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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 10-Q







|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly period ended March 25, 2009

or



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the transition period from  to

Commission file number 333-122531





THE MONEY TREE INC

(Exact name of registrant as specified in its charter)







|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Georgia                                                        |  | 58-2171386                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)

114 South Broad Street

Bainbridge, Georgia 39817

(Address, including zip code, of principal
executive offices)

Registrants telephone number, including area code (229) 246-6536





Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90
days.    x  Yes     ̈  No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of
Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).     ̈  Yes     ̈  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of large accelerated filer, accelerated filer
and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):



|                                                                        |  |                               |  |  |  | 
|----------------------------------------------------------------------- |  | ----------------------------- |  |  |  | 
|Large accelerated filer   ̈                                              |  | Accelerated filer   ̈         
|Non-accelerated filer  x  (Do not check if a smaller reporting company) |  | Smaller reporting company    ̈

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Act).     ̈  Yes    x  No

Indicate the number of shares outstanding of each of the registrants classes of common stock, as of the last practicable date.



|                    |  |                              
|------------------- |  | -----------------------------
|Class               |  | Outstanding at March 25, 2009
|Class A, Voting     |  | 2,686 Shares                 
|Class B, Non-Voting |  | 26,860 Shares                









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##### Table of Contents

THE MONEY TREE INC.

FORM 10-Q

March 25, 2009

TABLE OF CONTENTS

Index to Financial
Statements



|        |  |                                                                                                              |  |     
|------- |  | ------------------------------------------------------------------------------------------------------------ |  | ----
|ItemNo. |  |                                                                                                              |  | Page
|        |  |                                                                                                             
|        |  | PART I  FINANCIAL INFORMATION                                                                               |  |     
|        |  |                                                                                                             
|1       |  | Financial Statements                                                                                         |  | 3   
|        |  |                                                                                                             
|        |  | Consolidated Balance Sheets as of March 25, 2009 (Unaudited) and September 25, 2008                          |  | 3   
|        |  |                                                                                                             
|        |  | Consolidated Statements of Operations for the three and six months ended March 25, 2009 and 2008 (Unaudited) |  | 4   
|        |  |                                                                                                             
|        |  | Consolidated Statements of Cash Flows for the six months ended March 25, 2009 and 2008 (Unaudited)           |  | 5   
|        |  |                                                                                                             
|        |  | Notes to Consolidated Financial Statements (Unaudited)                                                       |  | 7   
|        |  |                                                                                                             
|2       |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                        |  | 18  
|        |  |                                                                                                             
|3       |  | Quantitative and Qualitative Disclosures About Market Risk                                                   |  | 31  
|        |  |                                                                                                             
|4       |  | Controls and Procedures                                                                                      |  | 31  
|        |  |                                                                                                             
|        |  | PART II  OTHER INFORMATION                                                                                  |  |     
|        |  |                                                                                                             
|1       |  | Legal Proceedings                                                                                            |  | 33  
|        |  |                                                                                                             
|1A      |  | Risk Factors                                                                                                 |  | 33  
|        |  |                                                                                                             
|2       |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                  |  | 33  
|        |  |                                                                                                             
|3       |  | Defaults Upon Senior Securities                                                                              |  | 33  
|        |  |                                                                                                             
|4       |  | Submission of Matters to a Vote of Security Holders                                                          |  | 33  
|        |  |                                                                                                             
|5       |  | Other Information                                                                                            |  | 33  
|        |  |                                                                                                             
|6       |  | Exhibits                                                                                                     |  | 33  

See accompanying notes to the consolidated financial statements.



2



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##### Table of Contents

PART I

Item 1  Financial Statements

The Money Tree Inc. and
Subsidiaries

Consolidated Balance Sheets



|                                                                                                    |  |                |             |   |                    |   |             |  
|--------------------------------------------------------------------------------------------------- |  | -------------- | ----------- | - | ------------------ | - | ----------- | -
|                                                                                                    |  | March 25, 2009 |             |   | September 25, 2008 |  
|                                                                                                    |  | (Unaudited)    |             |   |                    |  
|Assets                                                                                              |  |                |             |   |                    |   |             |  
|Cash and cash equivalents                                                                           |  | $              | 3,189,765   |   |                    | $ | 12,541,302  |  
|Finance receivables, net                                                                            |  |                | 62,119,371  |   |                    |   | 67,730,473  |  
|Other receivables                                                                                   |  |                | 1,454,178   |   |                    |   | 956,752     |  
|Inventory                                                                                           |  |                | 2,587,140   |   |                    |   | 3,167,021   |  
|Property and equipment, net                                                                         |  |                | 4,479,060   |   |                    |   | 4,906,189   |  
|Other assets                                                                                        |  |                | 2,273,934   |   |                    |   | 2,498,205   |  
|                                                                                                    |  |                |             |   |                    |   |             |  
|Total assets                                                                                        |  | $              | 76,103,448  |   |                    | $ | 91,799,942  |  
|                                                                                                    |  |                |             |   |                    |   |             |  
|                                                                                                    |  |               
|Liabilities and Shareholders Deficit                                                               |  |                |             |   |                    |   |             |  
|                                                                                                    |  |               
|Liabilities                                                                                         |  |                |             |   |                    |   |             |  
|Accounts payable and other accrued liabilities                                                      |  | $              | 3,163,290   |   |                    | $ | 3,278,870   |  
|Accrued interest payable                                                                            |  |                | 13,658,309  |   |                    |   | 14,854,877  |  
|Senior debt                                                                                         |  |                | 710,618     |   |                    |   | 694,890     |  
|Variable rate subordinated debentures                                                               |  |                | 73,344,156  |   |                    |   | 82,209,211  |  
|Demand notes                                                                                        |  |                | 2,859,718   |   |                    |   | 3,658,160   |  
|                                                                                                    |  |                |             |   |                    |   |             |  
|Total liabilities                                                                                   |  |                | 93,736,091  |   |                    |   | 104,696,008 |  
|                                                                                                    |  |                |             |   |                    |   |             |  
|                                                                                                    |  |               
|Shareholders Deficit                                                                               |  |                |             |   |                    |   |             |  
|Common stock:                                                                                       |  |                |             |   |                    |   |             |  
|Class A voting, no par value; 500,000 shares authorized, 2,686 shares issued and outstanding        |  |                | 1,677,647   |   |                    |   | 1,677,647   |  
|Class B non-voting, no par value; 1,500,000 shares authorized, 26,860 shares issued and outstanding |  |                |            |   |                    |   |            |  
|Accumulated deficit                                                                                 |  |                | (19,310,290 | ) |                    |   | (14,573,713 | )
|                                                                                                    |  |                |             |   |                    |   |             |  
|Total shareholders deficit                                                                         |  |                | (17,632,643 | ) |                    |   | (12,896,066 | )
|                                                                                                    |  |                |             |   |                    |   |             |  
|Total liabilities and shareholders deficit                                                         |  | $              | 76,103,448  |   |                    | $ | 91,799,942  |  
|                                                                                                    |  |                |             |   |                    |   |             |  

See accompanying notes to the consolidated financial statements.



3



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##### Table of Contents

The Money Tree Inc. and Subsidiaries

Consolidated Statements of Operations



|                                                                              |  |                              |            |   |                            |   |            |      |  |   |             |   |  |   |             |  
|----------------------------------------------------------------------------- |  | ---------------------------- | ---------- | - | -------------------------- | - | ---------- | ---- |  | - | ----------- | - |  | - | ----------- | -
|                                                                              |  | Three months ended March 25, |            |   | Six months ended March 25, |  
|                                                                              |  | 2009                         |            |   | 2008                       |   |            | 2009 |  |   | 2008        |  
|                                                                              |  | (Unaudited)                  |            |   | (Unaudited)                |  
|Interest and fee income                                                       |  | $                            | 3,705,789  |   |                            | $ | 4,849,163  |      |  | $ | 8,300,438   |   |  | $ | 9,837,355   |  
|Interest expense                                                              |  |                              | (1,868,843 | ) |                            |   | (2,046,379 | )    |  |   | (3,786,066  | ) |  |   | (4,111,892  | )
|                                                                              |  |                              |            |   |                            |   |            |      |  |   |             |   |  |   |             |  
|Net interest and fee income before provision for credit losses                |  |                              | 1,836,946  |   |                            |   | 2,802,784  |      |  |   | 4,514,372   |   |  |   | 5,725,463   |  
|Provision for credit losses                                                   |  |                              | (1,898,485 | ) |                            |   | (3,227,625 | )    |  |   | (4,133,127  | ) |  |   | (5,270,298  | )
|                                                                              |  |                              |            |   |                            |   |            |      |  |   |             |   |  |   |             |  
|Net interest and fee income (loss) after provision for credit losses          |  |                              | (61,539    | ) |                            |   | (424,841   | )    |  |   | 381,245     |   |  |   | 455,165     |  
|Insurance commissions                                                         |  |                              | 2,266,829  |   |                            |   | 2,387,463  |      |  |   | 4,831,659   |   |  |   | 4,950,478   |  
|Commissions from motor club memberships from company owned by related parties |  |                              | 325,711    |   |                            |   | 396,834    |      |  |   | 789,550     |   |  |   | 909,150     |  
|Delinquency fees                                                              |  |                              | 431,155    |   |                            |   | 485,203    |      |  |   | 834,733     |   |  |   | 897,017     |  
|Other income                                                                  |  |                              | 200,717    |   |                            |   | 159,396    |      |  |   | 333,826     |   |  |   | 311,259     |  
|                                                                              |  |                              |            |   |                            |   |            |      |  |   |             |   |  |   |             |  
|Net revenue before retail sales                                               |  |                              | 3,162,873  |   |                            |   | 3,004,055  |      |  |   | 7,171,013   |   |  |   | 7,523,069   |  
|                                                                              |  |                              |            |   |                            |   |            |      |  |   |             |   |  |   |             |  
|Retail sales                                                                  |  |                              | 3,848,459  |   |                            |   | 4,506,583  |      |  |   | 8,442,438   |   |  |   | 9,541,498   |  
|Cost of sales                                                                 |  |                              | (2,519,341 | ) |                            |   | (2,894,464 | )    |  |   | (5,499,548  | ) |  |   | (5,972,756  | )
|                                                                              |  |                              |            |   |                            |   |            |      |  |   |             |   |  |   |             |  
|Gross margin on retail sales                                                  |  |                              | 1,329,118  |   |                            |   | 1,612,119  |      |  |   | 2,942,890   |   |  |   | 3,568,742   |  
|                                                                              |  |                              |            |   |                            |   |            |      |  |   |             |   |  |   |             |  
|Net revenues                                                                  |  |                              | 4,491,991  |   |                            |   | 4,616,174  |      |  |   | 10,113,903  |   |  |   | 11,091,811  |  
|                                                                              |  |                              |            |   |                            |   |            |      |  |   |             |   |  |   |             |  
|Operating expenses                                                            |  |                              |            |   |                            |   |            |      |  |   |             |   |  |   |             |  
|Personnel expense                                                             |  |                              | (4,160,165 | ) |                            |   | (4,086,671 | )    |  |   | (8,168,860  | ) |  |   | (7,968,141  | )
|Facilities expense                                                            |  |                              | (970,686   | ) |                            |   | (911,463   | )    |  |   | (2,016,241  | ) |  |   | (1,905,896  | )
|General and administrative expenses                                           |  |                              | (780,363   | ) |                            |   | (791,840   | )    |  |   | (1,630,883  | ) |  |   | (1,561,328  | )
|Other operating expenses                                                      |  |                              | (1,772,983 | ) |                            |   | (1,259,135 | )    |  |   | (3,118,989  | ) |  |   | (2,444,988  | )
|                                                                              |  |                              |            |   |                            |   |            |      |  |   |             |   |  |   |             |  
|Total operating expenses                                                      |  |                              | (7,684,197 | ) |                            |   | (7,049,109 | )    |  |   | (14,934,973 | ) |  |   | (13,880,353 | )
|                                                                              |  |                              |            |   |                            |   |            |      |  |   |             |   |  |   |             |  
|Net operating loss                                                            |  |                              | (3,192,206 | ) |                            |   | (2,432,935 | )    |  |   | (4,821,070  | ) |  |   | (2,788,542  | )
|Gain (loss) on sale of property and equipment                                 |  |                              | 84,493     |   |                            |   | (3,455     | )    |  |   | 84,493      |   |  |   | (18,092     | )
|                                                                              |  |                              |            |   |                            |   |            |      |  |   |             |   |  |   |             |  
|Loss before income tax benefit                                                |  |                              | (3,107,713 | ) |                            |   | (2,436,390 | )    |  |   | (4,736,577  | ) |  |   | (2,806,634  | )
|Income tax benefit                                                            |  |                              |           |   |                            |   | 213,336    |      |  |   |            |   |  |   | 3,093       |  
|                                                                              |  |                              |            |   |                            |   |            |      |  |   |             |   |  |   |             |  
|Net loss                                                                      |  | $                            | (3,107,713 | ) |                            | $ | (2,223,054 | )    |  | $ | (4,736,577  | ) |  | $ | (2,803,541  | )
|                                                                              |  |                              |            |   |                            |   |            |      |  |   |             |   |  |   |             |  
|Net loss per common share, basic and diluted                                  |  | $                            | (105.18    | ) |                            | $ | (75.24     | )    |  | $ | (160.31     | ) |  | $ | (94.89      | )
|                                                                              |  |                              |            |   |                            |   |            |      |  |   |             |   |  |   |             |  
|Weighted average shares outstanding, basic and diluted                        |  |                              | 29,546     |   |                            |   | 29,546     |      |  |   | 29,546      |   |  |   | 29,546      |  
|                                                                              |  |                              |            |   |                            |   |            |      |  |   |             |   |  |   |             |  

See accompanying notes to the consolidated financial statements.



