 2026, compared to $12.3 million in the second quarter of fiscal 2025. The large loan portfolio decreased from 52.1% of the overall portfolio as of September 30, 2024, to 44.6% as of September 30, 2025. Interest and insurance yields for the quarter ended September 30, 2025 increased 136 basis points, compared to the quarter ended September 30, 2024. Other income decreased $1.5 million, or 30.0%, to $3.6 million in the second quarter of fiscal 2026, compared to $5.2 million in the second quarter of fiscal 2025. Other income decreased due to a $1.2 million decrease in tax preparation income due to a timing difference in income recognized year over year.

The Company accrues for expected losses with a current expected credit loss ("CECL") methodology, which requires us to create a provision for credit losses on the day we originate the loan. The provision for credit losses increased $3.1 million to $49.8 million, from $46.7 million when comparing the second quarter of fiscal 2026 to the second quarter of fiscal 2025. The table below itemizes the key components of the CECL allowance and provision impact during the quarter.

Note: The change in allowance for the quarter plus net charge-offs for the quarter equals the provision for the quarter (see above reconciliation).

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The provision was negatively impacted by growth in new customers during the quarter. The improved quarter over quarter growth resulted in a $2.5 million increase in the provision. The growth was largely from new customers which resulted in an increase of 0-5 month customers as a percent of the portfolio from 7.2% as of June 30, 2025, to 8.6% as of September 30, 2025. This growth in 0-5 month customers and the higher risk associated with them also led to an increase in the overall expected loss rates of the portfolio.

Net charge-offs for the quarter decreased $0.8 million, from $41.9 million in the second quarter of fiscal 2025, to $41.1 million in the second quarter of fiscal 2026. Net charge-offs as a percentage of average net loans receivable on an annualized basis decreased to 17.1% in the second quarter of fiscal 2026 from 17.6% in the second quarter of fiscal 2025.

Accounts 61 days or more past due increased to 5.8% on a recency basis at September 30, 2025, compared to 5.6% at September 30, 2024. Our allowance for credit losses as a percent of net loans receivable was 12.1% at September 30, 2025, compared to 12.0% at September 30, 2024. Recency delinquency on accounts at least 90 days past due increased from 3.4% at September 30, 2024, to 3.5% at September 30, 2025. Recency delinquency on accounts 0 to 60 days past due decreased from 22.5% at September 30, 2024, to 22.3% at September 30, 2025.

The table below has been updated to reflect the customer tenure-based methodology, which aligns with our CECL methodology and illustrates changes in portfolio weighting.

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General and administrative ("G&A") expenses increased $25.6 million, or 55.3%, to $72.0 million in the second quarter of fiscal 2026, compared to $46.4 million in the same quarter of the prior fiscal year. As a percentage of revenues, G&A expenses increased from 35.3% during the second quarter of fiscal 2025, to 53.5% during the second quarter of fiscal 2026. G&A expenses per average open branch increased by 60.2%, when comparing the second quarter of fiscal 2026 to the second quarter of fiscal 2025.

Personnel expense increased $26.2 million, or 120.6%, during the second quarter of fiscal 2026 as compared to the second quarter of fiscal 2025. Salary expense increased approximately $1.6 million, or 5.2%, during the quarter ended September 30, 2025, compared to the quarter ended September 30, 2024. Our headcount as of September 30, 2025 increased 5.1% compared to September 30, 2024. Benefit expense decreased approximately $0.7 million, or 8.3%, when comparing the quarterly periods ended September 30, 2025 and 2024. Incentive expense increased $25.4 million in the second quarter of fiscal 2026 compared to the second quarter of fiscal 2025. The increase in incentive expense is primarily due to a $24.0 million increase in share based compensation expense. Share based compensation expense increased due to share grants in December of 2024 and June of 2025. The prior year quarter also included an $18.5 million reversal of share based compensation expense associated with the forfeiture of the shares granted in the second tranche of our performance-based share plan.

Occupancy and equipment expense decreased $0.5 million, or 4.2%, when comparing the quarterly periods ended September 30, 2025 and 2024.

