UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 WASHINGTON,
D.C. 20549
 
 Form
10-K
 
 (Mark
One)
 x
                    ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES
      EXCHANGE ACT OF 1934
  For the
fiscal year ended March 31, 2010
 OR
   ̈
                    TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OFTHE
      SECURITIES EXCHANGE ACT OF 1934
 
 For the
transition period from _______________ to _____________
 
 Commission
file number 0-19599
 
 WORLD
ACCEPTANCE
 CORPORATION
 (Exact
name of registrant as specified in its charter)
 
 South Carolina
                    
                    570425114(State or other jurisdiction of incorporation or organization)
                    
                    (I.R.S.
      Employer Identification No.)108
      Frederick StreetGreenville, South Carolina
                    
                    29607(Address
      of principal executive offices)
                    
                    (Zip
      Code)
  (864)
      298-9800(Registrant's
      telephone number, including area
code)
 SECURITIES
REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
 
 Title of Each Class
                    
                    Name of Each Exchange on Which
      RegisteredCommon
      Stock, no par value
                    
                    The
      NASDAQ Stock Market LLC(NASDAQ
      Global Select
Market)
 
 SECURITIES
REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE
 
 Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act. Yes  ̈No x
 
 Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Exchange Act.   Yes  ̈No x
 
 Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or
Section 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. Yesx
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 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 if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.   ̈
 
 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 the definitions 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 xNon-accelerated filer ̈
                  Smaller reporting company ̈(Do
      not check if smaller reporting
company)
 
 Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).  Yes  ̈  No
x
 
 The
aggregate market value of voting stock held by non-affiliates of the registrant
as of September 30, 2009, computed by reference to the closing sale price on
such date, was $25.21.  (For purposes of calculating this amount only,
all directors and executive officers are treated as affiliates.  This
determination of affiliate status is not necessarily a conclusive determination
for other purposes.)  As of June 8, 2010, 15,765,054 shares of the
registrant’s Common Stock, no par value, were outstanding.
 
 DOCUMENTS
INCORPORATED BY REFERENCE
 Portions
of the Registrant's definitive Proxy Statement pertaining to the 2010 Annual
Meeting of Shareholders ("the Proxy Statement") and filed pursuant to Regulation
14A are incorporated herein by reference into Part III hereof.






WORLD
ACCEPTANCE CORPORATION


Form
10-K Report


Table of
Contents





Item No.
                        
                        PagePART
      I1.
                        Business
                        21A.
                        Risk
      Factors
                        121B.
                        Unresolved
      Staff Comments
                        172.
                        Properties
                        173.
                        Legal
      Proceedings
                        184.
                        Reserved
                        18PART
      II5.
                        Market
      for Registrant's Common Equity, Related Stockholder Matters and Issuer
      Purchases of Equity Securities
                        186.
                        Selected
      Financial Data
                        207.
                        Management's
      Discussion and Analysis of Financial Condition and Results of
      Operations
                        217A.
                        Quantitative
      and Qualitative Disclosures About Market Risk
                        318.
                        Financial
      Statements and Supplementary Data
                        329.
                        Changes
      in and Disagreements with Accountants on Accounting and Financial
      Disclosure
                        659A.
                        Controls
      and Procedures
                        659B.
                        Other
      Information
                        66PART
      III10.
                        Directors,
      Executive Officers and Corporate Governance
                        6711.
                        Executive
      Compensation
                        6712.
                        Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters
                        6713.
                        Certain
      Relationships and Related Transactions, and Director
      Independence
                        6714.
                        Principal
      Accountant Fees and Services
                        67PART
      IV15.
                        Exhibits
      and Financial Statement Schedules
                        67




1


Introduction





World
Acceptance Corporation, a South Carolina corporation, operates a small-loan
consumer finance business in eleven states and Mexico.  As used
herein, the "Company,” “we,” “our,” “us,” or similar formulations include World
Acceptance Corporation and each of its subsidiaries, except that when used with
reference to the Common Stock or other securities described herein and in
describing the positions held by management or agreements of the Company, it
includes only World Acceptance Corporation.  All references in this
report to "fiscal 2010" are to the Company's fiscal year ended March 31,
2010.





The
Company maintains an Internet website, “www.worldacceptance.com,”
where interested persons will be able to access free of charge, among other
information, the Company’s annual reports on Form 10-K, its quarterly reports on
Form 10-Q, and its current reports on Form 8-K, as well as amendments to these
filings, via a link to a third party website.  These documents are
available for access as soon as reasonably practicable after we electronically
file these documents with the Securities and Exchange Commission
(“SEC”).  The Company files these reports with the SEC via the SEC’s
EDGAR filing system, and such reports also may be accessed via the SEC’s EDGAR
database at www.sec.gov.  The
Company will also provide either electronic or paper copies free of charge upon
written request to P.O. Box 6429, Greenville, SC 29606-6429.





PART
I.





Item
1.   Description of Business





General.  The
Company is engaged in the small-loan consumer finance business, offering
short-term small loans, medium-term larger loans, related credit insurance and
ancillary products and services to individuals.  The Company generally
offers standardized installment loans of between $300 and $4,000 through 990
offices in South Carolina, Georgia, Texas, Oklahoma, Louisiana, Tennessee,
Illinois, Missouri, New Mexico, Kentucky, Alabama and Mexico as of March 31,
2010.  The Company generally serves individuals with limited access to
consumer credit from banks, savings and loans, other consumer finance businesses
and credit card lenders.  In the U.S. offices, the Company also offers
income tax return preparation services and access to refund anticipation loans
through a third party bank to its customers and others.





Small-loan
consumer finance companies operate in a highly structured regulatory
environment.  Consumer loan offices are individually licensed under
state laws, which, in many states, establish allowable interest rates, fees and
other charges on small loans made to consumers and maximum principal amounts and
maturities of these loans.  The Company believes that virtually all
participants in the small-loan consumer finance industry charge the maximum
rates permitted under applicable state laws in those states with interest rate
limitations.





The
small-loan consumer finance industry is a highly fragmented segment of the
consumer lending industry.  Small-loan consumer finance companies
generally make loans to individuals of up to $1,000 with maturities of one year
or less.  These companies approve loans on the basis of the personal
creditworthiness of their customers and maintain close contact with borrowers to
encourage the repayment or refinancing of loans.  By contrast,
commercial banks, savings and loans and other consumer finance businesses
typically make loans of more than $5,000 with maturities of more than one
year.  Those financial institutions generally approve consumer loans
on the security of qualifying personal property pledged as collateral or impose
more stringent credit requirements than those of small-loan consumer finance
companies.  As a result of their higher credit standards and specific
collateral requirements, commercial banks, savings and loans and other consumer
finance businesses typically charge lower interest rates and fees and experience
lower delinquency and charge-off rates than do small-loan consumer finance
companies.  Small-loan consumer finance companies generally charge
higher interest rates and fees to compensate for the greater credit risk of
delinquencies and charge-offs and increased loan administration and collection
costs.





Expansion.  During
fiscal 2010, the Company opened 48 new offices.  One office was
purchased and three offices were merged into existing offices due to their
inability to grow to profitable levels.  In fiscal 2011, the Company
plans to open or acquire at least 55 new offices in the United States by
increasing the number of offices in its existing market areas or commencing
operations in new states where it believes demographic profiles and state
regulations are attractive.  In addition, the Company plans to open
approximately 15 new offices in Mexico in fiscal 2011.  The Company's
ability to continue existing operations and expand its operations in existing or
new states is dependent upon, among other things, laws and regulations that
permit the Company to operate its business profitably and its ability to obtain
necessary regulatory approvals and licenses; however, there can be no assurance
that such laws and regulations will not change in ways that adversely affect the
Company or that the Company will be able to obtain any such approvals or
consents.  See Part 1, Item 1A, “Risk Factors” for a further
discussion of risks to our business and plans for expansion.




2


The
Company's expansion is also dependent upon its ability to identify attractive
locations for new offices and to hire suitable personnel to staff, manage and
supervise new offices.  In evaluating a particular community, the
Company examines several factors, including the demographic profile of the
community, the existence of an established small-loan consumer finance market
and the availability of suitable personnel to staff, manage and supervise the
new offices.  The Company generally locates new offices in communities
already served by at least one other small-loan consumer finance
company.





The
small-loan consumer finance industry is highly fragmented in the eleven states
in which the Company currently operates.  The Company believes that
its competitors in these markets are principally independent operators with
generally less than 100 offices.  The Company also believes that
attractive opportunities to acquire offices from competitors in its existing
markets and to acquire offices in communities not currently served by the
Company will become available as conditions in the local economies and the
financial circumstances of the owners change.





The
following table sets forth the number of offices of the Company at the dates
indicated:





At March 31,State
                
                2001
                
                
                2002
                
                
                2003
                
                
                2004
                
                
                2005
                
                
                2006
                
                
                2007
                
                
                2008
                
                
                2009
                
                
                2010South
      Carolina
                
                
                62
                
                
                
                62
                
                
                
                65
                
                
                
                65
                
                
                
                65
                
                
                
                68
                
                
                
                89
                
                
                
                92
                
                
                
                93
                
                
                
                95Georgia
                
                
                48
                
                
                
                52
                
                
                
                52
                
                
                
                74
                
                
                
                76
                
                
                
                74
                
                
                
                96
                
                
                
                97
                
                
                
                100
                
                
                
                101Texas
                
                
                135
                
                
                
                136
                
                
                
                142
                
                
                
                150
                
                
                
                164
                
                
                
                168
                
                
                
                183
                
                
                
                204
                
                
                
                223
                
                
                
                229Oklahoma
                
                
                43
                
                
                
                46
                
                
                
                45
                
                
                
                47
                
                
                
                51
                
                
                
                58
                
                
                
                62
                
                
                
                70
                
                
                
                80
                
                
                
                82Louisiana
                
                
                20
                
                
                
                20
                
                
                
                20
                
                
                
                20
                
                
                
                20
                
                
                
                24
                
                
                
                28
                
                
                
                34
                
                
                
                38
                
                
                
                38Tennessee
                
                
                38
                
                
                
                40
                
                
                
                45
                
                
                
                51
                
                
                
                55
                
                
                
                61
                
                
                
                72
                
                
                
                80
                
                
                
                92
                
                
                
                95Illinois
                
                
                30
                
                
                
                29
                
                
                
                28
                
                
                
                30
                
                
                
                33
                
                
                
                37
                
                
                
                40
                
                
                
                58
                
                
                
                61
                
                
                
                64Missouri
                
                
                22
                
                
                
                22
                
                
                
                22
                
                
                
                26
                
                
                
                36
                
                
                
                38
                
                
                
                44
                
                
                
                49
                
                
                
                57
                
                
                
                62New
      Mexico
                
                
                12
                
                
                
                12
                
                
                
                16
                
                
                
                19
                
                
                
                20
                
                
                
                22
                
                
                
                27
                
                
                
                32
                
                
                
                37
                
                
                
                39Kentucky
                
                
                10
                
                
                
                22
                
                
                
                30
                
                
                
                30
                
                
                
                36
                
                
                
                41
                
                
                
                45
                
                
                
                52
                
                
                
                58
                
                
                
                61Alabama
      (1)
                
                
                -
                
                
                
                -
                
                
                
                5
                
                
                
                14
                
                
                
                21
                
                
                
                26
                
                
                
                31
                
                
                
                35
                
                
                
                42
                
                
                
                44Colorado
      (2)
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                2
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -Mexico
      (3)
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                3
                
                
                
                15
                
                
                
                35
                
                
                
                63
                
                
                
                80Total
                
                
                420
                
                
                
                441
                
                
                
                470
                
                
                
                526
                
                
                
                579
                
                
                
                620
                
                
                
                732
                
                
                
                838
                
                
                
                944
                
                
                
                990





(1)
            The
      Company commenced operations in Alabama in January
  2003.