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##### Table of Contents

The Money Tree Inc. and Subsidiaries

Consolidated Statements of Cash Flows



|                                                                                |  |             |             |   |      |   |             |  
|------------------------------------------------------------------------------- |  | ----------- | ----------- | - | ---- | - | ----------- | -
|Six months ended March 25,                                                      |  | 2009        |             |   | 2008 |  
|                                                                                |  | (Unaudited) |            
|Cash flows from operating activities                                            |  |             |             |   |      |   |             |  
|Net loss                                                                        |  | $           | (4,736,577  | ) |      | $ | (2,803,541  | )
|Adjustments to reconcile net loss to net cash provided by operating activities: |  |             |             |   |      |   |             |  
|Provision for credit losses                                                     |  |             | 4,133,127   |   |      |   | 5,270,298   |  
|Depreciation                                                                    |  |             | 459,227     |   |      |   | 384,984     |  
|Amortization                                                                    |  |             | 2,381       |   |      |   | 2,857       |  
|Deferred income taxes                                                           |  |             |            |   |      |   | 47,000      |  
|(Gain) loss on sale of property and equipment                                   |  |             | (84,493     | ) |      |   | 18,092      |  
|Change in assets and liabilities                                                |  |             |             |   |      |   |             |  
|Other receivables                                                               |  |             | (497,426    | ) |      |   | 6,850       |  
|Inventory                                                                       |  |             | 579,881     |   |      |   | 387,264     |  
|Other assets                                                                    |  |             | 221,890     |   |      |   | (128,933    | )
|Accounts payable and other accrued liabilities                                  |  |             | (115,580    | ) |      |   | (85,971     | )
|Accrued interest payable                                                        |  |             | (1,196,568  | ) |      |   | 886,233     |  
|                                                                                |  |             |             |   |      |   |             |  
|Net cash (used in) provided by operating activities                             |  |             | (1,234,138  | ) |      |   | 3,985,133   |  
|                                                                                |  |             |             |   |      |   |             |  
|Cash flows from investing activities                                            |  |             |             |   |      |   |             |  
|Finance receivables originated                                                  |  |             | (30,547,836 | ) |      |   | (38,356,420 | )
|Finance receivables repaid                                                      |  |             | 32,025,811  |   |      |   | 35,663,121  |  
|Purchase of property and equipment                                              |  |             | (434,355    | ) |      |   | (348,362    | )
|Proceeds from sale of property and equipment                                    |  |             | 486,750     |   |      |   | 38,548      |  
|                                                                                |  |             |             |   |      |   |             |  
|Net cash provided by (used in) investing activities                             |  |             | 1,530,370   |   |      |   | (3,003,113  | )
|                                                                                |  |             |             |   |      |   |             |  
|Cash flows from financing activities                                            |  |             |             |   |      |   |             |  
|Net proceeds (repayments) on:                                                   |  |             |             |   |      |   |             |  
|Senior debt                                                                     |  |             | 15,728      |   |      |   | (69,815     | )
|Demand notes                                                                    |  |             | (798,442    | ) |      |   | (1,773,125  | )
|Proceeds-variable rate subordinated debentures                                  |  |             | 1,596,418   |   |      |   | 7,590,167   |  
|Payments-variable rate subordinated debentures                                  |  |             | (10,461,473 | ) |      |   | (6,848,719  | )
|                                                                                |  |             |             |   |      |   |             |  
|Net cash used in financing activities                                           |  |             | (9,647,769  | ) |      |   | (1,101,492  | )
|                                                                                |  |             |             |   |      |   |             |  
|Net change in cash and cash equivalents                                         |  |             | (9,351,537  | ) |      |   | (119,472    | )
|Cash and cash equivalents, beginning of period                                  |  |             | 12,541,302  |   |      |   | 17,854,277  |  
|                                                                                |  |             |             |   |      |   |             |  
|Cash and cash equivalents, end of period                                        |  | $           | 3,189,765   |   |      | $ | 17,734,805  |  
|                                                                                |  |             |             |   |      |   |             |  

See accompanying notes to the consolidated financial statements.



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The Money Tree Inc. and Subsidiaries

Consolidated Statements of Cash Flows (continued)



|                                 |  |             |           |      |   |          
|-------------------------------- |  | ----------- | --------- | ---- | - | ---------
|Six months ended March 25,       |  | 2009        |           | 2008
|                                 |  | (Unaudited)
|SUPPLEMENTAL DISCLOSURE OF       |  |             |           |      |   |          
|CASH FLOW INFORMATION:           |  |             |           |      |   |          
|Cash paid during the period for: |  |             |           |      |   |          
|Interest                         |  | $           | 4,928,095 |      | $ | 3,155,881
|                                 |  |             |           |      |   |          
|Income taxes                     |  | $           |          |      | $ | 228,839  
|                                 |  |             |           |      |   |          

See accompanying notes to the consolidated financial statements.



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The Money Tree Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

NOTE 1  BASIS OF PRESENTATION

The consolidated financial statements of The Money Tree Inc., a Georgia corporation
(the Parent) and subsidiaries (collectively with the Parent, the Company) included herein have been prepared by the Company without audit, pursuant to the rules and regulations of the United States Securities and Exchange
Commission. Certain information and footnote disclosure normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been omitted. For a description of significant accounting policies used
by the Company in the preparation of its consolidated financial statements, see Note 1 to the Consolidated Financial Statements in the Companys 2008 Annual Report on Form 10-K.

The consolidated financial statements include the accounts of the Company and all of its subsidiaries after eliminating all significant intercompany transactions and reflect all normal, recurring
adjustments which are, in the opinion of management, necessary to present a fair statement of the results of operations of the Company in conformity with U.S. generally accepted accounting principles for the interim periods reported. The results of
operations for the three and six months ended March 25, 2009 and 2008 are not necessarily indicative of the results for the full fiscal year.

NOTE
2  NATURE OF BUSINESS

The Companys business consists of: the operation of finance company offices in 103 locations
throughout Georgia, Alabama, Louisiana and Florida; sales of retail merchandise (principally furniture, appliances, and electronics) at certain finance company locations; and the operation of three used automobile dealerships in the state of
Georgia. The Company also earns revenues from commissions on premiums written for certain insurance products, when requested by loan customers, as an agent for a non-affiliated insurance company. Revenues are also generated from commissions on the
sales of prepaid phone service and automobile club memberships.

The Companys loan portfolio consists of sales finance loan
receivables and direct consumer loan receivables. Sales finance loan receivables consist principally of retail installment sale contracts collateralized by used automobiles and consumer goods which are initiated by automobile and consumer good
dealerships, subject to credit approval, in the locations where the Company operates offices. Direct loan receivables are loans originated directly to customers.

The operations of the Company for the first two quarters of 2009 reflect continued pressure from an uncertain economy and the negative impact of the turmoil in the credit markets. On November 18, 2008, the
Companys registration of and ability to offer debentures and demand notes was terminated and was not renewed until April 10, 2009. As a result, for the six months ended March 25, 2009, the Company redeemed $9.7 million more in
debentures and demand notes than it sold and its cash balance at March 25, 2009 was $3.2 million, a decrease of $9.4 million from September 25, 2008. The Company has thus closely monitored and managed its liquidity position, understanding
that this is of critical importance in the current economic environment. While reducing its debt and related accrued interest by $10.8 million in the six months ended March 25, 2009, the Company tightened its risk management controls related to
new loans, resulting in a decrease in loan originations of $10.1 million from the prior year. The Companys continued liquidity is dependent on the collection of its finance receivables and its ability to sell debentures and demand notes or
secure other financing sources.

NOTE 3  RECENT ACCOUNTING PRONOUNCEMENTS

In September 2006, the Financial Accounting Standards Board (FASB) issued SFAS 157, Fair Value Measurements. SFAS 157 defines fair value, establishes a
framework for measuring fair value under generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007,
and accordingly, the Company adopted this pronouncement on September 26, 2008 with no material effect on the consolidated financial statements. As of March 25, 2009, the Company does not measure any assets or liabilities at fair value.



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The Money Tree Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)



NOTE 3  RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED)

In February 2007, the FASB issued SFAS 159, The Fair Value Option for Financial Assets and Liabilities  Including an amendment of
FASB Statement No. 115. SFAS 159 permits entities to choose to measure certain financial assets and liabilities at fair value (the fair value option). Unrealized gains and losses, arising subsequent to adoption, are
reported in earnings. SFAS 159 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and accordingly, the Company adopted this pronouncement on September 26, 2008 with no material effect on the
consolidated financial statements.

In December 2007, the FASB issued SFAS 141(R), Business Combinations. This
Statement replaces SFAS 141, Business Combinations. This Statement retains the fundamental requirements in Statement 141 that the acquisition method of accounting (which Statement 141 called the purchase method) be used for
all business combinations and for an acquirer to be identified for each business combination. This Statement also establishes principles and requirements for how the acquirer: a) recognizes and measures in its financial statements the identifiable
assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree; b) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase and c) determines what information to disclose
to enable users of the financial statements to evaluate the nature and financial effects of the business combination. SFAS 141(R) will apply prospectively to business combinations for which the acquisition date is on or after the Companys
fiscal year beginning September 26, 2009. While the Company has not yet evaluated this statement for the impact, if any, that SFAS 141(R) will have on its consolidated financial statements, the Company will be required to expense costs related
to any acquisitions after September 25, 2009.

In December 2007, the FASB issued SFAS 160, Noncontrolling Interests in Consolidated
Financial Statements. This Statement amends Accounting Research Bulletin 51 to establish accounting and reporting standards for the noncontrolling (minority) interest in a subsidiary and for the deconsolidation of a subsidiary. It
clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. The Company has not yet determined the impact, if any, that SFAS
160 will have on its consolidated financial statements. SFAS 160 is effective for the Companys fiscal year beginning September 26, 2009.

FASB Statement No. 161, Disclosures about Derivative Instruments and Hedging Activities an amendment of FASB Statement No. 133 requires enhanced disclosures about an entitys derivative and hedging activities and
thereby improves the transparency of financial reporting. This Statement is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. This Statement
encourages, but does not require, comparative disclosures for earlier periods at initial adoption. Management does not expect SFAS No. 161 to have a material impact on the Companys consolidated financial statements.

In May 2008, the FASB issued SFAS No. 163, Accounting for Financial Guarantee Insurance Contractsan interpretation of FASB Statement
No. 60 (SFAS 163). SFAS 163 interprets Statement 60 and amends existing accounting pronouncements to clarify their application to the financial guarantee insurance contracts included within the scope of that Statement. SFAS 163
is effective for financial statements issued for fiscal years beginning after December 15, 2008, and all interim periods within those fiscal years. The Company does not expect that SFAS 163 will have a material impact on its consolidated
financial statements.

In April 2009, the Financial Accounting Standards Board (FASB) issued FASB Staff Position
(FSP) No. FAS 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly. This FSP provides additional
guidance for estimating fair value in accordance with FASB Statement No. 157, Fair Value



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Notes to Consolidated Financial Statements (Unaudited)



NOTE 3  RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED)

Measurements (FAS 157), when the volume and level of activity for the asset or liability have significantly decreased and also includes
guidance on identifying circumstances that indicate a transaction is not orderly. This FSP emphasizes that even if there has been a significant decrease in the volume and level of activity for the asset or liability and regardless of the
valuation technique(s) used, the objective of a fair value measurement remains the same. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction (that is, not a forced liquidation or
distressed sale) between market participants at the measurement date under current market conditions. This FSP is effective for interim and annual reporting periods ending after June 15, 2009, and is not expected to have a material impact
on our consolidated financial statements.

In April 2009, the FASB issued FSP No. FAS 107-1 and APB 28-1, Interim Disclosures about Fair
Value of Financial Instruments, to require disclosures about fair value of financial instruments in interim financial statements as well as in annual financial statements. This FSP also amends APB Opinion No. 28, Interim Financial
Reporting, to require those disclosures in all interim financial statements. This FSP is effective for interim and annual reporting periods ending after June 15, 2009, and is not expected to have a material impact on our consolidated
financial statements.