Advertising expense decreased $0.7 million, or 23.1%, in the second quarter of fiscal 2026, compared to the second quarter of fiscal 2025 due to increased efficiency in our customer acquisition programs.

Interest expense for the quarter ended September 30, 2025 increased by $3.9 million, or 37.2%, from the corresponding quarter of the previous year. The Company repurchased and canceled the remaining $169.8 million of its previously issued bonds for a purchase price of $172.8 million during the second quarter of fiscal 2026. Interest expense primarily increased due to a $3.0 million early call penalty on our long-term notes, and a $0.7 million write-off of the remaining unamortized debt issuance costs. It was also impacted by a 3.7% increase in average debt outstanding for the quarter, partially offset by a 4.8% decrease in the effective interest rate from 8.7% to 8.2%. The average debt outstanding increased from $496.0 million to $514.4 million, when comparing the quarters ended September 30, 2024 and 2025. The Company's debt to equity ratio increased to 1.6:1 at September 30, 2025, compared to 1.2:1 at September 30, 2024. As of September 30, 2025, the Company had $584.6 million of debt outstanding.

Income tax expense was $0.3 million, despite a net pre-tax loss, due to a $1.3 million discrete item recorded during the current quarter. The discrete item was related to a settlement between the US and Mexico related to our previously disposed Mexico business.

Other key return ratios for the second quarter of fiscal 2026 included a 5.6% return on average assets and a return on average equity of 14.0% (both on a trailing twelve-month basis).

The Company repurchased 385,867 shares, or 7.4% of its outstanding common stock, at an aggregate purchase price of approximately $66.6 million during the second quarter of fiscal 2026. This is in addition to repurchases of 87,609 shares during the first quarter at an aggregate purchase price of approximately $13.0 million. The Company has repurchased 9.1% of its outstanding shares year to date. As of September 30, 2025, the Company had approximately $77.0 million in aggregate remaining repurchase capacity under the terms of its senior notes payable. The Company repurchased 400,617 shares during fiscal 2025 at an aggregate purchase price of approximately $54.2 million. The Company had approximately 4.8 million common shares outstanding, excluding 246,186 unvested restricted shares, as of September 30, 2025.

Six-month financial results

Net loss for the six-months ended September 30, 2025, decreased $32.7 million to $0.6 million compared to net income of $32.1 million for the same period of the prior year. This resulted in a net loss of $0.12 per diluted share for the six months ended September 30, 2025, compared to net income of $5.77 per diluted share in the prior-year period. Total revenues for the first six-months of fiscal 2026 increased 2.3% to $266.9 million, compared to $260.9 million during the corresponding period of the previous year due to an increase in loans outstanding. Annualized net charge-offs as a percent of average net loans increased from 17.0% during the first six-months of fiscal 2025 to 18.3% for the first six-months of fiscal 2026.

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About World Acceptance Corporation (World Finance)

Founded in 1962, World Acceptance Corporation (NASDAQ: WRLD), is a people-focused finance company that provides personal installment loan solutions and personal tax preparation and filing services to over one million customers each year. Headquartered in Greenville, South Carolina, the Company operates more than 1,000 community-based World Finance branches across 16 states. The Company primarily serves a segment of the population that does not have ready access to credit; however, unlike many other lenders in this segment, we strive to work with our customers to understand their broader financial pictures, ensure they have the ability and stability to make payments, and help them achieve their financial goals. For more information, visit www.loansbyworld.com.

Second quarter conference call

The senior management of World Acceptance Corporation will be discussing these results in its quarterly conference call to be held at 10:00 a.m. Eastern Time today. A simulcast of the conference call will be available on the Internet at https://event.choruscall.com/mediaframe/webcast.html?webcastid=0SmypfHo. The call will be available for replay on the Internet for approximately 30 days.

During the conference call, the Company may discuss and answer questions concerning business and financial developments and trends that have occurred after quarter-end. The Company's responses to questions, as well as other matters discussed during the conference call, may contain or constitute information that has not been disclosed previously.