(2)
            The
      Company commenced operations in Colorado in August 2004 and ceased
      operations in April 2005.


(3)
            The
      Company commenced operations in Mexico in September
  2005.





Loan and Other
Products.  In each state in which it operates and in Mexico,
the Company offers consumer installment loans that are standardized by amount
and maturity in an effort to reduce documentation and related processing
costs.  The Company's loans are consumer installment loans that are
payable in fully amortizing monthly installments with terms generally of 4 to 36
months, and all loans are prepayable at any time without penalty.  In
fiscal 2010, the Company's average originated gross loan size and term were
approximately $1,067 and 11 months, respectively.  Several state laws
regulate lending terms, including the maximum loan amounts and interest rates
and the types and maximum amounts of fees, insurance premiums and other costs
that may be charged.  As of March 31, 2010, the annual percentage
rates on loans offered by the Company, which include interest, fees and other
charges as calculated for the purposes of the requirements of the federal Truth
in Lending Act, ranged from 25% to 204% depending on the loan size, maturity and
the state in which the loan is made.  In addition, in certain states,
the Company sells credit insurance in connection with its loans as agent for an
unaffiliated insurance company, which may increase its returns on loans
originated in those states.





Specific
allowable charges vary by state and, consistent with industry practice, the
Company generally charges at or close to the maximum rates allowable under
applicable state law in those states that limit loan rates.  Statutes
in Texas and Oklahoma allow for indexing the maximum loan amounts to the
Consumer Price Index.  The Company’s loan products are pre-computed
loans in which the finance charge is a combination of origination or acquisition
fees, account maintenance fees, monthly account handling fee and other charges
permitted by the relevant state laws.




3


As of
March 31, 2010, annual percentage rates applicable to our gross loans
receivable, as defined by the Truth in Lending Act were as follows:





Low
                    
                    High
                    
                    
                    US
                    
                    
                    Mexico
                    
                    
                    Total0
                    %
                    
                    36
                    %
                    
                    $
                    180,360,272
                    
                    
                    $
                    -
                    
                    
                    $
                    180,360,272
                    
                    
                    
                    23.42
                    %36
                    %
                    
                    50
                    %
                    
                    
                    168,091,098
                    
                    
                    
                    -
                    
                    
                    
                    168,091,098
                    
                    
                    
                    21.82
                    %51
                    %
                    
                    80
                    %
                    
                    
                    154,799,458
                    
                    
                    
                    -
                    
                    
                    
                    154,799,458
                    
                    
                    
                    20.10
                    %81
                    %
                    
                    99
                    %
                    
                    
                    194,585,463
                    
                    
                    
                    187,625
                    
                    
                    
                    194,773,088
                    
                    
                    
                    25.29
                    %99
                    %
                    
                    149
                    %
                    
                    
                    30,471,982
                    
                    
                    
                    32,936,005
                    
                    
                    
                    63,407,987
                    
                    
                    
                    8.23
                    %149
                    %
                    
                    204
                    %
                    
                    
                    8,819,929
                    
                    
                    
                    13,375
                    
                    
                    
                    8,833,304
                    
                    
                    
                    1.15
                    %$
                    737,128,202
                    
                    
                    $
                    33,137,005
                    
                    
                    $
                    770,265,207





The
Company, as an agent for an unaffiliated insurance company, markets and sells
credit life, credit accident and health, credit property, and unemployment
insurance in connection with its loans in selected states where the sale of such
insurance is permitted by law.  Credit life insurance provides for the
payment in full of the borrower's credit obligation to the lender in the event
of death.  Credit accident and health insurance provides for repayment
of loan installments to the lender that come due during the insured's period of
income interruption resulting from disability from illness or
injury.  Credit property insurance insures payment of the borrower's
credit obligation to the lender in the event that the personal property pledged
as security by the borrower is damaged or destroyed by a covered
event.  Unemployment insurance provides for repayment of loan
installments to the lender that come due during the insured’s period of
involuntary unemployment.  The Company requires each customer to
obtain certain specific credit insurance in the amount of the loan for all loans
originated in Georgia, and encourages customers to obtain credit insurance for
loans originated in South Carolina, Louisiana, Alabama and Kentucky and on a
limited basis in Tennessee, Oklahoma, and New Mexico.  Customers in
those states typically obtain such credit insurance through the
Company.  Charges for such credit insurance are made at maximum
authorized rates and are stated separately in the Company's disclosure to
customers, as required by the Truth-in-Lending Act and by various applicable
state laws.  In South Carolina, Georgia, Louisiana, Kentucky and
Alabama, the Company also charges non-file premiums in connection with certain
loans in lieu of recording and perfecting the Company’s security interest in the
asset pledged.  The premiums are remitted to a third party insurance
company for non-file insurance coverage. In the sale of insurance policies, the
Company, as agent, writes policies only within limitations established by its
agency contracts with the insurer.  The Company does not sell credit
insurance to non-borrowers.





The
Company also markets automobile club memberships to its borrowers in Georgia,
Tennessee, New Mexico, Alabama and Kentucky as an agent for an unaffiliated
automobile club.  Club memberships entitle members to automobile
breakdown and towing reimbursement and related services.  The Company
is paid a commission on each membership sold, but has no responsibility for
administering the club, paying benefits or providing services to club
members.  The Company does not market automobile club memberships to
non-borrowers.





In fiscal
1995 the Company implemented its World Class Buying Club and began marketing
certain electronic products and appliances to its Texas
borrowers.  Since implementation, the Company has expanded this
program to Georgia, Tennessee, New Mexico, Alabama and Missouri.  The
program is not offered in the other states where the Company operates, as it is
not permitted by the state regulations in those states.  Borrowers
participating in this program can purchase a product from a limited inventory of
items maintained in the branch offices, a catalog available at a branch office
or by direct mail and can finance the purchase with a retail installment sales
contract provided by the Company.  Other than the limited product
samples maintained in the branch offices, products sold through this program are
shipped directly by the suppliers to the Company's customers and, accordingly,
the Company is not required to maintain any inventory to support the
program.  The Company believes that maintaining a limited number of
items on hand in each of its participating offices has enhanced sales under this
program and plans to continue this practice in the future.




4


Another
service offered by the Company is income tax return preparation, electronic
filing and access to refund anticipation loans.  This program is
provided in all but a few of the Company’s offices.  The Company
prepared 62,000, 61,000 and 65,000 returns in each of the fiscal years 2010,
2009 and 2008, respectively.   Net revenue generated by the
Company from this program during fiscal 2010, 2009 and 2008 amounted to
approximately $10.9 million, $9.9 million and $9.7 million,
respectively.  The Company believes that this is a beneficial service
for its existing customer base, as well as non-loan customers, and it plans to
continue to promote and expand the program.





Loan Activity.  The
following table sets forth the composition of the Company's gross loans
receivable by state at March 31 of each year from 2001 through
2010:





At March 31,State
                
                2001
                
                
                2002
                
                
                2003
                
                
                2004
                
                
                2005
                
                
                2006
                
                
                2007
                
                
                2008
                
                
                2009
                
                
                2010South
      Carolina
                
                
                21
                %
                
                
                19
                %
                
                
                15
                %
                
                
                14
                %
                
                
                12
                %
                
                
                11
                %
                
                
                13
                %
                
                
                12
                %
                
                
                11
                %
                
                
                12
                %Georgia
                
                
                12
                
                
                
                12
                
                
                
                12
                
                
                
                13
                
                
                
                13
                
                
                
                13
                
                
                
                14
                
                
                
                15
                
                
                
                14
                
                
                
                14Texas
                
                
                25
                
                
                
                24
                
                
                
                23
                
                
                
                21
                
                
                
                20
                
                
                
                24
                
                
                
                23
                
                
                
                22
                
                
                
                21
                
                
                
                20Oklahoma
                
                
                6
                
                
                
                5
                
                
                
                5
                
                
                
                5
                
                
                
                5
                
                
                
                6
                
                
                
                5
                
                
                
                5
                
                
                
                6
                
                
                
                6Louisiana
                
                
                3
                
                
                
                3
                
                
                
                3
                
                
                
                3
                
                
                
                3
                
                
                
                3
                
                
                
                3
                
                
                
                3
                
                
                
                3
                
                
                
                2Tennessee
                
                
                11
                
                
                
                12
                
                
                
                14
                
                
                
                15
                
                
                
                18
                
                
                
                15
                
                
                
                15
                
                
                
                14
                
                
                
                14
                
                
                
                14Illinois
                
                
                5
                
                
                
                5
                
                
                
                5
                
                
                
                5
                
                
                
                5
                
                
                
                5
                
                
                
                6
                
                
                
                6
                
                
                
                6
                
                
                
                6Missouri
                
                
                4
                
                
                
                5
                
                
                
                5
                
                
                
                6
                
                
                
                6
                
                
                
                6
                
                
                
                5
                
                
                
                6
                
                
                
                6
                
                
                
                6New
      Mexico
                
                
                3
                
                
                
                3
                
                
                
                3
                
                
                
                3
                
                
                
                3
                
                
                
                3
                
                
                
                3
                
                
                
                3
                
                
                
                3
                
                
                
                3Kentucky
                
                
                10
                
                
                
                12
                
                
                
                13
                
                
                
                12
                
                
                
                12
                
                
                
                11
                
                
                
                9
                
                
                
                9
                
                
                
                9
                
                
                
                9Alabama
      (1)
                
                
                -
                
                
                
                -
                
                
                
                2
                
                
                
                3
                
                
                
                3
                
                
                
                3
                
                
                
                3
                
                
                
                3
                
                
                
                4
                
                
                
                4Mexico
      (2)
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                1
                
                
                
                2
                
                
                
                3
                
                
                
                4Total
                
                
                100
                %
                
                
                100
                %
                
                
                100
                %
                
                
                100
                %
                
                
                100
                %
                
                
                100
                %
                
                
                100
                %
                
                
                100
                %
                
                
                100
                %
                
                
                100
                %







(1)
            The
      Company commenced operations in Alabama in January
  2003.


(2)
            The
      Company commenced operations in Mexico in September
  2005.





The
following table sets forth the total number of loans, the average loan balance
and the gross loan balance by state at March 31, 2010:





Gross
      LoanTotal
      Number
                  
                  
                  Average
      Gross Loan
                  
                  
                  Balanceof Loans
                  
                  
                  Balance
                  
                  
                  (thousands)South
      Carolina
                  
                  
                  80,178
                  
                  
                  $
                  1,120
                  
                  
                  $
                  89,766Georgia
                  
                  
                  84,971
                  
                  
                  
                  1,269
                  
                  
                  
                  107,839Texas
                  
                  
                  201,047
                  
                  
                  
                  754
                  
                  
                  
                  151,595Oklahoma
                  
                  
                  50,886
                  
                  
                  
                  940
                  
                  
                  
                  47,840Louisiana
                  
                  
                  24,156
                  
                  
                  
                  743
                  
                  
                  
                  17,947Tennessee
                  
                  
                  91,714
                  
                  
                  
                  1,174
                  
                  
                  
                  107,684Illinois
                  
                  
                  40,672
                  
                  
                  
                  1,218
                  
                  
                  
                  49,548Missouri
                  
                  
                  37,768
                  
                  
                  
                  1,201
                  
                  
                  
                  45,367New
      Mexico
                  
                  
                  24,454
                  
                  
                  
                  775
                  
                  
                  
                  18,954Kentucky
                  
                  
                  47,561
                  
                  
                  
                  1,471
                  
                  
                  
                  69,944Alabama
                  
                  
                  32,584
                  
                  
                  
                  940
                  
                  
                  
                  30,644Mexico
                  
                  
                  77,225
                  
                  
                  
                  429
                  
                  
                  
                  33,137Total
                  
                  
                  793,216
                  
                  
                  $
                  971
                  
                  
                  $
                  770,265





For
fiscal 2010, 2009 and 2008, 95.9%, 96.9% and 98.2%, respectively, of the
Company’s revenues were attributable to U.S. customers and 4.1%, 3.1% and 1.8%,
respectively, were attributable to customers in Mexico.  For further
information regarding potential risks associated with the Company’s operations
in Mexico, see Part I, Item 1A, “Risk Factors - Our use of derivatives exposes
us to credit and market risk” and “- Our continued expansion into Mexico may
increase the risks inherent in conducting international operations, contribute
materially to increased costs and negatively affect our business, prospects,
results of operations and financial condition,” as well as Part II, Item 7,
“Management’s Discussion and Analysis of Financial Condition and Results of
Operations – Quantitative and Qualitative Disclosures about Market Risk –
Foreign Currency Exchange Rate Risk.”