In April 2009, the FASB issued FSP FAS 141(R)-1, Accounting for Assets Acquired and Liabilities Assumed in a
Business Combination That Arise from Contingencies, which amends and clarifies FASB Statement No. 141 (revised 2007), Business Combinations, to address application issues raised by preparers, auditors, and members of the legal
profession on initial recognition and measurement, subsequent measurement and accounting, and disclosure of assets and liabilities arising from contingencies in a business combination. This FSP is effective for assets or liabilities arising
from contingencies in business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. This FSP is not expected to have a material impact on our
consolidated financial statements.

NOTE 4  FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES

Finance receivables consisted of the following:



|                                                        |  |                |            |   |                    |   |             |  
|------------------------------------------------------- |  | -------------- | ---------- | - | ------------------ | - | ----------- | -
|                                                        |  | March 25, 2009 |            |   | September 25, 2008 |  
|                                                        |  | (Unaudited)    |            |   |                    |  
|Finance receivables, direct consumer                    |  | $              | 34,703,164 |   |                    | $ | 41,654,302  |  
|Finance receivables, consumer sales finance             |  |                | 16,167,366 |   |                    |   | 16,793,743  |  
|Finance receivables, auto sales finance                 |  |                | 30,329,656 |   |                    |   | 30,707,329  |  
|                                                        |  |                |            |   |                    |   |             |  
|Total gross finance receivables                         |  |                | 81,200,186 |   |                    |   | 89,155,374  |  
|Unearned insurance commissions                          |  |                | (2,332,469 | ) |                    |   | (2,793,425  | )
|Unearned finance charges                                |  |                | (9,758,602 | ) |                    |   | (10,621,034 | )
|Accrued interest receivable                             |  |                | 782,825    |   |                    |   | 865,885     |  
|                                                        |  |                |            |   |                    |   |             |  
|Finance receivables, before allowance for credit losses |  |                | 69,891,940 |   |                    |   | 76,606,800  |  
|Allowance for credit losses                             |  |                | (7,772,569 | ) |                    |   | (8,876,327  | )
|                                                        |  |                |            |   |                    |   |             |  
|Finance receivables, net                                |  | $              | 62,119,371 |   |                    | $ | 67,730,473  |  
|                                                        |  |                |            |   |                    |   |             |  



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Notes to Consolidated Financial Statements (Unaudited)



NOTE 4  FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES (CONTINUED)



An analysis of the allowance for credit losses is as follows:



|                             |  |                                                 |            |   |                                               |   |            |                                                 |  |   |            |  
|---------------------------- |  | ----------------------------------------------- | ---------- | - | --------------------------------------------- | - | ---------- | ----------------------------------------------- |  | - | ---------- | -
|                             |  | As of and for thesix months endedMarch 25, 2009 |            |   | As of and for theyear
endedSeptember 25, 2008 |   |            | As of and for thesix months endedMarch 25, 2008 | 
|                             |  | (Unaudited)                                     |            |   |                                               |   |            | (Unaudited)                                     | 
|Beginning balance            |  | $                                               | 8,876,327  |   |                                               | $ | 3,710,679  |                                                 |  | $ | 3,710,679  |  
|Provisions for credit losses |  |                                                 | 4,133,127  |   |                                               |   | 13,812,192 |                                                 |  |   | 5,270,298  |  
|Charge-offs                  |  |                                                 | (5,402,264 | ) |                                               |   | (8,825,129 | )                                               |  |   | (2,573,374 | )
|Recoveries                   |  |                                                 | 120,853    |   |                                               |   | 196,208    |                                                 |  |   | 91,835     |  
|Other                        |  |                                                 | 44,526     |   |                                               |   | (17,623    | )                                               |  |   | 23,222     |  
|                             |  |                                                 |            |   |                                               |   |            |                                                 |  |   |            |  
|Ending balance               |  | $                                               | 7,772,569  |   |                                               | $ | 8,876,327  |                                                 |  | $ | 6,522,660  |  
|                             |  |                                                 |            |   |                                               |   |            |                                                 |  |   |            |  

NOTE 5  INVENTORY

Inventory consisted of the following:



|                                 |  |                |           |                    |   |          
|-------------------------------- |  | -------------- | --------- | ------------------ | - | ---------
|                                 |  | March 25, 2009 |           | September 25, 2008
|                                 |  | (Unaudited)    |           |                   
|Used automobiles                 |  | $              | 1,188,801 |                    | $ | 1,529,078
|Home furnishings and electronics |  |                | 1,398,339 |                    |   | 1,637,943
|                                 |  |                |           |                    |   |          
|Total inventory                  |  | $              | 2,587,140 |                    | $ | 3,167,021
|                                 |  |                |           |                    |   |          

NOTE 6  ACCOUNTS PAYABLE AND OTHER ACCRUED LIABILITIES

Accounts payable and other accrued liabilities consisted of the following:



|                                                     |  |                |           |                    |   |          
|---------------------------------------------------- |  | -------------- | --------- | ------------------ | - | ---------
|                                                     |  | March 25, 2009 |           | September 25, 2008
|                                                     |  | (Unaudited)    |           |                   
|Accounts payable                                     |  | $              | 279,304   |                    | $ | 271,815  
|Insurance payable, loan related                      |  |                | 464,840   |                    |   | 639,167  
|Accrued payroll                                      |  |                | 530,457   |                    |   | 507,484  
|Accrued payroll taxes                                |  |                | 47,282    |                    |   | 38,420   
|Money orders                                         |  |                | 77,027    |                    |   | 530,888  
|Sales tax payable                                    |  |                | 1,148,045 |                    |   | 1,210,579
|Other liabilities                                    |  |                | 616,335   |                    |   | 80,517   
|                                                     |  |                |           |                    |   |          
|Total accounts payable and other accrued liabilities |  | $              | 3,163,290 |                    | $ | 3,278,870
|                                                     |  |                |           |                    |   |          



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Notes to Consolidated Financial Statements (Unaudited)



NOTE 7  DEBT

Debt consisted of the following:



|                                                                                                                                                                                                                                                                                                                                                           |  |                |            |                    |   |           
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | ---------- | ------------------ | - | ----------
|                                                                                                                                                                                                                                                                                                                                                           |  | March 25, 2009 |            | September 25, 2008
|                                                                                                                                                                                                                                                                                                                                                           |  | (Unaudited)    |            |                   
|Senior debt: due to banks and commercial finance companies, collateralized by inventory and certain automotive equipment, and certain notes include personal guarantees of a
shareholder, interest at prime plus 2%, due in 2009. The carrying values of the collateral at March 25, 2009 and September 25, 2008 were $750,280 and $725,910, respectively. |  | $              | 710,618    |                    | $ | 694,890   
|                                                                                                                                                                                                                                                                                                                                                           |  |                |            |                    |   |           
|Total senior debt                                                                                                                                                                                                                                                                                                                                          |  |                | 710,618    |                    |   | 694,890   
|                                                                                                                                                                                                                                                                                                                                                           |  |                |            |                    |   |           
|Variable rate subordinated debentures issued by The Money Tree of Georgia Inc.: due to individuals, unsecured, interest at 4.25% to 9.6%, due at various dates through 2012.                                                                                                                                                                               |  |                | 38,116,319 |                    |   | 45,020,194
|Variable rate subordinated debentures issued by The Money Tree Inc.: due to individuals, unsecured, interest at 6.0% to 8.7%, due at various dates through
2012.                                                                                                                                                                                           |  |                | 35,227,837 |                    |   | 37,189,017
|                                                                                                                                                                                                                                                                                                                                                           |  |                |            |                    |   |           
|Total variable rate subordinated debentures                                                                                                                                                                                                                                                                                                                |  |                | 73,344,156 |                    |   | 82,209,211
|                                                                                                                                                                                                                                                                                                                                                           |  |                |            |                    |   |           
|Demand notes issued by The Money Tree of Georgia Inc.: due to individuals, unsecured, interest at 4.25% to 5.0%, due on demand.                                                                                                                                                                                                                            |  |                | 485,238    |                    |   | 613,442   
|                                                                                                                                                                                                                                                                                                                                                           |  |               
|Demand notes issued by The Money Tree Inc.: due to individuals, unsecured, interest at 4.25% to 5.0%, due on demand.                                                                                                                                                                                                                                       |  |                | 2,374,480  |                    |   | 3,044,718 
|                                                                                                                                                                                                                                                                                                                                                           |  |                |            |                    |   |           
|Total demand notes                                                                                                                                                                                                                                                                                                                                         |  |                | 2,859,718  |                    |   | 3,658,160 
|                                                                                                                                                                                                                                                                                                                                                           |  |                |            |                    |   |           
|Total debt                                                                                                                                                                                                                                                                                                                                                 |  | $              | 76,914,492 |                    | $ | 86,562,261
|                                                                                                                                                                                                                                                                                                                                                           |  |                |            |                    |   |           

NOTE 8  INCOME TAXES

At the end of each quarter, the Company makes its best estimate of the effective tax rate expected to be applicable for the full fiscal year and uses that rate in providing for income taxes on a current year-to-date
basis. As a result of the deductible amounts expected to be realized in the foreseeable future, for the three and six months ended March 25, 2009, the Company increased the valuation allowance for its deferred income tax asset by $1.2 million
and $1.8 million, respectively, resulting in a difference between income taxes calculated using expected annual federal and state rates and actual income tax expense. For the three and six months ended March 25, 2008, the Company increased the
valuation allowance for its deferred income tax asset by $0.6 million and $0.9 million, respectively.



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Notes to Consolidated Financial Statements (Unaudited)



NOTE 9  RELATED PARTY TRANSACTIONS

Martin Family Group, LLLP owns the real estate of thirteen branch offices, one used car lot, and the Companys principal executive offices. The estate of the Companys founder and
former CEO is a limited partner of Martin Family Group, LLLP. A shareholder of the Company is the president of Martin Investments, Inc., which is the managing general partner of Martin Family Group, LLLP. The Company has entered into lease
agreements whereby rent is paid monthly for use of these locations. In addition, Martin Sublease, L.L.C., which is controlled by Martin Investments, Inc., leases, and then subleases to the Company, another 54 branch office locations and two used car
lots for amounts greater than are paid in the underlying leases. This spread is generally to cover property operating cost or improvements made directly by these entities. In the opinion of management, rates paid for these are comparable to those
obtained from third parties. Total rents paid were $1,102,684 and $1,043,646 for the six months and $546,708 and $523,821 for the three months ended March 25, 2009 and 2008, respectively, and are included in operating expense in the
accompanying unaudited Consolidated Statements of Operations.

The Company receives commissions from sales of motor club memberships from
an entity, owned by the Companys President and the late founders three children (of which one is a Director), pursuant to an Agency Sales Agreement. Commissions earned on the sale of these memberships were $789,550 and $909,150 for the
six months and $325,711 and $396,834 for the three months ended March 25, 2009 and 2008, respectively.

The Company also engages from
time to time in other transactions with related parties. Refer to the Related Party Transactions disclosure in the notes to the Companys Consolidated Financial Statements as of and for the year ended September 25, 2008.

NOTE 10  CONTINGENT LIABILITIES

The Company is a party to litigation arising in the normal course of business. With respect to all such lawsuits, claims, and proceedings, the Company establishes reserves when it is probable a liability has been incurred and the amount can
reasonably be estimated. In the opinion of management, the resolution of such matters will not have a material effect on the financial position or results of operations of the Company.

NOTE 11  DISCRETIONARY BONUSES

From time to time, the Company pays discretionary bonuses to
its employees. The amount of these bonuses charged to operating expenses was $1,296,749 and $1,201,774 for the six months and $707,283 and $623,119 for the three months ended March 25, 2009 and 2008, respectively.

NOTE 12  SEGMENT FINANCIAL INFORMATION

Statement of Financial Accounting Standards No. 131, Disclosure about Segments of an Enterprise and Related Information (SFAS 131), requires companies to determine segments based on how management makes decisions about
allocating resources to segments and measuring their performance.

The Company has two reportable segments: Consumer Finance and Sales and
Automotive Finance and Sales.



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Notes to Consolidated Financial Statements (Unaudited)



NOTE 12  SEGMENT FINANCIAL INFORMATION (CONTINUED)



Consumer finance and sales segment

This segment is comprised of original core operations of the Company: the small consumer loan business in the four states in which the Company operates. The 103 offices that make up this segment
are similar in size and in the markets they serve. All, with few exceptions, offer consumer goods for sale acting as an agent for another subsidiary of the Company, Home Furniture Mart Inc., which is aggregated in this segment since its sales are
generated through these finance offices. This segment is structured with branch management reporting through a regional management level to an operational manager and ultimately to the chief operating decision maker.

Automotive finance and sales segment

This segment
is comprised of three used automobile sales locations and offers financing in conjunction with these sales. These locations target similar customers in the Bainbridge, GA, Columbus, GA and Dublin, GA markets and surrounding areas who generally
cannot qualify for traditional financing. The sales and the financing organizations are aggregated in the segment. A general manager is responsible for sales and finance administration at each of the locations and reports to an operational manager
and ultimately to the chief operating decision maker.

