Second quarter highlights:
Net income of $13.4 million, a 433.1% increase from $2.5 million in same quarter prior year
Net income per diluted share of $1.96, a 538.0% increase from $0.31 per share in same quarter prior year
Loans outstanding of $1.11 billion, a 3.9% increase from first quarter and 12.9% decrease from same quarter prior year
Total revenues of $124.4 million, a 0.5% increase from first quarter and 12.1% decrease same quarter prior year
Significant decrease in accounts 61 days or more past due from first quarter and same quarter prior year
GREENVILLE, SC – World Acceptance Corporation (NASDAQ: WRLD) reported financial results for its second fiscal quarter and six months ended September 30, 2020.
Portfolio results
Second quarter of fiscal 2021 results and loan volumes continued to be impacted by the spread of COVID-19 and its related effects, including school and business closures and stay-at-home orders across many states in which we operate. Gross loans outstanding decreased to $1.11 billion as of September 30, 2020, a 12.9% decrease from the $1.27 billion of gross loans outstanding as of September 30, 2019. This is compared to a 13.1% increase for the comparable period ended September 30, 2019. Gross loans increased during fiscal Q2 2021 by 3.9% sequentially over fiscal Q1 2021 as customer demand stabilized.
Our customer base decreased by 21.3% year-over-year as of September 30, 2020, compared to 11.8% growth for the twelve months ended September 30, 2019. Excluding the direct impact of portfolio acquisitions, the customer base decreased 17.4% year-over-year as of September 30, 2020, compared to 7.2% growth for the twelve months ended September 30, 2019. During the quarter ended September 30, 2020, the number of unique borrowers in the portfolio decreased by 3.7% compared to an increase of 4.8% during the quarter ended September 30, 2019.
Fiscal Q2 2021 refinance loan volume decreased 19.7% during the quarter versus the same quarter of the prior year. Refinance loan volume is in-line with the 21.3% reduction in the customer base year-over-year and an improvement, sequentially, from a 34.2% decrease in refinance loan volume year-over-year in fiscal Q1 2021. For comparison, fiscal Q2 2020, year-over-year refinance loan volume increased 12.1%. Former customer loan volume in fiscal Q2 2021 increased 2.3% year-over-year, compared sequentially to a 58.1% year over year decrease during fiscal Q1 2021. The former customer loan volume fiscal Q2 2020 year-over-year comparison is a 4.9% increase. New customer loan volumes in fiscal Q2 2021 decreased 46.9% over the same quarter of the prior year, compared sequentially to a 74.1% year-over-year decrease in fiscal Q1 2021. The new customer loan volume fiscal Q2 2020 year-over-year comparison is a 3.6% increase.
As of September 30, 2020, we had 1,232 branches open. For branches open throughout both quarterly periods, same store gross loans decreased 12.7% in the twelve months ended September 30, 2020, compared to a 11.3% increase for the same period ended September 30, 2019. For branches open throughout both quarterly periods, the customer base on September 30, 2020, decreased 21.5% year-over-year compared to a 9.3% increase for the twelve months ended September 30, 2019.
Three-month financial results
Net income for the second quarter of fiscal 2021 increased by $10.9 million, or 433.1%, to $13.4 million compared to $2.5 million for the same quarter of the prior year. Net income per diluted share increased 538.0% to $1.96 per share in the second quarter of fiscal 2021 when compared to $0.31 per share for the same quarter of the prior year.
Earnings per share for the quarter benefited from our share repurchase program. The Company repurchased 460,120 shares of its common stock on the open market at an aggregate purchase price of approximately $43.2 million during the second quarter of fiscal 2021. This follows a repurchase of 326,298 shares in the first quarter of fiscal 2021 at an aggregate purchase price of approximately $19.5 million and the repurchase of 1,520,679 shares in fiscal 2020 at an aggregate purchase price of approximately $197.4 million. The Company had approximately 6.3 million common shares outstanding excluding approximately 0.7 million unvested restricted shares as of September 30, 2020.
Total revenues for the second quarter of fiscal 2021 decreased to $124.4 million, a 12.1% decrease from the $141.6 million reported for the same quarter of the prior year. The revenues from the 1,203 branches open throughout both quarterly periods decreased by 14.3%. Interest and fee income declined 13.6%, from $126.1 million in the second quarter of fiscal 2020 to $108.9 million in the second quarter of fiscal 2021, primarily due to a decrease in average earning loans. Insurance and other income increased by 0.5% to $15.6 million in the second quarter of fiscal 2021 compared to $15.5 million in the second quarter of fiscal 2020. Other income increased by $1.9 million, $0.7 million of which was due to higher tax preparation revenue as a result of an extended tax season. The Company also recorded a gain on company owned life insurance of $1.1 million due to the death of a former executive. Insurance revenue decreased due to lower loan volume during the quarter.
Accounts 61 days or more past due decreased to 4.5% on a recency basis at September 30, 2020, compared to 6.4% at September 30, 2019, and 5.7% at June 30, 2020. Total delinquency on a recency basis decreased to 7.6% at September 30, 2020, compared to 10.7% at September 30, 2019, and 8.3% at June 30, 2020. Our allowance for loan losses compared to net loans was 13.4% at September 30, 2020, compared to 10.8% at September 30, 2019, and 14.2% at June 30, 2020.
On April 1, 2020, the Company replaced its incurred loss methodology with a current expected credit loss (“CECL”) methodology to accrue for expected losses. The provision for loan losses decreased $26.9 million, or 50.7%, to $26.1 million from $53.0 million when comparing the second quarter of fiscal 2021 to the second quarter of fiscal 2020. The provision decreased during the quarter due primarily to a $9.7 million decrease in net charge-offs as well as an improvement in delinquency. Net charge-offs as a percentage of average net loans on an annualized basis decreased from 16.8% in the second quarter of fiscal 2020 to 14.5% in the second quarter of fiscal 2021. Loans that were 90 days recency past due decreased $11.8 million during the quarter compared to a $7.0 million increase in the second fiscal quarter of the prior year. We are experiencing lower losses on loans that were in the portfolio as of April 1, 2020, than initially predicted under our CECL methodology. Approximately 78% of the loans in the portfolio as of April 1, 2020, are no longer in the portfolio as of September 30, 2020, as a result of pay-off, charge-off, or refinance. Despite the positive performance of the portfolio to date, we have increased the expected future losses on originations during the fiscal year due to the continuing high level of unemployment claims.
The table below is updated to use the customer tenure based methodology that aligns with our CECL methodology. After experiencing rapid growth of the portfolio during the prior two years, primarily in new customers, the gross loan balance declined in the first half of 2021 as a result of the ongoing pandemic and its affect on the overall economy. The tables below illustrate the changes in the weighting within the portfolio as well as the relative impact on charge-offs within the vintages over the last five years.