5


Seasonality.  The
Company's highest loan demand occurs generally from October through December,
its third fiscal quarter.  Loan demand is generally lowest and loan
repayment highest from January to March, its fourth fiscal
quarter.  Consequently, the Company experiences significant seasonal
fluctuations in its operating results and cash needs.  Operating
results from the Company's third fiscal quarter are generally lower than in
other quarters and operating results for its fourth fiscal quarter are generally
higher than in other quarters.





Lending and Collection
Operations.  The Company seeks to provide short-term loans to
the segment of the population that has limited access to other sources of
credit.  In evaluating the creditworthiness of potential customers,
the Company primarily examines the individual's discretionary income, length of
current employment, duration of residence and prior credit
experience.  Loans are made to individuals on the basis of the
customer's discretionary income and other factors and are limited to amounts
that the customer can reasonably be expected to repay from that
income.  All of the Company's new customers are required to complete
standardized credit applications in person or by telephone at local Company
offices.  Each of the Company's local offices is equipped to perform
immediate background, employment and credit checks and approve loan applications
promptly, often while the customer waits. The Company's employees verify the
applicant's employment and credit histories through telephone checks with
employers, other employment references and a variety of credit
services.  Substantially all new customers are required to submit a
listing of personal property that will be pledged as collateral to secure the
loan, but the Company does not rely on the value of such collateral in the loan
approval process and generally does not perfect its security interest in that
collateral.  Accordingly, if the customer were to default in the
repayment of the loan, the Company may not be able to recover the outstanding
loan balance by resorting to the sale of collateral.  The Company
generally approves less than 50% of applications for loans to new
customers.





The
Company believes that the development and continual reinforcement of personal
relationships with customers improve the Company's ability to monitor their
creditworthiness, reduce credit risk and generate repeat loans.  It is
not unusual for the Company to have made a number of loans to the same customer
over the course of several years, many of which were refinanced with a new loan
after two or three payments.  In determining whether to refinance
existing loans, the Company typically requires loans to be current on a recency
basis, and repeat customers are generally required to complete a new credit
application if they have not completed one within the prior two
years.





In fiscal
2010, approximately 84.7% of the Company's loans were generated through
refinancings of outstanding loans and the origination of new loans to previous
customers.  A refinancing represents a new loan transaction with a
present customer in which a portion of the new loan proceeds is used to repay
the balance of an existing loan and the remaining portion is advanced to the
customer.  The Company actively markets the opportunity to refinance
existing loans prior to maturity, thereby increasing the amount borrowed and
increasing the fees and other income realized.  For fiscal 2010, 2009
and 2008, the percentages of the Company's loan originations that were
refinancings of existing loans were 76.4%, 75.0% and 73.3%,
respectively.





The
Company allows refinancing of delinquent loans on a case-by-case basis for those
customers who otherwise satisfy the Company's credit standards.  Each
such refinancing is carefully examined before approval in an effort to avoid
increasing credit risk.  A delinquent loan may generally be refinanced
only if the customer has made payments which, together with any credits of
insurance premiums or other charges to which the customer is entitled in
connection with the refinancing, reduce the balance due on the loan to an amount
equal to or less than the original cash advance made in connection with the
loan.  The Company does not allow the amount of the new loan to exceed
the original amount of the existing loan.  The Company believes that
refinancing delinquent loans for certain customers who have made periodic
payments allows the Company to increase its average loans outstanding and its
interest, fee and other income without experiencing a significant increase in
loan losses.  These refinancings also provide a resolution to
temporary financial setbacks for these borrowers and sustain their credit
rating.  While allowed on a selective basis, refinancings of
delinquent loans amounted to less than 2% of the Company’s loan volume in fiscal
2010.





To reduce
late payment risk, local office staff encourage customers to inform the Company
in advance of expected payment problems.  Local office staff also
promptly contact delinquent customers following any payment due date and
thereafter remain in close contact with such customers through phone calls,
letters or personal visits to the customer's residence or place of employment
until payment is received or some other resolution is reached.  When
representatives of the Company make personal visits to delinquent customers, the
Company's policy is to encourage the customers to return to the Company's office
to make payment.  Company employees are instructed not to accept
payment outside of the Company's offices except in unusual
circumstances.  In Georgia, Oklahoma, and Illinois, the Company is
permitted under state laws to garnish customers' wages for repayment of loans,
but the Company does not otherwise generally resort to litigation for collection
purposes, and rarely attempts to foreclose on collateral.




6


Insurance-related
Operations.  In Georgia, Louisiana, South Carolina, Kentucky,
and on a limited basis, Alabama, New Mexico, Oklahoma, and Tennessee, the
Company sells credit insurance to customers in connection with its loans as an
agent for an unaffiliated insurance company.  These insurance policies
provide for the payment of the outstanding balance of the Company's loan upon
the occurrence of an insured event.  The Company earns a commission on
the sale of such credit insurance, which is based in part on the claims
experience of the insurance company on policies sold on its behalf by the
Company.





The
Company has a wholly-owned, captive insurance subsidiary that reinsures a
portion of the credit insurance sold in connection with loans made by the
Company.  Certain coverages currently sold by the Company on behalf of
the unaffiliated insurance carrier are ceded by the carrier to the captive
insurance subsidiary, providing the Company with an additional source of income
derived from the earned reinsurance premiums.  In fiscal 2010, the
captive insurance subsidiary reinsured approximately 1.5% of the credit
insurance sold by the Company and contributed approximately $1.1 million to the
Company's total revenues.





The
Company typically does not perfect its security interest in collateral securing
its smaller loans by filing Uniform Commercial Code (“UCC”) financing
statements.  Statutes in Georgia, Louisiana, South Carolina,
Tennessee, Missouri, Kentucky and Alabama permit the Company to charge a
non-file or non-recording insurance premium in connection with certain loans
originated in these states.  These premiums are equal in aggregate
amount to the premiums paid by the Company to purchase non-file insurance
coverage from an unaffiliated insurance company.  Under its non-file
insurance coverage, the Company is reimbursed for losses on loans resulting from
its policy not to perfect its security interest in collateral pledged to secure
the loans.  The Company generally perfects its security interest in
collateral on larger loan transactions (typically greater than $1,000) by filing
UCC financing statements.





Information Technology.Paradata Financial Systems, a wholly owned subsidiary, is a financial
services software company headquartered near St. Louis, Missouri. Using the
proprietary data processing software package developed by Paradata, the Company
is able to fully automate all of its loan account processing and collection
reporting.  The system provides thorough management information and
control capabilities.  Paradata markets its financial services data
processing system to other financial services companies, but experiences
significant fluctuations from year to year in the amount of revenues generated
from sales of the system to third parties.  Such revenues are not
expected  to be material to the Company.





Monitoring and
Supervision.  The Company's loan operations are organized into
Southern, Central, and Western Divisions, and Mexico.  The Southern
Division consists of South Carolina, Georgia, Louisiana and Alabama; the Central
Division consists of Tennessee, Illinois, Missouri, and Kentucky; and the
Western Division consists of Texas, Oklahoma, and New Mexico.  Several
levels of management monitor and supervise the operations of each of the
Company's offices.  Branch managers are directly responsible for the
performance of their respective offices.  District supervisors are
responsible for the performance of 8 to 11 offices in their districts, typically
communicate with the branch managers of each of their offices at least weekly
and visit the offices at least monthly.  The Vice Presidents of
Operations monitor the performance of all offices within their states (or
partial state in the case of Texas), primarily through communication with
district supervisors.  These Vice Presidents of Operations typically
communicate with the district supervisors of each of their districts weekly and
visit each of their offices quarterly.





Senior
management receives daily delinquency, loan volume, charge-off, and other
statistical reports consolidated by state and has access to these daily reports
for each branch office.  At least six times per fiscal year, district
supervisors audit the operations of each office in their geographic area and
submit standardized reports detailing their findings to the Company's senior
management.  At least once per year, each office undergoes an audit by
the Company's internal auditors.  These audits include an examination
of cash balances and compliance with Company loan approval, review and
collection procedures and compliance with federal and state laws and
regulations.





Staff and
Training.  Local offices are generally staffed with three to
four employees.  The branch manager supervises operations of the
office and is responsible for approving all loan applications.  Each
office generally has one or two assistant managers who contact delinquent
customers, review loan applications and prepare operational
reports.  Each office also generally has a customer service
representative who takes loan applications, processes loan applications,
processes payments, assists in the preparation of operational reports, assists
in collection efforts, and assists in marketing activities.  Larger
offices may employ additional assistant managers and customer service
representatives.




7


New
employees are required to review a detailed training manual that outlines the
Company's operating policies and procedures.  The Company tests each
employee on the training manual during the first year of
employment.  In addition, each branch provides in-office training
sessions once every week and periodic training sessions outside the
office.  The Company has also implemented an enhanced training tool
known as World University which provides continuous, real-time, effective online
training to all locations.  This allows for more training
opportunities to be available to all employees throughout the course of their
career with the Company.





Advertising.  The
Company actively advertises through direct mail, targeting both its present and
former customers and potential customers who have used other sources of consumer
credit.  The Company obtains or acquires mailing lists from third
party sources.  In addition to the general promotion of its loans for
vacations, back-to-school needs and other uses, the Company advertises
extensively during the October through December holiday season and in connection
with new office openings.  The Company believes its advertising
contributes significantly to its ability to compete effectively with other
providers of small-loan consumer credit.  Advertising expenses were
approximately 2.9% of total revenues in fiscal 2010, 3.3% in fiscal 2009 and
3.7% in fiscal 2008.





Competition.  The
small-loan consumer finance industry is highly fragmented, with numerous
competitors.  The majority of the Company's competitors are
independent operators with generally less than 100
offices.  Competition from nationwide consumer finance businesses is
limited because these companies typically do not make loans of less than
$2,500.





The
Company believes that competition between small-loan consumer finance companies
occurs primarily on the basis of the strength of customer relationships,
customer service and reputation in the local community, rather than pricing, as
participants in this industry generally charge comparable interest rates and
fees.  The Company believes that its relatively larger size affords it
a competitive advantage over smaller companies by increasing its access to, and
reducing its cost of, capital.  In addition the Company’s in-house
integrated computer system provides data processing and the Company’s in-house
print shop provides direct mail and other printed items at a substantially
reduced cost to the Company.





Several
of the states in which the Company currently operates limit the size of loans
made by small-loan consumer finance companies and prohibit the extension of more
than one loan to a customer by any one company.  As a result, many
customers borrow from more than one finance company, enabling the Company,
subject to the limitations of various consumer protection and privacy statutes
including, but not limited to the federal Fair Credit Reporting Act and the
Gramm-Leach-Bliley Act, to obtain information on the credit history of specific
customers from other consumer finance companies.





Government
Regulation.