Accounting policies of the segments are the same as those described in the summary
of significant accounting policies in Note 1 to the Consolidated Financial Statements in the Companys 2008 Annual Report on Form 10-K. Performance is measured by various factors such as segment profit, loan volumes and delinquency and loss
management. All corporate expenses are allocated to the segments. Provision for income taxes are not allocated to segments.



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Notes to Consolidated Financial Statements (Unaudited)



NOTE 12  SEGMENT FINANCIAL INFORMATION (CONTINUED)



|                                               |  |                                  |         |   |                                    |   |        |                |  |   |         |  
|---------------------------------------------- |  | -------------------------------- | ------- | - | ---------------------------------- | - | ------ | -------------- |  | - | ------- | -
|Six months ended March 25, 2009                |  | Consumer Finance& Sales Division |         |   | Automotive Finance& Sales Division |   |        | Total Segments | 
|In Thousands                                   |  | (Unaudited)                      |        
|Net revenues (loss) before retail sales        |  | $                                | 7,347   |   |                                    | $ | (176   | )              |  | $ | 7,171   |  
|                                               |  |                                  |         |   |                                    |   |        |                |  |   |         |  
|Gross margin on retail sales                   |  |                                  | 1,599   |   |                                    |   | 1,344  |                |  |   | 2,943   |  
|                                               |  |                                  |         |   |                                    |   |        |                |  |   |         |  
|Segment operating expenses                     |  |                                  | (13,162 | ) |                                    |   | (1,773 | )              |  |   | (14,935 | )
|                                               |  |                                  |         |   |                                    |   |        |                |  |   |         |  
|Segment operating loss                         |  | $                                | (4,216  | ) |                                    | $ | (605   | )              |  | $ | (4,821  | )
|                                               |  |                                  |         |   |                                    |   |        |                |  |   |         |  
|                                               |  |                                  |        
|March 25, 2009                                 |  |                                  |         |   |                                    |   |        |                | 
|In Thousands                                   |  |                                  |         |   |                                    |   |        |                | 
|Assets                                         |  |                                  |         |   |                                    |   |        |                |  |   |         |  
|Total segment assets                           |  | $                                | 44,887  |   |                                    | $ | 25,758 |                |  | $ | 70,645  |  
|                                               |  |                                  |        
|RECONCILIATION:                                |  |                                  |         |   |                                    |   |        | March 25, 2009 | 
|                                               |  |                                  |         |   |                                    |   |        | (Thousands)    | 
|Assets:                                        |  |                                  |         |   |                                    |   |        |                |  |   |         |  
|Total assets for reportable segments           |  |                                  |         |   |                                    |   |        |                |  | $ | 70,645  |  
|                                               |  |                                  |        
|Cash and cash equivalents at corporate level   |  |                                  |         |   |                                    |   |        |                |  |   | 652     |  
|Other receivables at corporate level           |  |                                  |         |   |                                    |   |        |                |  |   | 1,454   |  
|Property and equipment, net at corporate level |  |                                  |         |   |                                    |   |        |                |  |   | 1,078   |  
|Other assets at corporate level                |  |                                  |         |   |                                    |   |        |                |  |   | 2,274   |  
|                                               |  |                                  |         |   |                                    |   |        |                |  |   |         |  
|Consolidated Assets                            |  |                                  |         |   |                                    |   |        |                |  | $ | 76,103  |  
|                                               |  |                                  |         |   |                                    |   |        |                |  |   |         |  



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Notes to Consolidated Financial Statements (Unaudited)



NOTE 12  SEGMENT FINANCIAL INFORMATION (CONTINUED)



|                                               |  |                                  |         |   |                                    |   |        |                |  |   |         |  
|---------------------------------------------- |  | -------------------------------- | ------- | - | ---------------------------------- | - | ------ | -------------- |  | - | ------- | -
|Six months ended March 25, 2008                |  | Consumer Finance& Sales Division |         |   | Automotive Finance& Sales Division |   |        | Total Segments | 
|In Thousands                                   |  | (Unaudited)                      |        
|Net revenues before retail sales               |  | $                                | 7,202   |   |                                    | $ | 321    |                |  | $ | 7,523   |  
|                                               |  |                                  |         |   |                                    |   |        |                |  |   |         |  
|Gross margin on retail sales                   |  |                                  | 1,860   |   |                                    |   | 1,709  |                |  |   | 3,569   |  
|                                               |  |                                  |         |   |                                    |   |        |                |  |   |         |  
|Segment operating expenses                     |  |                                  | (11,945 | ) |                                    |   | (1,936 | )              |  |   | (13,881 | )
|                                               |  |                                  |         |   |                                    |   |        |                |  |   |         |  
|Segment operating profit (loss)                |  | $                                | (2,883  | ) |                                    | $ | 94     |                |  | $ | (2,789  | )
|                                               |  |                                  |         |   |                                    |   |        |                |  |   |         |  
|                                               |  |                                  |        
|March 25, 2008                                 |  |                                  |         |   |                                    |   |        |                | 
|In Thousands                                   |  |                                  |         |   |                                    |   |        |                | 
|Assets                                         |  |                                  |         |   |                                    |   |        |                |  |   |         |  
|Total segment assets                           |  | $                                | 58,711  |   |                                    | $ | 27,919 |                |  | $ | 86,630  |  
|                                               |  |                                  |        
|RECONCILIATION:                                |  |                                  |         |   |                                    |   |        | March 25, 2008 | 
|                                               |  |                                  |         |   |                                    |   |        | (Thousands)    | 
|Assets:                                        |  |                                  |         |   |                                    |   |        |                |  |   |         |  
|Total assets for reportable segments           |  |                                  |         |   |                                    |   |        |                |  | $ | 86,630  |  
|                                               |  |                                  |        
|Cash and cash equivalents at corporate level   |  |                                  |         |   |                                    |   |        |                |  |   | 10,875  |  
|Other receivables at corporate level           |  |                                  |         |   |                                    |   |        |                |  |   | 856     |  
|Property and equipment, net at corporate level |  |                                  |         |   |                                    |   |        |                |  |   | 1,279   |  
|Deferred income taxes at corporate level       |  |                                  |         |   |                                    |   |        |                |  |   | 1,163   |  
|Other assets at corporate level                |  |                                  |         |   |                                    |   |        |                |  |   | 1,876   |  
|                                               |  |                                  |         |   |                                    |   |        |                |  |   |         |  
|Consolidated Assets                            |  |                                  |         |   |                                    |   |        |                |  | $ | 102,679 |  
|                                               |  |                                  |         |   |                                    |   |        |                |  |   |         |  



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Notes to Consolidated Financial Statements (Unaudited)



NOTE 12  SEGMENT FINANCIAL INFORMATION (CONTINUED)





|                                               |  |                                  |        |   |                                    |   |        |                |  |   |        |  
|---------------------------------------------- |  | -------------------------------- | ------ | - | ---------------------------------- | - | ------ | -------------- |  | - | ------ | -
|Three months ended March 25, 2009              |  | Consumer Finance& Sales Division |        |   | Automotive Finance& Sales Division |   |        | TotalSegments  | 
|In Thousands                                   |  | (Unaudited)                      |       
|Net revenues (loss) before retail sales        |  | $                                | 3,236  |   |                                    | $ | (73    | )              |  | $ | 3,163  |  
|                                               |  |                                  |        |   |                                    |   |        |                |  |   |        |  
|Gross margin on retail sales                   |  |                                  | 656    |   |                                    |   | 673    |                |  |   | 1,329  |  
|                                               |  |                                  |        |   |                                    |   |        |                |  |   |        |  
|Segment operating expenses                     |  |                                  | (6,809 | ) |                                    |   | (875   | )              |  |   | (7,684 | )
|                                               |  |                                  |        |   |                                    |   |        |                |  |   |        |  
|Segment operating loss                         |  | $                                | (2,917 | ) |                                    | $ | (275   | )              |  | $ | (3,192 | )
|                                               |  |                                  |        |   |                                    |   |        |                |  |   |        |  
|                                               |  |                                  |       
|March 25, 2009                                 |  |                                  |        |   |                                    |   |        |                | 
|In Thousands                                   |  |                                  |        |   |                                    |   |        |                | 
|Assets                                         |  |                                  |        |   |                                    |   |        |                |  |   |        |  
|Total segment assets                           |  | $                                | 44,887 |   |                                    | $ | 25,758 |                |  | $ | 70,645 |  
|                                               |  |                                  |       
|RECONCILIATION:                                |  |                                  |        |   |                                    |   |        | March 25, 2009 | 
|                                               |  |                                  |        |   |                                    |   |        | (Thousands)    | 
|Assets:                                        |  |                                  |        |   |                                    |   |        |                |  |   |        |  
|Total assets for reportable segments           |  |                                  |        |   |                                    |   |        |                |  | $ | 70,645 |  
|                                               |  |                                  |       
|Cash and cash equivalents at corporate level   |  |                                  |        |   |                                    |   |        |                |  |   | 652    |  
|Other receivables at corporate level           |  |                                  |        |   |                                    |   |        |                |  |   | 1,454  |  
|Property and equipment, net at corporate level |  |                                  |        |   |                                    |   |        |                |  |   | 1,078  |  
|Other assets at corporate level                |  |                                  |        |   |                                    |   |        |                |  |   | 2,274  |  
|                                               |  |                                  |        |   |                                    |   |        |                |  |   |        |  
|Consolidated Assets                            |  |                                  |        |   |                                    |   |        |                |  | $ | 76,103 |  
|                                               |  |                                  |        |   |                                    |   |        |                |  |   |        |  



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The Money Tree Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)



NOTE 12  SEGMENT FINANCIAL INFORMATION (CONTINUED)





|                                               |  |                                  |        |   |                                    |   |        |                |  |   |         |  
|---------------------------------------------- |  | -------------------------------- | ------ | - | ---------------------------------- | - | ------ | -------------- |  | - | ------- | -
|Three months ended March 25, 2008              |  | Consumer Finance& Sales Division |        |   | Automotive Finance& Sales Division |   |        | Total Segments | 
|In Thousands                                   |  | (Unaudited)                      |       
|Net revenues before retail sales               |  | $                                | 2,876  |   |                                    | $ | 128    |                |  | $ | 3,004   |  
|                                               |  |                                  |        |   |                                    |   |        |                |  |   |         |  
|Gross margin on retail sales                   |  |                                  | 673    |   |                                    |   | 939    |                |  |   | 1,612   |  
|                                               |  |                                  |        |   |                                    |   |        |                |  |   |         |  
|Segment operating expenses                     |  |                                  | (6,041 | ) |                                    |   | (1,008 | )              |  |   | (7,049  | )
|                                               |  |                                  |        |   |                                    |   |        |                |  |   |         |  
|Segment operating profit (loss)                |  | $                                | (2,492 | ) |                                    | $ | 59     |                |  | $ | (2,433  | )
|                                               |  |                                  |        |   |                                    |   |        |                |  |   |         |  
|                                               |  |                                  |       
|March 25, 2008                                 |  |                                  |        |   |                                    |   |        |                | 
|In Thousands                                   |  |                                  |        |   |                                    |   |        |                | 
|Assets                                         |  |                                  |        |   |                                    |   |        |                |  |   |         |  
|Total segment assets                           |  | $                                | 58,711 |   |                                    | $ | 27,919 |                |  | $ | 86,630  |  
|                                               |  |                                  |       
|RECONCILIATION:                                |  |                                  |        |   |                                    |   |        | March 25, 2008 | 
|                                               |  |                                  |        |   |                                    |   |        | (Thousands)    | 
|Assets:                                        |  |                                  |        |   |                                    |   |        |                |  |   |         |  
|Total assets for reportable segments           |  |                                  |        |   |                                    |   |        |                |  | $ | 86,630  |  
|                                               |  |                                  |       
|Cash and cash equivalents at corporate level   |  |                                  |        |   |                                    |   |        |                |  |   | 10,875  |  
|Other receivables at corporate level           |  |                                  |        |   |                                    |   |        |                |  |   | 856     |  
|Property and equipment, net at corporate level |  |                                  |        |   |                                    |   |        |                |  |   | 1,279   |  
|Deferred income taxes at corporate level       |  |                                  |        |   |                                    |   |        |                |  |   | 1,163   |  
|Other assets at corporate level                |  |                                  |        |   |                                    |   |        |                |  |   | 1,876   |  
|                                               |  |                                  |        |   |                                    |   |        |                |  |   |         |  
|Consolidated Assets                            |  |                                  |        |   |                                    |   |        |                |  | $ | 102,679 |  
|                                               |  |                                  |        |   |                                    |   |        |                |  |   |         |  



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Item 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations

Forward-Looking Statements

The discussion set forth below, as well as other portions of this quarterly report, contains forward-looking statements within the meaning of federal securities law. Words such as may, will,
expect, anticipate, believe, estimate, continue, predict, or other similar words, identify forward-looking statements. Forward-looking statements include statements regarding
our managements intent, belief or current expectation about, among other things, trends affecting the markets in which we operate, our business, our financial condition and our growth strategies. Although we believe that the expectation
reflected in these forward-looking statements are based on reasonable assumptions, forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Actual results may differ materially from those predicted in
the forward-looking statements as a result of various factors, including, but not limited to, those risk factors set forth in our post-effective amendment to registration statement on Form S-1 filed with the Securities and Exchange Commission on
April 10, 2009. Other factors not identified herein could also have such an effect. If any of these risk factors occur, they could have an adverse effect on our business, financial condition and results of operations. When considering
forward-looking statements keep these risks in mind. These forward-looking statements are made as of the date of this filing. You should not place undo reliance on any forward-looking statement. We are not obligated to update forward-looking
statements and will not update any forward-looking statements in this quarterly report to reflect future events or developments.