U. S.
Operations.  Small-loan consumer finance companies are subject
to extensive regulation, supervision and licensing under various federal and
state statutes, ordinances and regulations.  In general, these
statutes establish maximum loan amounts and interest rates and the types and
maximum amounts of fees, insurance premiums and other fees that may be
charged.  In addition, state laws regulate collection procedures, the
keeping of books and records and other aspects of the operation of small-loan
consumer finance companies.  Generally, state regulations also
establish minimum capital requirements for each local office.  State
agency approval is required to open new branch offices.  Accordingly,
the ability of the Company to expand by acquiring existing offices and opening
new offices will depend in part on obtaining the necessary regulatory
approvals.





A Texas
regulation requires the approval of the Texas Consumer Credit Commissioner for
the acquisition, directly or indirectly, of more than 10% of the voting or
common stock of a consumer finance company.  A Louisiana statute
prohibits any person from acquiring control of 50% or more of the shares of
stock of a licensed consumer lender, such as the Company, without first
obtaining a license as a consumer lender.  The overall effect of these
laws, and similar laws in other states, is to make it more difficult to acquire
a consumer finance company than it might be to acquire control of a nonregulated
corporation.





Each of
the Company's branch offices is separately licensed under the laws of the state
in which the office is located.   Licenses granted by the
regulatory agencies in these states are subject to renewal every year and may be
revoked for failure to comply with applicable state and federal laws and
regulations.  In the states in which the Company currently operates,
licenses may be revoked only after an administrative hearing.




8


The
Company and its operations are regulated by several state agencies, including
the Industrial Loan Division of the Office of the Georgia Insurance
Commissioner, the Consumer Finance Division of the South Carolina Board of
Financial Institutions, the South Carolina Department of Consumer Affairs, the
Texas Office of the Consumer Credit Commissioner, the Oklahoma Department of
Consumer Credit, the Louisiana Office of Financial Institutions, the Tennessee
Department of Financial Institutions, the Missouri Division of Finance, the
Consumer Credit Division of the Illinois Department of Financial Institutions,
the Consumer Credit Bureau of the New Mexico Financial Institutions Division,
the  Kentucky  Department  of  Financial  Institutions,
and the  Alabama  State Banking Department.  These
state regulatory agencies audit the Company's local offices from time to time,
and each state agency performs an annual compliance audit of the Company's
operations in that state.





Insurance. The Company is
also subject to state regulations governing insurance agents in the states in
which it sells credit insurance.  State insurance regulations require
that insurance agents be licensed, govern the commissions that may be paid to
agents in connection with the sale of credit insurance and limit the premium
amount charged for such insurance.  The Company's captive insurance
subsidiary is regulated by the insurance authorities of the Turks and Caicos
Islands of the British West Indies, where the subsidiary is organized and
domiciled.





Consumer finance companies are
affected by changes in state and federal statutes and regulations.The
Company actively participates in trade associations and in lobbying efforts in
the states in which it operates and at the federal level.  There have
been, and the Company expects that there will continue to be, media attention,
initiatives, discussions and proposals regarding the entire consumer credit
industry, as well as our particular business, and possible significant changes
to the laws and regulations that govern our business.  In some cases,
proposed or pending legislative or regulatory changes have been introduced that
would, if enacted,  have a material adverse effect on, or possibly
even eliminate, our ability to continue our current business.  We can
give no assurance that the laws and regulations that govern our business will
remain unchanged or that any such future changes will not materially and
adversely affect or in the worst case, eliminate, the Company’s lending
practices, operations, profitability or prospects.   See Part I,
Item 1A, “Risk Factors,” for a further discussion of the potential impact of
regulatory changes on our business.





State
legislation.We are subject to numerous state laws and
regulations that affect our lending activities.  Many of these
regulations impose detailed and complex constraints on the terms of our loans,
lending forms and operations.  Failure to comply with applicable laws
and regulations could subject us to regulatory enforcement action that could
result in the assessment against us of civil, monetary or other
penalties.





During
the past year, several state legislative and regulatory proposals were
introduced which, had they become law, would have had a material adverse impact
on our operations and ability to continue to conduct business in the relevant
state.  Although to date none of these state initiatives have been
successful, state legislatures continue to receive pressure to adopt similar
legislation that would affect our lending operations.  In particular,
a legislative initiative to limit the accessibility of installment credit to
consumers in Illinois and to curb perceived abuses prevalent in some forms of
consumer lending has been passed by the Illinois Senate and concurred on by the
Illinois House.  The Illinois General Assembly now has until June 25,
2010, to forward the legislation to the Illinois Governor who can either sign it
into law, veto it or amendatorily veto it.  If the Governor takes no
action on the legislation within 60 days of receiving it, it automatically
becomes law.  The legislation, as passed by the Illinois legislature,
places minimal limitations on our current operations and its impact is not
expected to be material, however, should the Governor exercise his amendatory
veto power, that could substantially change.





In
addition, any adverse change in existing laws or regulations, or any adverse
interpretation or litigation relating to existing laws and regulations in any
state in which we operate, could subject us to liability for prior operating
activities or could lower or eliminate the profitability of our operations going
forward by, among other things, reducing the amount of interest and fees we can
charge in connection with our loans.  If these or other factors lead
us to close our offices in a state, then in addition to the loss of net revenues
attributable to that closing, we would also incur closing costs such as lease
cancellation payments and we would have to write off assets that we could no
longer use.  If we were to suspend rather than permanently cease our
operations in a state, we may also have continuing costs associated with
maintaining our offices and our employees in that state, with little or no
revenues to offset those costs.




9


Federal
legislation.  In addition to state and local laws and
regulations, we are subject to numerous federal laws and regulations that affect
our lending operations.  These laws include the Truth-in-Lending Act,
the Equal Credit Opportunity Act and the Fair Credit Reporting Act and the
regulations thereunder and the Federal Trade Commission's Credit Practices
Rule.  These laws require the Company to provide complete disclosure
of the principal terms of each loan to the borrower, prior to the consummation
of the loan transaction, prohibit misleading advertising, protect against
discriminatory lending practices and proscribe unfair credit
practices.  Among the principal disclosure items under the
Truth-in-Lending Act are the terms of repayment, the final maturity, the total
finance charge and the annual percentage rate charged on each
loan.  The Equal Credit Opportunity Act prohibits creditors from
discriminating against loan applicants on the basis of race, color, sex, age or
marital status.  Pursuant to Regulation B promulgated under the Equal
Credit Opportunity Act, creditors are required to make certain disclosures
regarding consumer rights and advise consumers whose credit applications are not
approved of the reasons for the rejection.  The Fair Credit Reporting
Act requires the Company to provide certain information to consumers whose
credit applications are not approved on the basis of a report obtained from a
consumer reporting agency. The Credit Practices Rule limits the types of
property a creditor may accept as collateral to secure a consumer
loan.  Violations of the statutes and regulations described above may
result in actions for damages, claims for refund of payments made, certain fines
and penalties, injunctions against certain practices and the potential
forfeiture of rights to repayment of loans.





Although
these laws and regulations have remained substantially unchanged for many years,
the laws and regulations directly affecting our lending activities are under
review and are subject to change as a result of current economic conditions,
changes in the make-up of the current executive and legislative branches, and
the political and media focus on issues of consumer and borrower
protection.  See Part I, Item 1A, “Risk Factors - Media reports and
public perception of consumer installment loans as being predatory or abusive
could materially adversely affect our business, prospects, results of operations
and financial condition” below.  Any changes in such laws and
regulations could force us to modify, suspend or cease part or, in the worst
case, all of our existing operations.  It is also possible that the
scope of federal regulations could change or expand in such a way as to preempt
what has traditionally been state law regulation of our business
activities.  The enactment of one or more of such regulatory changes
could materially and adversely affect our business, results of operations and
prospects.





Various
legislative proposals addressing consumer credit transactions are currently
pending in the U.S. Congress. During the past 18 months Congress has passed laws
affecting credit cards, home mortgage lending, auto finance, retail sales
finance and other areas of consumer finance. Congressional members continue to
receive pressure from consumer advocates and other industry opposition groups to
adopt legislation to address various aspects of consumer credit
transactions.  As part of a sweeping package of financial industry
reform regulations, the U.S. Senate recently passed Senate bill S. 3217 entitled
the “Restoring American Financial Stability Act of 2010.” This bill is the
companion to H.R. 4173 entitled “The Wall Street Reform and Consumer Protection
Act of 2009” which was passed by the house of Representatives in November
2009.  Both bills, which now go to a House-Senate conference committee
to resolve their differences, would create a new federal regulatory entity with
virtually unlimited power to regulate the form and content of all consumer
financial transactions.  Although the form and organizational
structure of the new entity differ in some respects under the two bills (the
House bill would create an independent agency known as the Consumer Financial
Protection Agency and the Senate bill would establish a Consumer Financial
Protection Bureau within the Federal Reserve), we believe it highly likely that
a new federal regulatory entity in one form or another or some combination of
the two will be part of the reconciled legislation and that the legislation will
be signed into law by the President.  It is impossible to predict the
effect that the creation of such an unprecedented federal regulator will have on
the Company’s operations and on access to consumer credit in general; however,
there can be no assurance that any such regulatory entity would not exercise its
powers in a manner that will, either directly or indirectly, have a material and
adverse effect on, or eliminate altogether, the Company’s ability to operate its
business profitably or on terms substantially similar to those on which it
currently operates.   Although neither S. 3217 nor H.R. 4173
authorize the new federal regulator to set interest rates on consumer loans,
bills that would create a federal usury cap, applicable to all consumer credit
transactions and substantially below rates at which the Company could continue
to operate profitably, are still pending in both houses of
Congress.  Any federal legislative or regulatory action that severely
restricts or prohibits the provision of small-loan consumer credit and similar
services on terms substantially similar to those we currently provide would, if
enacted, have a material adverse impact on our business, prospects, results of
operations and financial condition.  Any federal law that would impose
a national 36% or similar annualized credit rate cap on our services, such as
those currently pending in Congress or in similar congressional bills, would, if
enacted, almost certainly eliminate our ability to continue our current
operations.  See Part I, Item 1A, “Risk Factors – Federal legislative
or regulatory proposals, initiatives, actions or changes that are adverse to our
operations or result in adverse regulatory proceedings, or our failure to comply
with existing or future federal laws and regulations, could force us to modify,
suspend or cease part or all of our nationwide operations,” for further
information regarding the potential impact of adverse legislative and regulatory
changes.




10


Mexico
Operations.Effective May 1, 2008, World Acceptance
Corporation de Mexico, S. de R.L. de C.V. was converted to WAC de Mexico, S.A.
de C.V., SOFOM, E.N.R. (“WAC de Mexico SOFOM”), and due to such conversion, this
entity is now organized as a Sociedad Financiera de Objeto Múltiple, Entidad No
Regulada (Multiple Purpose Financial Company, Non-Regulated Entity or “SOFOM,
ENR”). Mexico law provides for administrative regulation of companies which are
organized as SOFOM, ENRs. As such, WAC de Mexico SOFOM is mainly governed by
different federal statutes, including the General Law of Auxiliary Credit
Activities and Organizations, the Law for the Transparency and Order of
Financial Services, the General Law of Credit Instruments and Operations, and
the Law of Protection and Defense to the User of Financial Services. SOFOM, ENRs
are also subject to regulation by and surveillance of the National Commission
for the Protection and Defense of Users of Financial Services
(“CONDUSEF”).  CONDUSEF, among others, acts as mediator and arbitrator in
disputes between financial lenders and customers, and resolves claims filed by
loan customers. CONDUSEF also prevents unfair and discriminatory lending
practices, and regulates, among others, the form of loan contracts, consumer
disclosures, advertisement, and certain operating procedures of SOFOM, ENRs,
with such regulations pertaining primarily to consumer protection and adequate
disclosure and transparency in the terms of borrowing.  Neither CONDUSEF
nor federal statutes impose interest rate caps on loans granted by SOFOM,
ENRs.  The consumer loan industry, as with most businesses in Mexico, is
also subject to other various regulations in the areas of tax compliance,
anti-money laundering, and employment matters, among others, by various federal,
state and local governmental agencies. Generally, federal regulations control
over the state statutes with respect to the consumer loan operations of 
SOFOM, ENRs.