The following discussion should be read in conjunction with our unaudited consolidated financial statements and related notes and other financial data included elsewhere in this report. See also the notes to our consolidated financial
statements, Selected Consolidated Financial Data and Managements Discussion and Analysis of Financial Condition and Results of Operations contained in our annual report on Form 10-K for the year ended September 25, 2008.

Overview

We make consumer
finance loans and provide other financial products and services through our branch offices in Georgia, Alabama, Louisiana and Florida. We sell retail merchandise, principally furniture, appliances and electronics, at certain of our branch office
locations and operate three used automobile dealerships in the State of Georgia. We also offer insurance products, prepaid phone services and automobile club memberships to our loan customers.

We fund our consumer loan demand through a combination of cash collections from our consumer loans, proceeds raised from the sale of
debentures and demand notes and loans from various banks and other financial institutions. Our consumer loan business consists of making, purchasing and servicing direct consumer loans, consumer sales finance contracts and motor vehicle installment
sales contracts. Direct consumer loans generally serve individuals with limited access to other sources of consumer credit, such as banks, savings and loans, other consumer finance businesses and credit cards. Direct consumer loans are general loans
made typically to people who need money for some unusual or unforeseen expense, for the purpose of paying off an accumulation of small debts or for the purchase of furniture and appliances. The following table sets forth certain information about
the components of our finance receivables for the periods presented:



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Description of Loans and Contracts



|                                           |  |                                                |            |   |                                              |   |            |      |  |   |            |   |  |   |            |  
|------------------------------------------ |  | ---------------------------------------------- | ---------- | - | -------------------------------------------- | - | ---------- | ---- |  | - | ---------- | - |  | - | ---------- | -
|                                           |  | As of, or for, the ThreeMonths Ended
March 25, |            |   | As of, or for, the SixMonths Ended March 25, |  
|                                           |  | 2009                                           |            |   | 2008                                         |   |            | 2009 |  |   | 2008       |  
|Direct Consumer Loans:                     |  |                                                |            |   |                                              |   |            |      |  |   |            |   |  |   |            |  
|Number of Loans Made to New Borrowers      |  |                                                | 4,576      |   |                                              |   | 3,299      |      |  |   | 20,242     |   |  |   | 8,797      |  
|Number of Loans Made to Former Borrowers   |  |                                                | 17,386     |   |                                              |   | 12,065     |      |  |   | 29,827     |   |  |   | 27,227     |  
|Number of Loans Made to Existing Borrowers |  |                                                | 11,632     |   |                                              |   | 27,048     |      |  |   | 25,426     |   |  |   | 57,076     |  
|Total Number of Loans Made                 |  |                                                | 33,594     |   |                                              |   | 42,412     |      |  |   | 75,495     |   |  |   | 93,100     |  
|Total Volume of Loans Made                 |  | $                                              | 10,734,489 |   |                                              | $ | 14,434,528 |      |  | $ | 26,527,238 |   |  | $ | 34,375,610 |  
|Average Size of Loans Made                 |  | $                                              | 320        |   |                                              | $ | 340        |      |  | $ | 351        |   |  | $ | 369        |  
|Number of Loans Outstanding                |  |                                                | 58,842     |   |                                              |   | 78,607     |      |  |   | 58,842     |   |  |   | 78,607     |  
|Total of Loans Outstanding*                |  | $                                              | 27,566,820 |   |                                              | $ | 37,901,014 |      |  | $ | 27,566,820 |   |  | $ | 37,901,014 |  
|Percent of Loans Outstanding               |  |                                                | 37.22      | % |                                              |   | 43.60      | %    |  |   | 37.22      | % |  |   | 43.60      | %
|Average Balance on Outstanding Loans       |  | $                                              | 468        |   |                                              | $ | 482        |      |  | $ | 468        |   |  | $ | 482        |  
|                                           |  |                                                |            |  
|Motor Vehicle Installment Sales Contracts: |  |                                                |            |   |                                              |   |            |      |  |   |            |   |  |   |            |  
|Total Number of Contracts Made             |  |                                                | 201        |   |                                              |   | 235        |      |  |   | 385        |   |  |   | 425        |  
|Total Volume of Contracts Made             |  | $                                              | 3,723,500  |   |                                              | $ | 4,381,912  |      |  | $ | 7,047,336  |   |  | $ | 7,878,166  |  
|Average Size of Contracts Made             |  | $                                              | 18,525     |   |                                              | $ | 18,646     |      |  | $ | 18,305     |   |  | $ | 18,537     |  
|Number of Contracts Outstanding            |  |                                                | 2,721      |   |                                              |   | 2,819      |      |  |   | 2,721      |   |  |   | 2,819      |  
|Total of Contracts Outstanding*            |  | $                                              | 30,329,656 |   |                                              | $ | 32,220,882 |      |  | $ | 30,329,656 |   |  | $ | 32,220,882 |  
|Percent of Total Loans and Contracts       |  |                                                | 40.95      | % |                                              |   | 37.06      | %    |  |   | 40.95      | % |  |   | 37.06      | %
|Average Balance on Outstanding Contracts   |  | $                                              | 11,147     |   |                                              | $ | 11,430     |      |  | $ | 11,147     |   |  | $ | 11,430     |  
|                                           |  |                                                |            |  
|Consumer Sales Finance Contracts:          |  |                                                |            |   |                                              |   |            |      |  |   |            |   |  |   |            |  
|Number of Contracts Made to New Customers  |  |                                                | 458        |   |                                              |   | 41         |      |  |   | 1,318      |   |  |   | 79         |  
|Number of Loans Made to Former Customers   |  |                                                | 12         |   |                                              |   | 566        |      |  |   | 42         |   |  |   | 1,574      |  
|Number of Loans Made to Existing Customers |  |                                                | 588        |   |                                              |   | 648        |      |  |   | 1,478      |   |  |   | 1,745      |  
|Total Contracts Made                       |  |                                                | 1,058      |   |                                              |   | 1,255      |      |  |   | 2,838      |   |  |   | 3,398      |  
|Total Volume of Contracts Made             |  | $                                              | 3,131,483  |   |                                              | $ | 3,866,491  |      |  | $ | 9,033,890  |   |  | $ | 10,287,704 |  
|Number of Contracts Outstanding            |  |                                                | 7,069      |   |                                              |   | 7,180      |      |  |   | 7,069      |   |  |   | 7,180      |  
|Total of Contracts Outstanding*            |  | $                                              | 16,167,366 |   |                                              | $ | 16,813,744 |      |  | $ | 16,167,366 |   |  | $ | 16,813,744 |  
|Percent of Total Loans and Contracts       |  |                                                | 21.83      | % |                                              |   | 19.34      | %    |  |   | 21.83      | % |  |   | 19.34      | %
|Average Balance of Outstanding Contracts   |  | $                                              | 2,287      |   |                                              | $ | 2,342      |      |  | $ | 2,287      |   |  | $ | 2,342      |  



|* | Contracts outstanding are exclusive of the following aggregate amounts of bankrupt accounts: $7,136,344 as of March 25, 2009 and $6,511,657 as of
March 25, 2008.
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------



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Below is a table showing our total gross outstanding finance receivables and bankrupt
accounts:



|                                               |  |                 |            |      |   |           
|---------------------------------------------- |  | --------------- | ---------- | ---- | - | ----------
|                                               |  | As of March 25,
|                                               |  | 2009            |            | 2008
|Total Finance Receivables Outstanding (gross): |  |                 |            |      |   |           
|Direct Consumer Loans                          |  | $               | 27,566,820 |      | $ | 37,901,014
|Motor Vehicle Installment                      |  |                 | 30,329,656 |      |   | 32,220,882
|Consumer Sales Finance                         |  |                 | 16,167,366 |      |   | 16,813,744
|Bankrupt Accounts                              |  |                 | 7,136,344  |      |   | 6,511,657 
|                                               |  |                 |            |      |   |           
|Total Gross Outstanding                        |  | $               | 81,200,186 |      | $ | 93,447,297
|                                               |  |                 |            |      |   |           

Below is a roll-forward of the balance of each category of our outstanding finance
receivables. Loans originated reflect the gross amount of loans made or purchased during the period presented inclusive of pre-computed interest, fees and insurance premiums. Collections represent cash receipts in the form of repayments made on our
loans as reflected in our Consolidated Statements of Cash Flows. Refinancings represent the amount of the pay off of loans refinanced. Charge offs represent the gross amount of loans charged off as uncollectible (charge offs are shown net of
non-file insurance receipts in our Allowance for Credit Losses). Rebates represent reductions to gross loan amounts of precomputed interest and insurance premiums resulting from loans refinanced and other loans paid off before maturity. Other
adjustments primarily represent accounts transferred to and from the department that administers bankrupt accounts.



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|                                           |  |                                     |             |   |                                   |   |             |      |  |   |             |   |  |   |             |  
|------------------------------------------ |  | ----------------------------------- | ----------- | - | --------------------------------- | - | ----------- | ---- |  | - | ----------- | - |  | - | ----------- | -
|                                           |  | For the Three Months EndedMarch 25, |             |   | For the Six Months EndedMarch 25, |  
|                                           |  | 2009                                |             |   | 2008                              |   |             | 2009 |  |   | 2008        |  
|Direct Consumer Loans:                     |  |                                     |             |   |                                   |   |             |      |  |   |             |   |  |   |             |  
|Balancebeginning                          |  | $                                   | 33,498,425  |   |                                   | $ | 41,477,349  |      |  | $ | 34,859,944  |   |  | $ | 40,719,291  |  
|Finance receivables originated             |  |                                     | 10,734,469  |   |                                   |   | 14,434,528  |      |  |   | 26,527,238  |   |  |   | 34,375,610  |  
|Collections                                |  |                                     | (11,452,580 | ) |                                   |   | (13,141,047 | )    |  |   | (22,147,286 | ) |  |   | (25,286,328 | )
|Refinances                                 |  |                                     | (2,405,197  | ) |                                   |   | (3,263,506  | )    |  |   | (5,829,971  | ) |  |   | (7,903,072  | )
|Charge offs, gross                         |  |                                     | (2,157,637  | ) |                                   |   | (859,943    | )    |  |   | (4,269,547  | ) |  |   | (2,253,612  | )
|Rebates / other adjustments                |  |                                     | (650,660    | ) |                                   |   | (746,367    | )    |  |   | (1,573,558  | ) |  |   | (1,750,875  | )
|                                           |  |                                     |             |   |                                   |   |             |      |  |   |             |   |  |   |             |  
|Balanceend                                |  | $                                   | 27,566,820  |   |                                   | $ | 37,901,014  |      |  | $ | 27,566,820  |   |  | $ | 37,901,014  |  
|                                           |  |                                     |             |   |                                   |   |             |      |  |   |             |   |  |   |             |  
|                                           |  |                                     |             |  
|Consumer Sales Finance Contracts:          |  |                                     |             |   |                                   |   |             |      |  |   |             |   |  |   |             |  
|Balancebeginning                          |  | $                                   | 17,222,368  |   |                                   | $ | 16,543,773  |      |  | $ | 16,793,743  |   |  | $ | 14,466,682  |  
|Finance receivables originated             |  |                                     | 3,131,483   |   |                                   |   | 3,866,491   |      |  |   | 9,033,890   |   |  |   | 10,287,703  |  
|Collections                                |  |                                     | (2,047,956  | ) |                                   |   | (1,898,264  | )    |  |   | (3,929,651  | ) |  |   | (3,517,767  | )
|Refinances                                 |  |                                     | (964,997    | ) |                                   |   | (1,041,020  | )    |  |   | (2,844,972  | ) |  |   | (2,824,155  | )
|Charge offs, gross                         |  |                                     | (848,631    | ) |                                   |   | (248,883    | )    |  |   | (2,077,711  | ) |  |   | (487,841    | )
|Rebates / other adjustments                |  |                                     | (324,901    | ) |                                   |   | (408,353    | )    |  |   | (807,933    | ) |  |   | (1,110,878  | )
|                                           |  |                                     |             |   |                                   |   |             |      |  |   |             |   |  |   |             |  
|Balanceend                                |  | $                                   | 16,167,366  |   |                                   | $ | 16,813,744  |      |  | $ | 16,167,366  |   |  | $ | 16,813,744  |  
|                                           |  |                                     |             |   |                                   |   |             |      |  |   |             |   |  |   |             |  
|                                           |  |                                     |             |  
|Motor Vehicle Installment Sales Contracts: |  |                                     |             |   |                                   |   |             |      |  |   |             |   |  |   |             |  
|Balancebeginning                          |  | $                                   | 30,260,514  |   |                                   | $ | 31,895,347  |      |  | $ | 30,707,329  |   |  | $ | 32,259,968  |  
|Finance receivables originated             |  |                                     | 3,723,500   |   |                                   |   | 4,381,912   |      |  |   | 7,047,362   |   |  |   | 7,878,167   |  
|Collections                                |  |                                     | (2,949,677  | ) |                                   |   | (3,519,681  | )    |  |   | (5,948,874  | ) |  |   | (6,859,026  | )
|Charge offs, gross                         |  |                                     | (389,270    | ) |                                   |   | (310,416    | )    |  |   | (819,020    | ) |  |   | (615,100    | )
|Rebates / other adjustments                |  |                                     | (315,411    | ) |                                   |   | (226,280    | )    |  |   | (657,141    | ) |  |   | (443,127    | )
|                                           |  |                                     |             |   |                                   |   |             |      |  |   |             |   |  |   |             |  
|Balanceend                                |  | $                                   | 30,329,656  |   |                                   | $ | 32,220,882  |      |  | $ | 30,329,656  |   |  | $ | 32,220,882  |  
|                                           |  |                                     |             |   |                                   |   |             |      |  |   |             |   |  |   |             |  
|                                           |  |                                     |             |  
|Total Active Accounts:                     |  |                                     |             |   |                                   |   |             |      |  |   |             |   |  |   |             |  
|Balancebeginning                          |  | $                                   | 80,981,307  |   |                                   | $ | 89,916,469  |      |  | $ | 82,361,016  |   |  | $ | 87,445,941  |  
|Loans originated                           |  |                                     | 17,589,452  |   |                                   |   | 22,682,931  |      |  |   | 42,608,490  |   |  |   | 52,541,480  |  
|Collections                                |  |                                     | (16,450,213 | ) |                                   |   | (18,558,992 | )    |  |   | (32,025,811 | ) |  |   | (35,663,121 | )
|Refinances                                 |  |                                     | (3,370,194  | ) |                                   |   | (4,304,526  | )    |  |   | (8,674,943  | ) |  |   | (10,727,227 | )
|Charge offs, gross                         |  |                                     | (3,395,538  | ) |                                   |   | (1,419,242  | )    |  |   | (7,166,278  | ) |  |   | (3,356,553  | )
|Rebates / other adjustments                |  |                                     | (1,290,972  | ) |                                   |   | (1,381,000  | )    |  |   | (3,038,632  | ) |  |   | (3,304,880  | )
|                                           |  |                                     |             |   |                                   |   |             |      |  |   |             |   |  |   |             |  
|Balanceend                                |  | $                                   | 74,063,842  |   |                                   | $ | 86,935,640  |      |  | $ | 74,063,842  |   |  | $ | 86,935,640  |  
|                                           |  |                                     |             |   |                                   |   |             |      |  |   |             |   |  |   |             |  
|                                           |  |                                     |             |  
|Total Bankrupt Accounts:                   |  |                                     |             |   |                                   |   |             |      |  |   |             |   |  |   |             |  
|Balancebeginning                          |  | $                                   | 7,123,584   |   |                                   | $ | 6,367,294   |      |  | $ | 6,794,358   |   |  | $ | 6,115,375   |  
|Charge offs, gross                         |  |                                     | (331,240    | ) |                                   |   | (119,370    | )    |  |   | (633,569    | ) |  |   | (298,710    | )
|Adjustments                                |  |                                     | 344,000     |   |                                   |   | 263,733     |      |  |   | 975,555     |   |  |   | 694,992     |  
|                                           |  |                                     |             |   |                                   |   |             |      |  |   |             |   |  |   |             |  
|Balanceend                                |  | $                                   | 7,136,344   |   |                                   | $ | 6,511,657   |      |  | $ | 7,136,344   |   |  | $ | 6,511,657   |  
|                                           |  |                                     |             |   |                                   |   |             |      |  |   |             |   |  |   |             |  
|Total Gross Outstanding Receivables        |  | $                                   | 81,200,186  |   |                                   | $ | 93,447,297  |      |  | $ | 81,200,186  |   |  | $ | 93,447,297  |  
|                                           |  |                                     |             |   |                                   |   |             |      |  |   |             |   |  |   |             |  



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Below is a reconciliation of the amounts of the loans originated and repaid (collections)
from the receivable roll-forward to the amounts shown in our Consolidated Statements of Cash Flows.



|                                                      |  |                            |             |   |      |   |             |  
|----------------------------------------------------- |  | -------------------------- | ----------- | - | ---- | - | ----------- | -
|                                                      |  | Six Months Ended March 25, |            
|                                                      |  | 2009                       |             |   | 2008 |  
|Finance Receivables Originated:                       |  |                            |             |   |      |   |             |  
|Direct consumer                                       |  | $                          | 26,527,238  |   |      | $ | 34,375,610  |  
|Consumer sales finance                                |  |                            | 9,033,890   |   |      |   | 10,287,704  |  
|Motor vehicle installment sales                       |  |                            | 7,047,362   |   |      |   | 7,878,166   |  
|                                                      |  |                            |             |   |      |   |             |  
|Total gross finance receivables originated            |  |                            | 42,608,490  |   |      |   | 52,541,480  |  
|Non-cash items included in gross finance receivables* |  |                            | (12,060,654 | ) |      |   | (14,185,060 | )
|                                                      |  |                            |             |   |      |   |             |  
|Finance receivables originatedcash flows             |  | $                          | 30,547,836  |   |      | $ | 38,356,420  |  
|                                                      |  |                            |             |   |      |   |             |  
|                                                      |  |                           
|Finance Receivables Repaid:                           |  |                            |             |   |      |   |             |  
|Collections                                           |  |                            |             |   |      |   |             |  
|Direct consumer                                       |  | $                          | 22,147,286  |   |      | $ | 25,286,328  |  
|Consumer sales finance                                |  |                            | 3,929,651   |   |      |   | 3,517,767   |  
|Motor vehicle installment sales                       |  |                            | 5,948,874   |   |      |   | 6,859,026   |  
|                                                      |  |                            |             |   |      |   |             |  
|Finance receivables repaidcash flows                 |  | $                          | 32,025,811  |   |      | $ | 35,663,121  |  
|                                                      |  |                            |             |   |      |   |             |  



|* | Includes precomputed interest and fees (since these amounts are included in the gross amount of finance receivables originated but are not advanced in the form
of cash to customers) and refinanced receivables balances (since there is no cash generated from the repayment of original finance receivables refinanced).
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Segments and Seasonality

We segment our business operations into the
following two segments:



| |  |  | consumer finance and sales; and
| | - |  | -------------------------------



| |  |  | automotive finance and sales.
| | - |  | -----------------------------

The consumer finance and sales segment is comprised primarily of small consumer loans and sales of consumer goods such as furniture, appliances and electronics. We typically experience our strongest financial
performance for the consumer finance and sales segment during the holiday season, which is our first fiscal quarter ending December 25.

The automotive finance and sales segment is comprised exclusively of used vehicle sales and their related financing. We typically experience our strongest financial performance for the automotive finance and sales
segment during our second fiscal quarter ending March 25 when demand for used cars is at its highest. Please refer to Note 12 in the Notes to Consolidated Financial Statements for a breakdown of our operations by segment.

Net Interest Margin

A principal component of our profitability is our net interest margin, which is the difference between the interest that we earn on finance receivables and the interest that we pay on borrowed funds. In some states, statutes regulate the
interest rates that we may charge our customers, while, in other locations, competitive market conditions establish interest rates that we may charge. Differences also exist in the interest rates that we earn on the various components of our finance
receivable portfolio.



22



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Unlike our interest income, our interest expense is sensitive to general market interest
rate fluctuations. These general market fluctuations directly impact our cost of funds. Our general limited ability to increase the interest rates earned on new and existing finance receivables restricts our ability to react to increases in our cost
of funds. Accordingly, increases in market interest rates generally will narrow our interest rate spread and lower our profitability, while decreases in market interest rates generally will widen our interest rate spread and increase our
profitability. Significant increases in market interest rates will likely result in a reduction in our liquidity and profitability and impair our ability to pay interest and principal on the debentures. See Quantitative and Qualitative
Disclosures About Market Risk below.

The following table presents important data relating to our net interest
margin:



|                                                               |  |                                                |            |   |                                              |   |            |      |  |   |            |   |  |   |            |  
|-------------------------------------------------------------- |  | ---------------------------------------------- | ---------- | - | -------------------------------------------- | - | ---------- | ---- |  | - | ---------- | - |  | - | ---------- | -
|                                                               |  | As of, or for, the Three MonthsEnded March 25, |            |   | As of, or for, the Six MonthsEnded March 25, |  
|                                                               |  | 2009                                           |            |   | 2008                                         |   |            | 2009 |  |   | 2008       |  
|Average net finance receivables(1)                             |  | $                                              | 71,685,469 |   |                                              | $ | 80,135,788 |      |  | $ | 73,796,961 |   |  | $ | 80,192,195 |  
|Average notes payable(2)                                       |  | $                                              | 78,297,049 |   |                                              | $ | 87,545,341 |      |  | $ | 80,082,044 |   |  | $ | 87,929,858 |  
|                                                               |  |                                                |            |  
|Interest income                                                |  | $                                              | 2,770,797  |   |                                              | $ | 3,765,409  |      |  | $ | 6,119,809  |   |  | $ | 7,356,562  |  
|Loan fee income, excluding delinquency fees                    |  |                                                | 934,992    |   |                                              |   | 1,083,754  |      |  |   | 2,180,629  |   |  |   | 2,480,793  |  
|                                                               |  |                                                |            |   |                                              |   |            |      |  |   |            |   |  |   |            |  
|Total interest and fee income                                  |  |                                                | 3,705,789  |   |                                              |   | 4,849,163  |      |  |   | 8,300,438  |   |  |   | 9,837,355  |  
|Interest expense                                               |  |                                                | 1,868,843  |   |                                              |   | 2,046,379  |      |  |   | 3,786,066  |   |  |   | 4,111,892  |  
|                                                               |  |                                                |            |   |                                              |   |            |      |  |   |            |   |  |   |            |  
|Net interest and fee income before provision for credit losses |  | $                                              | 1,836,946  |   |                                              | $ | 2,802,784  |      |  | $ | 4,514,372  |   |  | $ | 5,725,463  |  
|                                                               |  |                                                |            |   |                                              |   |            |      |  |   |            |   |  |   |            |  
|Average interest rate earned (annualized)                      |  |                                                | 20.7       | % |                                              |   | 24.2       | %    |  |   | 22.5       | % |  |   | 24.5       | %
|Average interest rate paid (annualized)                        |  |                                                | 9.5        | % |                                              |   | 9.4        | %    |  |   | 9.5        | % |  |   | 9.4        | %
|                                                               |  |                                                |            |  
|Net interest rate spread (annualized)                          |  |                                                | 11.1       | % |                                              |   | 14.9       | %    |  |   | 13.0       | % |  |   | 15.2       | %
|Net interest margin (annualized)(3)                            |  |                                                | 10.3       | % |                                              |   | 14.0       | %    |  |   | 12.2       | % |  |   | 14.3       | %



|(1) | Averages are computed using month-end balances of finance receivables (net of unearned interest/fees, unearned
insurance commissions, and unearned discounts) during the period presented.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Averages are computed using month-end balances of interest bearing debt during the period presented.
|--- | ----------------------------------------------------------------------------------------------------

|(3) | Net interest margin represents net interest income (before provision for credit losses) divided by the average net
finance receivables.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------

Analysis of Allowance for Credit Losses

An allowance for credit losses is maintained to account for the probable losses inherent in the finance receivable portfolio. The
allowance is calculated based upon managements estimate of the expected collectability of loans outstanding based upon a variety of factors, including, without limitation, periodic analysis of the loan portfolio, historic loan loss experience,
borrowers ability to repay and collateral considerations. We maintain an allowance for credit losses at a level that we consider adequate to provide for probable losses based on historical ratios of charge-offs to average notes receivable.