Employees.  As of
March 31, 2010, the Company had 3,029 U.S. employees, none of whom were
represented by labor unions and 602 employees in Mexico, all of whom were
represented by a Mexican based labor union.  The Company considers its
relations with its personnel to be good.  The Company seeks to hire
people who will become long-term employees.  The Company experiences a
high level of turnover among its entry-level personnel, which the Company
believes is typical of the small-loan consumer finance industry.





Executive
Officers.  The names and ages, positions, terms of office and
periods of service of each of the Company's executive officers (and other
business experience for executive officers who have served as such for less than
five years) are set forth below.  The term of office for each
executive officer expires upon the earlier of the appointment and qualification
of a successor or such officers' death, resignation, retirement or
removal.





Period
      of Service as Executive Officer andPre-executive
      Officer Experience (if anName and Age
                    
                    Position
                    
                    Executive Officer for Less Than Five
      Years)A.
      Alexander McLean, III (58)
                    
                    Chief
      Executive Officer;
                      Chairman
      and Director
                    
                    Chief
      Executive Officer since March 2006; Executive Vice President from August
      1996 until March 2006; Senior Vice President from July 1992 until August
      1996; CFO from June 1989 until March 2006; Director since June 1989; and
      Chairman since August 2007.Kelly
      M. Malson (39)
                    
                    Senior
      Vice President and
                      Chief
      Financial Officer
                    
                    Senior
      Vice President and Chief Financial Officer since May 2009; Vice President
      and CFO from March 2006 to May 2009; Vice President of Internal Audit from
      September 2005 to March 2006; Financial Compliance Manager, Itron Inc.,
      from July 2004 to August 2005; Senior Manager, KPMG LLP from April 2002
      until July
2004.




11





Mark
      C. Roland (53)
                
                President
      and Chief Operating Officer
                  and
      Director
                
                President
      since March 2006; Chief Operating Officer since April 2005; Executive Vice
      President from April 2002 to March 2006; Senior Vice President from
      January 1996 to April 2002; Director since August 2007.Jeff
      L. Tinney (47)
                
                Senior
      Vice President,
                  Western
      Division
                
                Senior
      Vice President, Western Division, since June 2007; Vice President,
      Operations – Texas  and New Mexico from June 2001 to June 2007;
      Vice President, Operations – Texas and Louisiana from April 1998 to June
      2001; Vice President, Operations - Louisiana from January 1997 to April
      1998.D.
      Clinton Dyer (37)
                
                Senior
      Vice President,
                  Central
      Division
                
                Senior
      Vice President, Central Division since June 2005; Vice President,
      Operations – Tennessee and Kentucky from April 2002 to June 2005;
      Supervisor of Nashville District from September 2001 to March 2002;
      Manager in Nashville from January 1997 to August 2001.James
      D. Walters (42)
                
                Senior
      Vice President,
                  Southern
      Division
                
                Senior
      Vice President, Southern Division since April 2005; Vice President,
      Operations – South Carolina and Alabama from August 1998 to March
      2005.Francisco
      Javier Sauza Del Pozo (55)
                
                Senior
      Vice President,
                  Mexico
                
                Senior
      Vice President, Mexico since May 2008; Vice President of Operations from
      April 2005 to May 2008; President of Border Consulting Group from July
      2004 to March 2005; Senior Manager of KPMG and BearingPoint Consulting
      from January 2000 to June 2004; Partner of Atlanta Consulting Group from
      February 1998 to January
2000.





Available Information. The
information regarding our website and availability of our filings with the SEC
as described in the second paragraph under “Introduction” above is incorporated
by reference into this Item 1 of Part I.





Item
1A.  Risk Factors





Forward-Looking
Statements





This
annual report contains various “forward-looking statements” within the meaning
of Section 21E of the Securities Exchange Act of 1934, that are based on
management’s beliefs and assumptions, as well as information currently available
to management.  Statements other than those of historical fact, as
well as those identified by the use of words such as “anticipate,” “estimate,”
“plan,” “expect,” “believe,” “may,” “will,” “should,” and similar expressions,
are forward-looking statements.  Although we believe that the
expectations reflected in any such forward-looking statements are reasonable, we
can give no assurance that such expectations will prove to be
correct.  Any such statements are subject to certain risks,
uncertainties and assumptions.  Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect, our
actual financial results, performance or financial condition may vary materially
from those anticipated, estimated or expected.  Among the key factors
that could cause our actual financial results, performance or condition to
differ from the expectations expressed or implied in such forward-looking
statements are the following: recently or future enacted or proposed
legislation; changes in interest rates; risks inherent in making loans,
including repayment risks and value of collateral; the timing and amount of
revenues that may be recognized by the Company; changes in current revenue and
expense trends (including trends affecting charge-offs); changes in the
Company’s markets and general changes in the economy (particularly in the
markets served by the Company); and the unpredictable nature of
litigation.  These and other risks are discussed below in more detail
below in this “Risk Factors” section and in the Company’s other filings made
from time to time with the SEC.  The Company does not undertake any
obligation to update any forward-looking statements it may make.




12


Investors
should consider the following risk factors, in addition to the other information
presented in this annual report and the other reports and registration
statements we file from time to time with the SEC, in evaluating us, our
business and an investment in our securities.   Any of the
following risks, as well as other risks, uncertainties, and possibly inaccurate
assumptions underlying our plans and expectations, could result in harm to our
business, results of operations and financial condition and cause the value of
our securities to decline, which in turn could cause investors to lose all or
part of their investment in our Company. These factors, among others, could also
cause actual results to differ from those we have experienced in the past or
those we may express or imply from time to time in any forward-looking
statements we make.  Investors are advised that it is impossible to
identify or predict all risks, and that risks not currently known to us or that
we currently deem immaterial also could affect us in the future.





Unfavorable
state legislative or regulatory actions or changes, adverse outcomes in
litigation or regulatory proceedings or failure to comply with existing laws and
regulations could force us to cease, suspend or modify our operations in a
state, potentially resulting in a material adverse effect on our business,
results of operations and financial condition.





We are
subject to numerous state laws and regulations that affect our lending
activities.  Many of these regulations impose detailed and complex
constraints on the terms of our loans, lending forms and
operations.  Failure to comply with applicable laws and regulations
could subject us to regulatory enforcement action that could result in the
assessment against us of civil, monetary or other penalties including the
suspension or revocation of our licenses to lend in one or more
jurisdictions.





Changes
in the laws under which we currently operate or the enactment of new laws
governing our operations resulting from state political activities and
legislative or regulatory initiatives could have a material adverse effect on
all aspects of our business in a particular state.  See Part 1, Item
1, “Description of Business, Government Regulation” for further discussion of
such current state activities and initiatives.





Federal
legislative or regulatory proposals, initiatives, actions or changes that are
adverse to our operations or result in adverse regulatory proceedings, or our
failure to comply with existing or future federal laws and regulations, could
force us to modify, suspend or cease part or all of our nationwide
operations.





In
addition to state and local laws and regulations, we are subject to numerous
federal laws and regulations that affect our lending
operations.  Although these laws and regulations have remained
substantially unchanged for many years, the laws and regulations directly
affecting our lending activities are under review and are subject to change as a
result of current economic conditions, changes in the make-up of the current
executive and legislative branches, and the political and media focus on issues
of consumer and borrower protection.  Any changes in such laws and
regulations could force us to modify, suspend or cease part, or, in the worst
case, all of our existing operations.  It is also possible that the
scope of federal regulations could change or expand in such a way as to preempt
what has traditionally been state law regulation of our business
activities.  The enactment of one or more of such regulatory changes
could materially and adversely affect our business, results of operations and
prospects.





Changes
in the laws under which we currently operate or the enactment of new laws
governing our operations resulting from federal political activities and
legislative or regulatory initiatives could have a material adverse effect on
all aspects of our operations.  See Part 1, Item 1, “Description of
Business Government, Regulation” for further discussion of such current federal
activities and initiatives.





Media
and public perception of consumer installment loans as being predatory or
abusive could materially adversely affect our business, prospects, results of
operations and financial condition.





Consumer
advocacy groups and various other media sources continue to advocate for
governmental and regulatory action to prohibit or severely restrict our products
and services.  These critics frequently characterize our products and
services as predatory or abusive toward consumers.  If this negative
characterization of the consumer installment loans we make and/or ancillary
services we provide becomes widely accepted by government policy makers or is
embodied in legislative, regulatory, policy or litigation developments that
adversely affect our ability to continue offering our products and services or
the profitability of these products and services, our business, results of
operations and financial condition would be materially and adversely
affected.




13


Our
continued expansion into Mexico may increase the risks inherent in conducting
international operations, contribute materially to increased costs and
negatively affect our business, prospects, results of operations and financial
condition.





Although
our operations in Mexico accounted for only 4.1% of our revenues during fiscal
2010 and 4.3% of our gross loans receivable at March 31, 2010, we intend to
continue opening offices and expanding our presence in Mexico.  In
addition, if to the extent that the state and federal regulatory climate in the
U.S. changes in ways that adversely affect our ability to continue profitable
operations in one or more U.S. states, we could become increasingly dependent on
our operations in Mexico as our only viable expansion or growth strategy. In doing so, we may
expose an increasing portion of our business to risks inherent in conducting
international operations, including currency fluctuations and devaluations,
unsettled political conditions, communication and translation errors due to
language barriers, compliance with differing legal and regulatory regimes and
differing cultural attitudes toward regulation and compliance.





We
are subject to interest rate risk resulting from general economic conditions and
policies of various governmental and regulatory agencies.





Interest
rates are highly sensitive to many factors that are beyond our control,
including general economic conditions and policies of various governmental and
regulatory agencies and, in particular, the Federal Reserve
Board.  Changes in monetary policy, including changes in interest
rates, could influence the amount of interest we pay on our revolving credit
facility or any other floating interest rate obligations we may incur, which
would increase our operating costs and decrease our operating
margins.  See Part II, Item 7, “Management’s Discussion and Analysis
of Financial Condition and Results of Operations – Quantitative and Qualitative
Disclosures About Market Risk” for additional information regarding our interest
rate risk.





Our
use of derivatives exposes us to credit and market risk.





We use
derivatives to manage our exposure to interest rate risk and foreign currency
fluctuations.  By using derivative instruments, the Company is exposed
to credit and market risk.  Additional information regarding our
exposure to credit and market risk is included in Part II, Item 7, “Management’s
Discussion and Analysis of Financial Condition and Results of Operations –
Quantitative and Qualitative Disclosures About Market Risk.”





We
depend to a substantial extent on borrowings under our revolving credit
agreement to fund our liquidity needs.





We have
an existing revolving credit agreement committed through July 2011 that allows
us to borrow up to $238.3 million, assuming we are in compliance with a number
of covenants and conditions.   If our existing sources of
liquidity become insufficient to satisfy our financial needs or our access to
these sources becomes unexpectedly restricted, we may need to try to raise
additional debt or equity in the future.  If such an event were to
occur, we can give no assurance that such alternate sources of liquidity would
be available to us at all or on favorable terms.  Additional
information regarding our liquidity risk is included in Part II, Item 7,
“Management’s Discussion and Analysis of Financial Condition and Results of
Operations — Liquidity and Capital Resources”.





Our
revolving credit agreement contains restrictions and limitations that could
affect our ability to operate our business.