23



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##### Table of Contents

The following table shows these ratios of charge offs to average notes receivable for the
categories of our finance receivables. The average net finance receivables are computed using monthly balances, net of unearned interest, unearned insurance commissions and unearned discounts. Charge offs are shown at gross amounts as presented in
the receivable roll-forward on page 22. Recoveries represent receipts from non-file insurance claims and cash recoveries.



|                                                            |  |                                                |            |   |                                              |   |            |      |  |   |            |   |  |   |            |  
|----------------------------------------------------------- |  | ---------------------------------------------- | ---------- | - | -------------------------------------------- | - | ---------- | ---- |  | - | ---------- | - |  | - | ---------- | -
|                                                            |  | As of, or for, the ThreeMonths
Ended March 25, |            |   | As of, or for, the SixMonths
Ended March 25, |  
|                                                            |  | 2009                                           |            |   | 2008                                         |   |            | 2009 |  |   | 2008       |  
|Direct Consumer Loans and Consumer Sales Finance Contracts: |  |                                                |            |   |                                              |   |            |      |  |   |            |   |  |   |            |  
|Average net finance receivables                             |  | $                                              | 46,508,744 |   |                                              | $ | 53,968,894 |      |  | $ | 48,608,630 |   |  | $ | 54,141,898 |  
|Charge offsdirect consumer                                 |  | $                                              | 2,157,637  |   |                                              | $ | 859,943    |      |  | $ | 4,269,547  |   |  | $ | 2,253,612  |  
|Charge offsconsumer sales finance                          |  |                                                | 848,631    |   |                                              |   | 248,883    |      |  |   | 2,077,711  |   |  |   | 487,841    |  
|Charge offsbankruptcy                                      |  |                                                | 331,240    |   |                                              |   | 119,370    |      |  |   | 633,569    |   |  |   | 298,710    |  
|                                                            |  |                                                |            |   |                                              |   |            |      |  |   |            |   |  |   |            |  
|Total gross charge offs                                     |  |                                                | 3,337,508  |   |                                              |   | 1,228,196  |      |  |   | 6,980,827  |   |  |   | 3,040,163  |  
|Recoveries (all direct consumer)                            |  |                                                | (995,953   | ) |                                              |   | (527,500   | )    |  |   | (2,518,438 | ) |  |   | (1,173,724 | )
|                                                            |  |                                                |            |   |                                              |   |            |      |  |   |            |   |  |   |            |  
|Charge offs, net                                            |  | $                                              | 2,341,555  |   |                                              | $ | 700,696    |      |  | $ | 4,462,389  |   |  | $ | 1,866,439  |  
|Percent of net charge offs to average receivables           |  |                                                | 5.0        | % |                                              |   | 1.3        | %    |  |   | 9.2        | % |  |   | 3.4        | %
|                                                            |  |                                                |            |  
|Motor Vehicle Installment Sales                             |  |                                                |            |   |                                              |   |            |      |  |   |            |   |  |   |            |  
|Contracts:                                                  |  |                                                |            |   |                                              |   |            |      |  |   |            |   |  |   |            |  
|Average outstanding finance receivables                     |  | $                                              | 25,176,725 |   |                                              | $ | 26,166,894 |      |  | $ | 25,188,331 |   |  | $ | 26,050,298 |  
|Charge offs, gross                                          |  | $                                              | 389,270    |   |                                              | $ | 310,416    |      |  | $ | 819,020    |   |  | $ | 615,100    |  
|Recoveries                                                  |  |                                                |           |   |                                              |   |           |      |  |   |           |   |  |   |           |  
|                                                            |  |                                                |            |   |                                              |   |            |      |  |   |            |   |  |   |            |  
|Charge offs, net                                            |  | $                                              | 389,270    |   |                                              | $ | 310,416    |      |  | $ | 819,020    |   |  | $ | 615,100    |  
|Percent of net charge offs to average receivables           |  |                                                | 1.5        | % |                                              |   | 1.2        | %    |  |   | 3.3        | % |  |   | 2.4        | %
|                                                            |  |                                                |            |  
|Total Receivables:                                          |  |                                                |            |   |                                              |   |            |      |  |   |            |   |  |   |            |  
|Average outstanding finance receivables                     |  | $                                              | 71,685,469 |   |                                              | $ | 80,135,788 |      |  | $ | 73,796,961 |   |  | $ | 80,192,196 |  
|Charge offs, gross                                          |  | $                                              | 3,726,778  |   |                                              | $ | 1,538,612  |      |  | $ | 7,799,847  |   |  | $ | 3,655,263  |  
|Recoveries (all direct consumer)                            |  |                                                | (995,953   | ) |                                              |   | (527,500   | )    |  |   | (2,518,438 | ) |  |   | (1,173,724 | )
|                                                            |  |                                                |            |   |                                              |   |            |      |  |   |            |   |  |   |            |  
|Charge offs, net                                            |  | $                                              | 2,730,825  |   |                                              | $ | 1,011,112  |      |  | $ | 5,281,409  |   |  | $ | 2,481,539  |  
|Percent of net charge offs to average receivables           |  |                                                | 3.8        | % |                                              |   | 1.3        | %    |  |   | 7.2        | % |  |   | 3.1        | %



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##### Table of Contents

During the fourth quarter of 2008, in conjunction with their initial Sarbanes-Oxley testing of controls
over the charge-off process of delinquent loans, management identified a material weakness in the internal controls over financial reporting. To remedy the material weakness, management implemented the following measures including, among other
things:



| |  |  | Enhanced accountability to personnel responsible for determining loan collectibility, and
| | - |  | -----------------------------------------------------------------------------------------



| |  |  | The development of a plan to utilize a more objective process or trigger for loan charge-offs that will generally result in charging off all loans greater than
180 days past due, with the exceptions documented as to the rationale for deferring charge-off.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

This remediation and the
continued adverse economic conditions has resulted in an increase in the net charge offs of $2.8 million for the six months and $1.7 million for the three months ended March 25, 2009 over the same periods of 2008. Management also has revised
its methodology in evaluating the sufficiency of the allowance to rely much more heavily on current data available. The allowance for credit losses was $7.8 million or 11.1% of the net outstanding finance receivables at March 25, 2009 and $8.9
million or 11.6% at September 25, 2008. The allowance for credit losses was increased by $5.2 million for the year ended September 25, 2008 to provide for the remediation and the adverse economic conditions discussed above.

Delinquency Information

Our delinquency levels reflect, among other factors, changes in the mix of loans in the portfolio, the quality of receivables, the success of collection efforts, bankruptcy trends and general economic conditions. The
delinquency information in the following tables is computed on the basis of the amount past due in accordance with the original payment terms of the loan (contractual method). We use the contractual method for all external reporting purposes.
Management closely monitors delinquency using this method to measure the quality of our loan portfolio and the probability of credit loss. We also use other tools, such as a recency report, which shows the date of the last full contractual payment
received on the loan, to determine a particular customers willingness to pay. For example, if a delinquent customer has made a recent payment, we may decide to delay more serious collection measures, such as repossession of collateral.
However, such a payment will not change the non-accrual status of the account until all of the principal and interest amounts contractually due are brought current (we receive one or more full contractual payments and the account is less than 60
days contractually delinquent), at which time we believe future payments are reasonably assured. Below is certain information relating to the delinquency status of each category of our receivables for the quarters ended March 25, 2009 and 2008:



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##### Table of Contents

|                                                  |  |                      |            |   |                                |   |            |                                        |  |   |                    |   |  |       |           |   |  |   |            |  
|------------------------------------------------- |  | -------------------- | ---------- | - | ------------------------------ | - | ---------- | -------------------------------------- |  | - | ------------------ | - |  | ----- | --------- | - |  | - | ---------- | -
|                                                  |  | As of March 25, 2009 |           
|                                                  |  | DirectConsumerSales  |            |   | ConsumerSales FinanceContracts |   |            | Motor VehicleInstallmentSalesContracts |  |   | BankruptcyAccounts |   |  | Total |          
|Gross Loans and Contracts Receivables             |  | $                    | 27,566,820 |   |                                | $ | 16,167,366 |                                        |  | $ | 30,329,656         |   |  | $     | 7,136,344 |   |  | $ | 81,200,186 |  
|Loans and Contracts 60 - 90 days past due         |  | $                    | 588,454    |   |                                | $ | 251,250    |                                        |  | $ | 361,841            |   |  | $     | 240,863   |   |  | $ | 1,442,408  |  
|Percentage of Outstanding                         |  |                      | 2.1        | % |                                |   | 1.6        | %                                      |  |   | 1.2                | % |  |       | 3.4       | % |  |   | 1.8        | %
|Loans and Contracts greater than 90 days past due |  | $                    | 6,500,586  |   |                                | $ | 2,969,660  |                                        |  | $ | 677,252            |   |  | $     | 4,662,038 |   |  | $ | 14,809,536 |  
|Percentage of Outstanding                         |  |                      | 23.6       | % |                                |   | 18.4       | %                                      |  |   | 2.2                | % |  |       | 65.3      | % |  |   | 18.2       | %
|Loans and Contracts greater than 60 days past due |  | $                    | 7,089,040  |   |                                | $ | 3,220,910  |                                        |  | $ | 1,039,093          |   |  | $     | 4,902,901 |   |  | $ | 16,251,944 |  
|Percentage of Outstanding                         |  |                      | 25.7       | % |                                |   | 19.9       | %                                      |  |   | 3.4                | % |  |       | 68.7      | % |  |   | 20.0       | %
|                                                  | 
|                                                  |  | As of March 25, 2008 |           
|                                                  |  | DirectConsumerSales  |            |   | ConsumerSales FinanceContracts |   |            | Motor VehicleInstallmentSalesContracts |  |   | BankruptcyAccounts |   |  | Total |          
|Gross Loans and Contracts Receivables             |  | $                    | 37,901,014 |   |                                | $ | 16,813,744 |                                        |  | $ | 32,220,882         |   |  | $     | 6,511,657 |   |  | $ | 93,447,297 |  
|Loans and Contracts 60 - 90 days past due         |  | $                    | 631,544    |   |                                | $ | 258,309    |                                        |  | $ | 29,753             |   |  | $     | 170,864   |   |  | $ | 1,090,470  |  
|Percentage of Outstanding                         |  |                      | 1.7        | % |                                |   | 1.5        | %                                      |  |   | 0.1                | % |  |       | 2.6       | % |  |   | 1.2        | %
|Loans and Contracts greater than 90 days past due |  | $                    | 10,979,004 |   |                                | $ | 3,474,018  |                                        |  | $ | 111,930            |   |  | $     | 3,856,930 |   |  | $ | 18,421,882 |  
|Percentage of Outstanding                         |  |                      | 29.0       | % |                                |   | 20.7       | %                                      |  |   | 0.3                | % |  |       | 59.2      | % |  |   | 19.7       | %
|Loans and Contracts greater than 60 days past due |  | $                    | 11,610,548 |   |                                | $ | 3,732,327  |                                        |  | $ | 141,683            |   |  | $     | 4,027,794 |   |  | $ | 19,512,352 |  
|Percentage of Outstanding                         |  |                      | 30.6       | % |                                |   | 22.2       | %                                      |  |   | 0.4                | % |  |       | 61.9      | % |  |   | 20.9       | %

Results of Operations

Comparison of Six Months Ended March 25, 2009 and 2008

Net Revenues

Net revenues were $10.1 million and $11.1 million for the six months ended March 25, 2009 and 2008,
respectively. Decreases in interest and fee income and other ancillary product income were down from the prior year as a result of a significant decrease in finance receivable originations. Due to the current economic environment and the
termination, until April 10, 2009, of the registration of the Companys debentures and demand notes the Company implemented tighter risk management controls in the six months ended March 25, 2009 to preserve cash, resulting in a
decrease in finance receivable originations.



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##### Table of Contents

Retail sales and the associated gross margin on these sales were also down from prior year levels. Decreases in interest expense and the provision for credit
losses partially offset the income and commission decreases.

Net Interest and Fee Income Before Provision for Credit Losses

Net interest income before provision for credit losses was $4.5 million and $5.7 million for six months ended
March 25, 2009 and 2008, respectively. Gross interest and fee income decreased $1.5 million to $8.3 million from $9.8 million. This was a result of an approximate 19% decrease in finance receivables originated compared to the same period last
year. Interest expense was $3.8 million and $4.1 million for the six-month periods ended March 25, 2009 and 2008, respectively, due primarily to decreased amounts of variable rate subordinated debentures outstanding.

Provision for Credit Losses

Provision for credit losses was $4.1 million and $5.3 million for six months ended March 25, 2009 and 2008, respectively. While net finance receivables charged off were approximately $2.8 million higher than the
previous year, we increased the allowance for credit losses at March 25, 2008 by $2.8 million to provide for charge-offs expected due to worsening economic conditions that affect our customers ability to repay their loans. The allowance
for credit losses was 11.1% of finance receivables at March 25, 2009 compared to 8.2% at March 25, 2008.

Insurance and Other Products

Income from commissions on insurance products and motor club
memberships decreased $0.3 million, to $5.6 million from $5.9 million for the six months ended March 25, 2009 and 2008, respectively. The decrease in volume of finance receivables originated during this six-month period compared to last year
resulted in lower commissions earned on the sale of these products. Other income, including delinquency fees was approximately same as last year.

Gross Margin on Retail Sales

Gross margins on retail sales were $2.9 million
and $3.6 million for six months ended March 25, 2009 and 2008, respectively. Margins in the consumer segment in the first half of this year were down $0.3 million over the same period last year while margins in the automotive segment were down
$0.4 million. Sales in the consumer segment were approximately $0.5 million lower than last year while vehicle sales were down approximately $0.7 million. These decreases are consistent with the current retail industry as economic conditions are
having a negative impact on consumer spending.