Our
revolving credit agreement contains a number of covenants that could adversely
affect our business and the flexibility to respond to changing business and
economic conditions or opportunities.  Among other things, these
covenants limit our ability to declare or pay dividends, redeem our subordinated
debt, incur additional debt or enter into a merger, consolidation or sale of
substantial assets.  In addition, if we were to breach any covenants
or obligations under our revolving credit agreement and such breaches were to
result in an event of default, our lenders could cause all amounts outstanding
to become due and payable, subject to applicable grace periods.  This
could trigger cross-defaults under our other existing or future debt instruments
and materially and adversely affect our financial condition and ability to
continue operating our business as a going concern.  Additional
information regarding our revolving credit facility and other indebtedness is
included in the section caption “Management’s Discussion and Analysis of
Financial Condition and Results of Operations - Liquidity and Capital
Resources.”




14


Adverse
conditions in the capital and credit markets generally, any particular liquidity
problems affecting one or more members of the syndicate of banks that are
members of the Company’s credit facility or other factors outside our control,
could affect the Company’s ability to meet its liquidity needs and its cost of
capital.





The
severe turmoil that has persisted in the domestic and global credit and capital
markets and broader economy since 2008 has negatively affected corporate
liquidity, equity values, credit agency ratings and confidence in financial
institutions in general.  In addition to cash generated from
operations, the Company depends on borrowings from institutional lenders to
finance its operations, acquisitions and office expansion plans.  The
Company is not insulated from the pressures and potentially negative
consequences of the recent financial crisis and similar risks beyond our control
that have and may continue to affect the capital and credit markets, the broader
economy, the financial services industry or the segment of that industry in
which we operate. Additional information regarding our liquidity and related
risks is included in the section caption “Management’s Discussion and Analysis
of Financial Condition and Results of Operations - Liquidity and Capital
Resources.”





We
are exposed to credit risk in our lending activities.





Our
ability to collect on loans to individuals, our single largest asset group,
depends on the willingness and repayment ability of our
borrowers.  Any material adverse change in the ability or willingness
of a significant portion of our borrowers to meet their obligations to us,
whether due to changes in economic conditions, the cost of consumer goods,
interest rates, natural disasters, acts of war or terrorism, or other causes
over which we have no control, would have a material adverse impact on our
earnings and financial condition. Additional information regarding our credit
risk is included in the section caption “Management’s Discussion and Analysis of
Financial Condition and Reports of Operation — Liquidity and Capital
Resources”.





If
our estimates of loan losses are not adequate to absorb actual losses, our
provision for loan losses would increase.  This would result in a
decline in our future revenues and earnings.





We
maintain an allowance for loan losses for loans we make directly to
consumers.  This allowance is an estimate. If our actual loan losses
exceed the assumption used to establish the allowance, , our provision for loan
losses would increase, which would result in a decline in our future revenues
and earnings. Additional information regarding our allowance for loan losses is
included in the section caption “Management’s Discussion and Analysis of
Financial Condition and Results of Operations – Credit Quality.”





The
concentration of our revenues in certain states could adversely affect
us.





We
currently operate consumer installment loan offices in 11 states in the United
States.  Any adverse legislative or regulatory change in any one of
our states but particularly in any of our larger states could have a material
adverse effect on our business, prospects, results of operation or financial
condition.





We
have a significant amount of goodwill, which is subject to periodic review and
testing for impairment.





A portion
of our total assets at March 31, 2010 is comprised of goodwill.  Under
generally accepted accounting principles, goodwill is subject to periodic review
and testing to determine if it is impaired.  Unfavorable trends in our
industry and unfavorable events or disruptions to our operations resulting from
adverse legislative or regulatory actions or from other unpredictable causes
could result in significant goodwill impairment charges.





Controls
and procedures may fail or be circumvented.





Controls
and procedures are particularly important for small-loan consumer finance
companies. Any system of controls, however well designed and operated, is based
in part on certain assumptions and can provide only reasonable, not absolute,
assurances that the objectives of the system are met.  Any failure or
circumvention of our controls and procedures or failure to comply with
regulations related to controls and procedures could have a material adverse
effect on our business, results of operations and financial
condition.




15


If
we lose the services of any of our key management personnel, our business could
suffer.





Our
future success significantly depends on the continued services and performance
of our key management personnel. Competition for these employees is
intense.  The loss of the services of members of our senior management
or key team members or the inability to attract additional qualified personnel
as needed could materially harm our business.





Regular
turnover among our managers and other employees at our offices makes it more
difficult for us to operate our offices and increases our costs of operations,
which could have an adverse effect on our business, results of operations and
financial condition.





The
annual turnover as of March 31, 2010 among our office employees was
approximately 31.2%.  This turnover increases our cost of operations
and makes it more difficult to operate our offices.  If we are unable
to keep our employee turnover rates consistent with historical levels or if
unanticipated problems arise from our high employee turnover, our business,
results of operations and financial condition could be adversely
affected.





Our
ability to manage our growth may deteriorate, and our ability to execute our
growth strategy may be adversely affected.





We have
experienced substantial growth in recent years.  Our growth strategy,
which is based on opening and acquiring offices in existing and new markets, is
subject to significant risks, some of which are beyond our control,
including:





·
            the
      prevailing laws and regulatory environment of each state in which we
      operate or seek to operate, and, to the extent applicable, federal laws
      and regulations, which are subject to change at any
  time;


·
            our
      ability to obtain and maintain any regulatory approvals, government
      permits or licenses that may be
required;


·      the
degree of competition in new markets and its effect on our ability to attract
new customers;


·      our
ability to recruit, train and retain qualified personnel;


·      our
ability to adapt our infrastructure and systems to accommodate our growth;
and


·      our
ability to obtain adequate financing for our expansion plans.





We
currently lack product and business diversification; as a result, our revenues
and earnings may be disproportionately negatively impacted by external factors
and may be more susceptible to fluctuations than more diversified
companies.





Our
primary business activity is offering small consumer installment loans together
with, in some states in which we operate, related ancillary products. Thus, any
developments, whether regulatory, economic or otherwise, that would hinder,
reduce the profitability of or limit our ability to operate our small consumer
installment loan business on the terms currently conducted would have a direct
and adverse impact on our business, profitability and perhaps even our
viability.  Our current lack of product and business diversification
could inhibit our opportunities for growth, reduce our revenues and profits and
make us more susceptible to earnings fluctuations than many other financial
institutions whose operations are more diversified.





Interruption
of, or a breach in security relating to, our information systems could adversely
affect us.





We rely
heavily on communications and information systems to conduct our
business.  Each office is part of an information network that is
designed to permit us to maintain adequate cash inventory, reconcile cash
balances on a daily basis and report revenues and expenses to our
headquarters.  Any failure, interruption or breach in security of
these systems, including any failure of our back-up systems, could result in
failures or disruptions in our customer relationship management, general ledger,
loan and other systems and could result in a loss of customer business, subject
us to additional regulatory scrutiny, or expose us to civil litigation and
possible financial liability, any of which could have a material adverse effect
on our financial condition and results of operations.




16


Our
centralized headquarters functions are susceptible to disruption by catastrophic
events, which could have a material adverse effect on our business, results of
operations and financial condition.





Our
headquarters building is located in Greenville, South Carolina.  Our
information systems and administrative and management processes are primarily
provided to our offices from this centralized location, and they could be
disrupted if a catastrophic event, such as a tornado, power outage or act of
terror, destroyed or severely damaged our headquarters.  Any such
catastrophic event or other unexpected disruption of our headquarters functions
could have a material adverse effect on our business, results of operations and
financial condition.





Absence
of dividends could reduce our attractiveness to investors.





Since
1989, we have not declared or paid cash dividends on our common stock and may
not pay cash dividends in the foreseeable future.  As a result, our
common stock may be less attractive to certain investors than the stock of
dividend-paying companies.





Various
provisions of our charter documents and applicable laws could delay or prevent a
change of control that shareholders may favor.





Provisions
of our articles of incorporation, South Carolina law, and the laws in several of
the states in which our operating subsidiaries are incorporated could delay or
prevent a change of control that the holders of our common stock may favor or
may impede the ability of our shareholders to change our
management.  In particular, our articles of incorporation and South
Carolina law, among other things, authorize our board of directors to issue
preferred stock in one or more series, without shareholder approval, and will
require the affirmative vote of holders of two-thirds of our outstanding shares
of voting stock to approve our merger or consolidation with another
corporation.  Additional information regarding the similar effect of
lows in certain states in which we operate is described in Part 1, Item 1,
“Description of Business – Government Regulation.”





Overall
stock market volatility may materially and adversely affect the market price of
our common stock.





The
Company’s common stock price has been and is likely to continue to be subject to
significant volatility.  A variety of factors could cause the price of
the common stock to fluctuate, perhaps substantially, including: general market
fluctuations resulting from factors not directly related to the Company’s
operations or the inherent value of its common stock; state or federal
legislative or regulatory proposals, initiatives, actions or changes that are,
or are perceived to be, adverse to our operations; announcements of developments
related to our business; fluctuations in our operating results and the provision
for loan losses; low trading volume in our common stock; general conditions in
the financial service industry, the domestic or global economy or the domestic
or global credit or capital markets; changes in financial estimates by
securities analysts; our failure to meet the expectations of securities analysts
or investors; negative commentary regarding our Company and corresponding
short-selling market behavior; adverse developments in our relationships with
our customers; legal proceedings brought against the Company or its officers; or
significant changes in our senior management team.





Item
1B.   Unresolved Staff Comments





None.





Item
2.   Properties





The
Company owns its headquarters facility of approximately 21,000 square feet and a
printing and mailing facility of approximately 13,000 square feet in Greenville,
South Carolina, and all of the furniture, fixtures and computer terminals
located in each branch office.  As of March 31, 2010, the Company had
990 branch offices, most of which are leased pursuant to short-term operating
leases.  During the fiscal year ended March 31, 2010, total lease
expense was approximately $15.9 million, or an average of approximately $16,500
per office.  The Company's leases generally provide for an initial
three- to five-year term with renewal options.  The Company's branch
offices are typically located in shopping centers, malls and the first floors of
downtown buildings.  Branches in the U.S. offices generally have a
uniform physical layout with an average size of 1,500 square feet and in Mexico
with an average size of 1,600 square feet.


17





Item
3.   Legal Proceedings





From time
to time the Company is involved in routine litigation relating to claims arising
out of its operations in the normal course of business in which damages in
various amounts are claimed.  The Company believes that it is not
currently a party to any pending legal proceedings that would have a material
adverse effect on its financial condition or results of operations.





Item
4.   Reserved





PART
II.





Item 5.
              Market
      for Registrant's Common Equity, Related Stockholder Matters and Issuer
      Purchases of Equity
Securities





Since
November 26, 1991, the Company's common stock has traded on NASDAQ, currently on
the NASDAQ Global Select Market ("NASDAQ"), under the symbol
WRLD.   As of June 8, 2010, there were 63 holders of record of
Common Stock and a significant number of persons or entities who hold their
stock in nominee or “street” names through various brokerage firms.





Since April 1989, the Company has not declared or paid any
cash dividends on its common stock.  Its policy has been to retain
earnings for use in its business and on occasion, repurchase its common stock on
the open market.  In the future, the Company's Board of Directors will
determine whether to pay cash dividends based on conditions then existing,
including the Company's earnings, financial condition, capital requirements and
other relevant factors.  In addition, the Company's credit agreements
contain certain restrictions on the payment of cash dividends on its capital
stock.  See “Management’s Discussion and Analysis of Financial
Condition and Results of Operations Liquidity and Capital
Resources.”





On May
11, 2010, the Board of Directors authorized the Company to repurchase up to $20
million of the Company’s common stock.  This repurchase authorization
follows, and is in addition to, a similar repurchase authorization of $15
million announced May 11, 2009.  After taking into account all shares
repurchased through June 8, 2010, the Company has $6.2 million in aggregate
remaining repurchase capacity under all of the company’s outstanding repurchase
authorizations.  The timing and actual number of shares repurchased
will depend on a variety of factors, including the stock price, corporate and
regulatory requirements and other market and economic
conditions.  Although the repurchase authorizations above have no
stated expiration date, the Company’s stock repurchase program may be suspended
or discontinued at any time.  The following table provides information
with respect to purchases made by the Company of shares of the Company’s common
stock during the three month period ended March 31, 2010:





Issuer
Purchases of Equity Securities


ApproximateTotal
                          
                          
                          DollarNumber
                          
                          
                          Value
      ofof
      Shares
                          
                          
                          SharesPurchased
                          
                          
                          That
      May Yetas
      part of
                          
                          
                          beTotal
                          
                          
                          Average
                          
                          
                          Publicly
                          
                          
                          PurchasedNumber
      of
                          
                          
                          Price
      Paid
                          
                          
                          Announced
                          
                          
                          Under
      theShares
                          
                          
                          per
                          
                          
                          Plans
                          
                          
                          Plans
      orPurchased
                          
                          
                          Share
                          
                          
                          or Programs
                          
                          
                          ProgramsJanuary
      1 throughJanuary
      31, 2010
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          15,000,000
                          (1)February
      1 throughFebruary
      28, 2010
                          
                          
                          38,500
                          
                          
                          
                          37.26
                          
                          
                          
                          38,500
                          
                          
                          
                          13,565,343March
      1 throughMarch
      31, 2010
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          13,565,343Total
      for the quarter
                          
                          
                          38,500
                          
                          
                          
                          37.26
                          
                          
                          
                          38,500




18


(1)
            In
      May 2009, the Board of Directors authorized the Company to repurchase up
      to $15 million of common stock.  In addition, as previously
      announced, subsequent to the end of fiscal 2010, on May 11, 2010, the
      Board of Directors authorized the Company to repurchase up to $20 million
      of additional common stock.  After taking into account all
      shares repurchased through May 11, 2010, the Company had approximately
      $23.3 million in aggregate remaining repurchase capacity under all
      outstanding repurchase
authorizations.





The
timing and actual number of shares repurchased will depend on a variety of
factors, including the stock price, corporate and regulatory requirements and
other market and economic conditions.  The Company’s stock repurchase
program is not subject to specific targets or any expiration date, but may be
suspended or discontinued at any time.





The table
below reflects the stock prices published by NASDAQ by quarter for the last two
fiscal years.  The last reported sale price on June 7, 2010 was
$34.15.





Market
      Price of Common StockFiscal 2010Quarter
                    
                    High
                    
                    
                    LowFirst
                    
                    $
                    30.87
                    
                    
                    $
                    16.09Second
                    
                    
                    28.16
                    
                    
                    
                    18.12Third
                    
                    
                    37.42
                    
                    
                    
                    23.25Fourth
                    
                    
                    44.10
                    
                    
                    
                    35.67





Fiscal 2009Quarter
                  
                  High
                  
                  
                  LowFirst
                  
                  $
                  45.99
                  
                  
                  $
                  31.91Second
                  
                  
                  43.50
                  
                  
                  
                  31.00Third
                  
                  
                  36.25
                  
                  
                  
                  13.44Fourth
                  
                  
                  22.90
                  
                  
                  
                  10.31




19





Item
6.   Selected Financial Data





Selected
Consolidated Financial and Other Data





(Amounts
in thousands, except per share amounts)


Years Ended March 31,2010
                    
                    
                    
                    2009*
                    
                    
                    
                    2008*
                    
                    
                    
                    2007*
                    
                    
                    2006Statement
      of Operations Data:Interest
      and fee income
                    
                    $
                    375,031
                    
                    
                    $
                    331,454
                    
                    
                    $
                    292,457
                    
                    
                    $
                    247,007
                    
                    
                    $
                    204,450Insurance
      commissions and other income
                    
                    
                    65,605
                    
                    
                    
                    60,698
                    
                    
                    
                    53,590
                    
                    
                    
                    45,311
                    
                    
                    
                    38,822Total
      revenues
                    
                    
                    440,636
                    
                    
                    
                    392,152
                    
                    
                    
                    346,047
                    
                    
                    
                    292,318
                    
                    
                    
                    243,272Provision
      for loan losses
                    
                    
                    90,299
                    
                    
                    
                    85,476
                    
                    
                    
                    67,542
                    
                    
                    
                    51,925
                    
                    
                    
                    46,026General
      and administrative expenses
                    
                    
                    217,012
                    
                    
                    
                    200,216
                    
                    
                    
                    179,218
                    
                    
                    
                    153,627
                    
                    
                    
                    128,514Interest
      expense
                    
                    
                    13,881
                    
                    
                    
                    14,886
                    
                    
                    
                    15,938
                    
                    
                    
                    11,696
                    
                    
                    
                    7,137Total
      expenses
                    
                    
                    321,192
                    
                    
                    
                    300,578
                    
                    
                    
                    262,698
                    
                    
                    
                    217,248
                    
                    
                    
                    181,677Income
      before income taxes
                    
                    
                    119,444
                    
                    
                    
                    91,574
                    
                    
                    
                    83,349
                    
                    
                    
                    75,070
                    
                    
                    
                    61,595Income
      taxes
                    
                    
                    45,783
                    
                    
                    
                    35,081
                    
                    
                    
                    33,096
                    
                    
                    
                    28,897
                    
                    
                    
                    23,080Net
      income
                    
                    $
                    73,661
                    
                    
                    $
                    56,493
                    
                    
                    $
                    50,253
                    
                    
                    $
                    46,173
                    
                    
                    $
                    38,515Net
      income per common share (diluted)
                    
                    $
                    4.45
                    
                    
                    $
                    3.43
                    
                    
                    $
                    2.89
                    
                    
                    $
                    2.51
                    
                    
                    $
                    2.02Diluted
      weighted average shares
                    
                    
                    16,546
                    
                    
                    
                    16,464
                    
                    
                    
                    17,375
                    
                    
                    
                    18,394
                    
                    
                    
                    19,098Balance
      Sheet Data (end of period):Loans
      receivable, net of unearned and deferred fees
                    
                    $
                    571,086
                    
                    
                    $
                    498,433
                    
                    
                    $
                    445,091
                    
                    
                    $
                    378,038
                    
                    
                    $
                    312,746Allowance
      for loan losses
                    
                    
                    (42,897
                    )
                    
                    
                    (38,021
                    )
                    
                    
                    (33,526
                    )
                    
                    
                    (27,840
                    )
                    
                    
                    (22,717
                    )Loans
      receivable, net
                    
                    
                    528,189
                    
                    
                    
                    460,412
                    
                    
                    
                    411,565
                    
                    
                    
                    350,198
                    
                    
                    
                    290,029Total
      assets
                    
                    
                    593,052
                    
                    
                    
                    526,094
                    
                    
                    
                    478,881
                    
                    
                    
                    402,026
                    
                    
                    
                    332,784Total
      debt
                    
                    
                    170,642
                    
                    
                    
                    197,042
                    
                    
                    
                    197,078
                    
                    
                    
                    148,840
                    
                    
                    
                    100,600Shareholders'
      equity
                    
                    
                    382,948
                    
                    
                    
                    296,335
                    
                    
                    
                    244,801
                    
                    
                    
                    228,731
                    
                    
                    
                    210,430Other
      Operating Data:As
      a percentage of average loans receivable:Provision
      for loan losses
                    
                    
                    16.3
                    %
                    
                    
                    17.6
                    %
                    
                    
                    15.8
                    %
                    
                    
                    14.5
                    %
                    
                    
                    15.4
                    %Net
      charge-offs
                    
                    
                    15.5
                    %
                    
                    
                    16.7
                    %
                    
                    
                    14.5
                    %
                    
                    
                    13.3
                    %
                    
                    
                    14.8
                    %Number
      of offices open at year-end
                    
                    
                    990
                    
                    
                    
                    944
                    
                    
                    
                    838
                    
                    
                    
                    732
                    
                    
                    
                    620







*
              Fiscal
      year 2007 through 2009 have been adjusted to reflect the adoption of ASC
      470-20.  See Note 2 to the Consolidated Financial
      Statements.




20





Item
7.  Management’s Discussion and Analysis of Financial Condition and
Results of Operations





General





The
Company's financial performance continues to be dependent in large part upon the
growth in its outstanding loans receivable, the ongoing introduction of new
products and services for marketing to its customer base, the maintenance of
loan quality and acceptable levels of operating expenses.  Since March
31, 2005, gross loans receivable have increased at a 16.9% annual compounded
rate from $352.0 million to $770.3 million at March 31, 2010.  The
increase reflects both the higher volume of loans generated through the
Company's existing offices and the contribution of loans generated from new
offices opened or acquired over the period.  During this same
five-year period, the Company has grown from 579 offices to 990 offices as of
March 31, 2010.  During fiscal 2011, the Company plans to open
approximately 55 new offices in the United States, 15 new offices in Mexico and
evaluate acquisition opportunities.





The
Company attempts to identify new products and services for marketing to its
customer base.  In addition to new insurance-related products, which
have been introduced in selected states over the last several years, the Company
sells and finances electronic items and appliances to its existing customer base
in many states where it operates.  This program is called the “World
Class Buying Club.”  Total loan volume under this program was $13.5
million during fiscal 2010, compared to $13.0 million in fiscal
2009.  World Class Buying Club represents less than 1% of the
Company’s total loan volume.





The
Company's ParaData Financial Systems subsidiary provides data processing systems
to 107 separate finance companies, including the Company, and currently supports
approximately 1,530 individual branch offices in 44 states and
Mexico.  ParaData’s revenue is highly dependent upon its ability to
attract new customers, which often requires substantial lead time, and as a
result its revenue may fluctuate from year to year.  Its net revenues
from system sales and support amounted to $1.8 million, $2.0 million and $2.2
million in fiscal 2010, 2009 and 2008, respectively.  ParaData’s net
revenue to the Company will continue to fluctuate on a year to year
basis.  ParaData continues to provide state-of-the-art data processing
support for the Company’s in-house integrated computer system at a substantially
reduced cost to the Company.





The
Company offers an income tax return preparation and electronic filing program
together with access to refund anticipation loans through an unaffiliated bank
in all but a few of its offices.  The Company prepared approximately
62,000, 61,000 and 65,000 returns in each of the fiscal years 2010, 2009 and
2008, respectively.  Net revenue generated by the Company from this
program during fiscal 2010, 2009 and 2008 amounted to approximately $10.9
million, $9.9 million and $9.7 million, respectively.  The Company
believes that this profitable business provides a beneficial service to its
existing customer base and plans to continue to promote and expand the program
in the future.


21





The
following table sets forth certain information derived from the Company's
consolidated statements of operations and balance sheets, as well as operating
data and ratios, for the periods indicated:





Years Ended March 31,2010
                              
                              
                              2009
                              
                              
                              2008(Dollars
      in thousands)Average
      gross loans receivable (1)
                              
                              $
                              750,504
                              
                              
                              
                              658,587
                              
                              
                              
                              576,050Average
      net loans receivable (2)
                              
                              
                              553,650
                              
                              
                              
                              486,776
                              
                              
                              
                              426,524Expenses
      as a percentage of total revenues:Provision
      for loan losses
                              
                              
                              20.5
                              %
                              
                              
                              21.8
                              %
                              
                              
                              19.5
                              %General
      and administrative
                              
                              
                              49.2
                              %
                              
                              
                              51.1
                              %
                              
                              
                              51.8
                              %Total
      interest expense
                              
                              
                              3.2
                              %
                              
                              
                              3.8
                              %
                              
                              
                              4.6
                              %Operating
      margin (3)
                              
                              
                              30.3
                              %
                              
                              
                              27.1
                              %
                              
                              
                              28.7
                              %Return
      on average assets
                              
                              
                              12.7
                              %
                              
                              
                              10.9
                              %
                              
                              
                              11.0
                              %Offices
      opened and acquired, net
                              
                              
                              46
                              
                              
                              
                              106
                              
                              
                              
                              106Total
      offices (at period end)
                              
                              
                              990
                              
                              
                              
                              944
                              
                              
                              
                              838





(1)
              Average
      gross loans receivable have been determined by averaging month-end gross
      loans receivable over the indicated
period.