Operating Expenses

Operating expenses were $14.9 million and $13.9 million for six months ended March 25, 2009 and 2008, respectively. Personnel expense
were approximately $0.2 million higher than the previous year due primarily to increases in health insurance expenses. Facilities expense was slightly higher than last year by $0.1 million due to scheduled increases in rent. Other operating expenses
were up $0.7 million (approximately 28%) due primarily to higher legal expenses resulting from the defending and settlement of two lawsuits.

Comparison of Three Months Ended March 25, 2009 and 2008

Net
Revenues

Net revenues were $4.5 million and $4.6 million for the three months ended March 25, 2009 and 2008,
respectively. Decreases in interest and fee income and other ancillary product income were down from the prior year as a result of a significant decrease in finance receivable originations. Retail sales and the associated gross margin on these sales
were also down from prior year levels. Decreases in interest expense and the provision for credit losses partially offset the income and commission decreases.



27



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##### Table of Contents

Net Interest and Fee Income Before Provision for Credit Losses

Net interest and fee income before provision for credit losses was $1.8 million and $2.8 million for three months ended March 25,
2009 and 2008, respectively. During the second quarter of fiscal year 2009, gross interest and fee income decreased $1.1 million compared to the second quarter of 2008 due to a decrease of finance receivable originations of approximately 22% to the
same period last year. Interest expense was $1.9 million and $2.0 million for the three month periods ended March 25, 2009 and 2008, respectively.

Provision for Credit Losses

Provision for credit losses was $1.9 million and
$3.2 million for three months ended March 25, 2009 and 2008, respectively. While net finance receivables charged off were approximately $1.7 million higher than the previous year, we increased the allowance for credit losses at March 25,
2008 by $2.3 million to provide for charge-offs expected due to worsening economic conditions that affect our customers ability to repay their loans.

Insurance and Other Products

Income from commissions on
insurance products and motor club memberships were $2.5 million and $2.8 million for the three months ended March 25, 2009 and 2008, respectively. The decrease in volume of finance receivables originated during this three-month period compared
to last year resulted in lower commissions earned on the sale of these products. Other income, including delinquency fees was approximately same as last year.

Gross Margin on Retail Sales

Gross margins on retail
sales were $1.3 million and $1.6 million for three months ended March 25, 2009 and 2008, respectively. Sales in the automotive segment for the three-month period in 2009 were down to the same period last year by $0.5 million while margins
decrease $0.3 million. Sales and margins in the consumer segment were down by $0.1 million in the three months this year compared to last year.

Operating Expenses

Operating expenses were $7.7 million and $7.0 million for
three months ended March 25, 2009 and 2008, respectively. Personnel expenses were approximately $0.1 million higher during the second quarter of fiscal year 2009 versus 2008 due to higher health insurance expenses. Facilities expense was
slightly higher than last year by $0.1 million due to scheduled increases in rent. Other operating expenses were up by $0.5 million (approximately 41%) due primarily to higher legal expenses resulting from the defending and settlement of two
lawsuits.



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##### Table of Contents

Liquidity and Capital Resources

General

Liquidity is our ability to meet short-term
financial obligations whether through collection of receivables, potential registration to sale Debentures and Demand Notes or similar debt instruments or by generating additional funds through sales of assets to our competitors (such as our finance
receivables or vehicle inventory). Continued liquidity is, therefore, largely dependent on the collection of our receivables and the potential future sale of debt securities that meet the investment requirements of the public. We believe the cash
flow from our operations coupled with potential sales of the Debentures and Demand Notes or similar debt instruments will be sufficient to cover our liquidity needs and cash flow requirements during 2009.

Liquidity management refers to our ability to generate sufficient cash to fund the following primary uses of cash:



| |  |  | meet all of our debenture and demand note redemption obligations;
| | - |  | -----------------------------------------------------------------



| |  |  | pay interest on all of our debentures and demand notes;
| | - |  | -------------------------------------------------------



| |  |  | pay operating expenses; and
| | - |  | ---------------------------



| |  |  | fund consumer finance loan demand and used automobile vehicle inventory.
| | - |  | ------------------------------------------------------------------------

The primary objective for liquidity management is to ensure that at all times we can meet the redemption obligations of our note holders. A secondary purpose of liquidity management is profit
management. Because profit and liquidity are often conflicting objectives, we attempt to maximize our net interest margin by making adequate, but not excessive, liquidity provisions. To the extent we have adequate cash to meet our redemption
obligations and pay interest to our note holders, we will use remaining cash to make consumer finance loans, purchase used automobile vehicle inventory and invest in other sources of potential revenues.

Changes in our liquidity position result from operating, investing and financing activities. Cash flows from operating activities are
generally the cash effects of transactions and other events that enter into the determination of our net income, including, without limitation, purchases of used automobiles, electronics, furnishings and other consumer goods for resale to our
customers. The primary investing activities include consumer loan originations and purchases and collections on such consumer loans. Our financing activities focus almost entirely on the sale of Debentures and Demand Notes.

Cash and cash equivalents decreased to $3.2 million at March 25, 2009 from $17.7 million at March 25, 2008. Cash and cash
equivalents decreased $9.4 million during the six months ended March 25, 2009 primarily as a result of a $9.6 million of net cash used in financing activities. We redeemed an unusually high amount of debentures ($10.5 million) while the
proceeds from the sale of debentures were $1.6 million. We also redeemed $0.8 million more in demand notes than were sold. Cash and cash equivalents decreased $0.1 million during the six months ended March 25, 2008. During the first half of
fiscal 2008, the primary sources of cash were net cash provided by operating activities of $4.0 million. Net cash used in financing activities was $1.1 million. Although we issued $7.6 million in debentures, we redeemed $6.8 million of debentures
and had a net decrease in demand notes of $1.8 million.

During 2009, we expect to continue to use a significant amount of
cash to fund redemption obligations and pay interest on our securities.



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##### Table of Contents

Debentures and Demand Notes

During the six months ended March 25, 2009, we (1) received gross proceeds of $1.6 million from the sales of debentures, and
(2) paid $10.5 million for redemption of debentures and $0.8 million for net redemptions of demand notes for us and our subsidiary, The Money Tree of Georgia, Inc. We did not offer or sell any debentures and demand notes between
November 18, 2008 (the date of termination of the prior registration statements) and April 10, 2009 (the effective date of the new registration statements). As of March 25, 2009, we and this subsidiary had $73.3 million of debentures
and $2.9 million of demand notes outstanding compared to $82.2 million of debentures and $3.7 million of demand notes outstanding, as of September 25, 2008.

Subsequent Events

The Money Tree Inc. has registered with the Securities and
Exchange Commission on Form S-1 Registration Statements (1) $75,000,000 of Series B Variable Rate Subordinated Debentures (Commission File No. 333-157700) and (2) $35,000,000 of Subordinated Demand Notes (Commission File
No. 333-157701). These Registration Statements were declared effective on April 10, 2009. These securities have also been registered with the State of Georgia.

Between April 10, 2009 and April 25, 2009, we had sold $1.3 million of debentures and $0.3 million in demand notes. For the period March 26, 2009 to April 25, 2009 we redeemed
$1.6 million debentures and we had redeemed $0.3 million demand notes. These include amounts that were redeemed through our subsidiary, The Money Tree of Georgia, Inc.

Recent Accounting Pronouncements

Recent accounting pronouncements have been
issued that may have a future effect on operations. Refer to Note 3 to the unaudited consolidated financial statements for a discussion of these pronouncements and their possible effects.

Critical Accounting Policies

Our accounting and reporting policies conform with U.S. generally accepted accounting principles (GAAP) and predominant practice within the financial services industry. The preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. Actual results could differ from those estimates.

We believe that the determination of our allowance for credit losses involves a higher degree of judgment and complexity than our other
significant accounting policies. The Allowance for Credit Losses is calculated with the objective of maintaining a reserve level believed by management to be sufficient to absorb estimated credit losses. Managements determination of the
adequacy of the allowance is based on periodic evaluations of the loan portfolio and other relevant factors. However, this evaluation is inherently subjective as it requires material estimates, including, among others, expected default
probabilities, loss given default, the amounts and timing of expected future cash flows on impaired loans, and general amounts for historical loss experience. We also consider economic conditions, uncertainties in estimating losses and inherent
risks in the loan portfolio. All of these factors may be susceptible to significant change. To the extent actual outcomes differ from managements estimates, additional provisions for credit losses may be required that would adversely impact
earnings in future periods.



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Finance receivables are considered impaired (i.e. income recognition ceases) as a result
of past-due status or a judgment by management that, although payments are current, such action is prudent. Finance receivables on which payments are past due 90 days or more are considered impaired unless they are well-secured and in the process of
collection or renewal. Any losses incurred from finance receivables that are impaired are charged off at 180 days past due. Related accrued interest and fees are reversed against current period income.

When a loan is impaired, interest accrued but uncollected is generally reversed against interest income. Cash receipts on impaired loans
are generally applied to reduce the unpaid principal balance.

We recognize deferred tax assets and liabilities for the
future tax effects of temporary differences, net operating loss carry-forwards and tax credits. Deferred tax assets are subject to managements judgment based upon available evidence that future realization is more likely than not. If
management determines that we may be unable to realize all or part of net deferred tax assets in the future, a direct charge to income tax expense may be required to reduce the recorded value of the net deferred tax asset to the expected realizable
amount.

We have not substantially changed any aspect of our overall approach in the application of the foregoing policies.
There have been no material changes in assumptions or estimation techniques utilized as compared to previous years.

Impact of Inflation and General
Economic Conditions

Although inflation has not had a material adverse effect on our financial condition or results
of operations, increases in the inflation rate are generally associated with increased interest rates. A significant and sustained increase in the interest rates would likely unfavorably impact our profitability by reducing the interest rate spread
between the rate of interest we receive on our customer loans and interest rates we pay to our note holders, banks and finance companies. Inflation may also negatively affect our operating expenses.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Our profitability and financial performance are sensitive to changes in the U.S. Treasury yields and the spread between the effective
rate of interest we receive on customer loans and the interest rates we pay on our borrowings. Our finance income is generally not sensitive to fluctuations in market interest rates. The primary exposure that we face is changes in interest rates on
our borrowings. A substantial and sustained increase in market interest rates would likely adversely affect our growth and profitability since we will be required to increase the interest rates we pay to holders of debentures at the end of each
interest adjustment period. We would also face pressure to increase interest rates on our demand notes to stay competitive. The overall objective of our interest rate risk management strategy is to mitigate the effects of changing interest rates on
our interest expense through the utilization of short-term variable rate debt and medium and long term fixed rate debt. We have not entered into any derivative instruments to manage our interest rate risk. Please see Note 7 in the notes to our
unaudited consolidated financial statements for information on our debt, including maturities and interest rates.

Item 4.
Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) that are designed to ensure that information
required to be disclosed in the Companys reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and that such
information is accumulated and communicated to the Companys management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures.

In connection with the presentation of the Form 10-Q, management, under the supervision and with the participation of our principal
executive officer and principal financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the



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fiscal quarter which is the subject of this Quarterly Report. Based on this evaluation, our principal executive officer and principal financial officer have
concluded that the design and operation of our disclosure controls and procedures are effective as of March 25, 2009.

Changes in Internal Control
Over Financial Reporting

There have been no changes in our internal control over financial reporting during the quarter
ended March 25, 2009, that have materially affected, or are reasonably likely to materially affect, the Companys internal control over financial reporting.



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PART II  OTHER INFORMATION

Item 1. Legal Proceedings

We were not involved in any
material legal proceedings during the quarter ended March 25, 2009 requiring disclosure under item 103 of Regulation S-K.

Item 1A. Risk Factors

In addition to the other information set forth in this
report, you should carefully consider the factors discussed in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended September 25, 2008, which could materially affect our business, financial condition or
future results. The risks described in our Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely
affect our business, financial condition and/or operating results.

Item 2. Unregistered Sales of Equity Securities and
Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Submission of Matters to a Vote of Security Holders.

None.

Item 5. Other Information

None.

Item 6. Exhibits



|     |  |                                                                                                                                
|---- |  | -------------------------------------------------------------------------------------------------------------------------------
|31.1 |  | Certification of Principal Executive Officers pursuant to Section 302 of The Sarbanes-Oxley Act of 2002                        
|     | 
|31.2 |  | Certification of Principal Financial Officer pursuant to Section 302 of The Sarbanes-Oxley Act of 2002                         
|     | 
|32.1 |  | Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002



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SIGNATURES

Pursuant to the requirements of the Securities Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



|             |  |  |  |                                                      
|------------ |  |  |  | -----------------------------------------------------
|             |  |  |  | THE MONEY TREE INC.                                  
|             |  | 
|May 11, 2009 |  |  |  | /s/ Bradley D. Bellville                             
|Date         |  |  |  | Bradley D. Bellville                                 
|             |  |  |  | President (Principal Executive Officer)              
|             |  | 
|May 11, 2009 |  |  |  | /s/ Steven P. Morrison                               
|Date         |  |  |  | Steven P. Morrison                                   
|             |  |  |  | Chief Financial Officer (Principal Financial Officer)



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