(2)
              Average
      net loans receivable have been determined by averaging month-end gross
      loans receivable less unearned interest and deferred fees over the
      indicated period.


(3)
              Operating
      margin is computed as total revenues less provision for loan losses and
      general and administrative expenses as a percentage of total
      revenues.





As
described in Note 2 to the Consolidated Financial Statements included in Item 8
below in the first quarter of fiscal 2010, we adopted FASB ASC 470-20 (Prior
authoritative literature: FASB Staff Position No. APB 14-1, “Accounting for
Convertible Debt Instruments That May Be Settled in Cash upon Conversion
(Including Partial Cash Settlement)”), and applied it retrospectively to all
periods presented with a cumulative effect adjustment being made as of the
earliest period presented.  Adoption of FASB ASC 470-20 affected our
fiscal 2010, fiscal 2009 and fiscal 2008 consolidated statements of operations
and balance sheets as reported to the extent described in Note 2, Summary of
Significant Accounting Policies in Part II, Item 8 of this report.





Comparison
of Fiscal 2010 Versus Fiscal 2009





Net
income was $73.7 million during fiscal 2010, a 30.4% increase over the $56.5
million earned during fiscal 2009.  This increase resulted primarily
from an increase in operating income (revenues less provision for loan losses
and general and administrative expenses) of $26.9 million, or 25.2%, and a $1.0
million decrease in interest expense, offset by an increase in income tax
expense.





Total
revenues increased to $440.6 million in fiscal 2010, a $48.5 million, or 12.4%,
increase over the $392.2 million in fiscal 2009.   Revenues from
the 834 offices open throughout both fiscal years increased by
8.1%.  At March 31, 2010, the Company had 990 offices in operation, an
increase of 46 offices from March 31, 2009.





Interest
and fee income during fiscal 2010 increased by $43.6 million, or 13.1%, over
fiscal 2009.  This increase resulted from an increase of $66.9
million, or 13.7%, in average net loans receivable between the two fiscal
years.  The increase in average loans receivable was attributable to
the Company’s internal growth.  During fiscal 2010, internal growth
increased because the Company opened 48 new offices and the average loan balance
increased from $917 to $971.





Insurance
commissions and other income increased by $4.9 million, or 8.1%, over the two
fiscal years.  Insurance commissions increased by $4.8 million, or
14.7%, as a result of the increase in loan volume in states where credit
insurance is sold. Other income increased slightly, but there were various
changes within other income when comparing the two years,
including:


22





·
            Revenue
      from tax preparation increased approximately $1.0 million, or
      10%.


·
            In
      fiscal 2010, a $1.1 million gain on the interest rate swaps was recorded
      compared to an approximate $800,000 loss is fiscal
  2009.


·
            In
      fiscal 2010, the Company extinguished $18.0 million par value of its
      convertible notes at a $2.2 million gain, compared to fiscal 2009, during
      which $15.0 million par value of the convertible notes were extinguished
      at a $4.0 million gain.


·
            In
      fiscal 2009, a $1.5 million gain was recognized on the sale of a foreign
      currency option.  There was no such gain recorded during fiscal
      2010.





See Note
9 to the Consolidated Financial Statements for further discussion regarding this
extinguishment of debt.





The
provision for loan losses during fiscal 2010 increased by $4.8 million, or 5.6%,
from the previous year.  This increase resulted from a combination of
increases in both the allowance for loan losses and the amount of loans charged
off.  Net charge-offs for fiscal 2010 amounted to $85.6 million, a
5.6% increase over the $81.1 million charged off during fiscal 2009. Accounts
that were 61 days or more past due decreased from 2.7% to 2.4% on a recency
basis and from 4.2% to 3.8% on a contractual basis when comparing March 31, 2010
to March 31, 2009. During the current fiscal year, we have also had a reduction
in our year-over-year loan losses. Annualized net charge-offs as a percentage of
average net loans decreased from 16.7% during fiscal 2009 to 15.5% during fiscal
2010.  Although this represents a 120 basis point decrease, the current
year ratio is slightly higher than historical charge-off ratios. 
Historically from fiscal 2002 to fiscal 2006 the charge-offs as a percent of
average loans ranged from 14.6% to 14.8%. In fiscal 2007 the Company experienced
a temporary decline to 13.3%, which was attributed to a change in the bankruptcy
law.  However, in fiscal 2008 the ratio returned 14.5%, which was more in
line with historical rates.





Because
the ratio in fiscal 2010 is slightly higher than historical levels and we did
see improvements during fiscal 2010 compared to fiscal 2009, we believe that we
will continue to see slight improvement in our loss ratios in the near future,
however, there is no assurance they will return to historical levels anytime
soon.  During fiscal year 2010 our charge-offs as a percent of average
net loans decreased to 15.5% from 16.7% in fiscal 2009.  We believe
our customer base is highly impacted by the cost of basic commodities such as
food and energy and unemployment.  The cost of basic commodities rose
steeply during the first several months of our fiscal 2009 which had a negative
impact on our customer’s ability to repay outstanding loans.  This, in
turn, drove our charge-off ratio up significantly over our historical
experience.  After moderating in the second half of fiscal 2009, the
costs of basic commodities have risen more gradually during fiscal 2010 allowing
our customers to adapt to such costs increases and better manage their ability
to repay outstanding loans.  The rate of unemployment has also
stabilized.  We believe these are major factors in the reduction of
our charge-off ratio during fiscal 2010.





General
and administrative expenses during fiscal 2010 increased by $16.8 million, or
8.4%, over the previous fiscal year.  This increase was due primarily
to costs associated with the new offices opened or acquired during the fiscal
year.  General and administrative expenses, when divided by average
open offices, increased slightly when comparing the two fiscal years and,
overall, general and administrative expenses as a percent of total revenues
decreased from 51.1% in fiscal 2009 to 49.2% during fiscal 2010.  This
decrease resulted from the reduction of branch openings during fiscal 2010 and
management’s ongoing monitoring and control of expenses.  Management
plans to increase the number of branch openings in fiscal 2011 compared to
fiscal 2010; therefore, the Company may not experience similar reductions in
general and administrative expenses as a percent of total revenues in fiscal
2011.





Interest
expense decreased by $1.0 million, or 6.7%, during fiscal 2010, as compared to
the previous fiscal year as a result of a decrease in average debt outstanding
of 4.5% and a slight decrease in average interest rates.  Average
interest rates decreased from 6.7% in fiscal 2009 to 6.5% in fiscal
2010.





Income
tax expense increased $10.7 million, or 30.5%, primarily from an increase in
pre-tax income.  The effective rate remained consistent at 38.33% in
fiscal 2010 compared to 38.31% in fiscal 2009.


23





Comparison
of Fiscal 2009 Versus Fiscal 2008





Net
income was $56.5 million during fiscal 2009, a 12.4% increase over the $50.3
million earned during fiscal 2008.  This increase resulted primarily
from an increase in operating income (revenues less provision for loan losses
and general and administrative expenses) of $7.2 million, or 7.2%, a reduction
in the income tax effective rate and a reduction in interest
expense.





Total
revenues increased to $392.2 million in fiscal 2009, a $46.1 million, or 13.3%,
increase over the $346.0 million in fiscal 2008.   Revenues from
the 727 offices open throughout both fiscal years increased by
7.7%.  At March 31, 2009, the Company had 944 offices in operation, an
increase of 106 offices from March 31, 2008.





Interest
and fee income during fiscal 2009 increased by $39.0 million, or 13.3%, over
fiscal 2008.  This increase resulted from an increase of $60.3
million, or 14.1%, in average net loans receivable between the two fiscal
years.  The increase in average loans receivable was attributable to
the Company acquiring approximately $9.1 million in net loans and internal
growth.  During fiscal 2009, internal growth increased because the
Company opened 98 new offices and the average loan balance increased from $877
to $917.





Insurance
commissions and other income increased by $7.1 million, or 13.3%, over the two
fiscal years.  Insurance commissions increased by $2.0 million, or
6.7%, as a result of the increase in loan volume in states where credit
insurance is sold.  Other income increased by $5.1 million, or 21.9%,
over the two years, primarily due to a $1.5 million gain on the sale of a
foreign currency option and a $4.0 million gain on the extinguishment of $15
million par value of the Convertible Notes.  See Note 9 to the
Consolidated Financial Statements for further discussion regarding this
extinguishment of debt.  This increase was partially offset by
approximately a $0.8 million loss related to our interest rate
swap.





The
provision for loan losses during fiscal 2009 increased by $17.9 million, or
26.6%, from the previous year.  This increase resulted from a
combination of increases in both the allowance for loan losses and the amount of
loans charged off.  Net charge-offs for fiscal 2009 amounted to $81.1
million, a 30.9% increase over the $62.0 million charged off during fiscal 2008.
Net charge-offs as a percentage of average loans increased from 14.5% to 16.7%
when comparing the two annual periods.  We believe the 2.2 percentage
point increase resulted from the difficult economic environment and higher
energy cost that our customers faced.  Accounts that were 61 days or
more past due on a recency basis increased from 2.6% to 2.7% and on a
contractual basis increased from 4.0% to 4.2% at March 31, 2008 and March 31,
2009, respectively.





General
and administrative expenses during fiscal 2009 increased by $21.0 million, or
11.7%, over the previous fiscal year.  This increase was due primarily
to costs associated with the new offices opened or acquired during the fiscal
year.  General and administrative expenses, when divided by average
open offices, remained flat when comparing the two fiscal years and, overall,
general and administrative expenses as a percent of total revenues decreased
from 51.8% in fiscal 2008 to 51.1% during fiscal 2009.  This decrease
resulted from management’s ongoing monitoring and control of
expenses.





Interest
expense decreased by $1.1 million, or 6.6%, during fiscal 2009, as compared to
the previous fiscal year as a result of a decrease in interest rates, partially
offset by an increase in average debt outstanding of 12.1%.  Average
interest rates decreased from 8.3% in fiscal 2008 to 6.7% in fiscal
2009.





Income
tax expense increased $2.0 million, or 6.0%, primarily from an increase in
pre-tax income.  The decrease in the effective rate from 39.7% to
38.3% was a result of the prior year tax examination discussed in Note 14 to our
Consolidated Financial Statements.





Critical
Accounting Policies





The
Company’s accounting and reporting policies are in accordance with U.S.
generally accepted accounting principles and conform to general practices within
the finance company industry.  The significant accounting policies
used in the preparation of the consolidated financial statements are discussed
in Note 1 to the consolidated financial statements.  Certain critical
accounting policies involve significant judgment by the Company’s management,
including the use of estimates and assumptions which affect the reported amounts
of assets, liabilities, revenues, and expenses.  As a result, changes
in these estimates and assumptions could significantly affect the Company’s
financial position and results of operations.  The Company considers
its policies regarding the allowance for loan losses and share-based
compensation to be its most critical accounting policies due to the significant
degree of management judgment involved.


24





Allowance
for Loan Losses





The
Company has developed policies and procedures for assessing the adequacy of the
allowance for loan losses that take into consideration various assumptions and
estimates with respect to the loan portfolio.   The Company’s
assumptions and estimates may be affected in the future by changes in economic
conditions, among other factors.  For additional discussion concerning
the allowance for loan losses, see “Credit Quality” below.





Share-Based
Compensation





The
Company measures compensation cost for share-based awards at fair value and
recognizes compensation over the service period for awards expected to vest. The
fair value of restricted stock is based on the number of shares granted and the
quoted price of our common stock, and the fair value of stock options is
determined using the Black-Scholes valuation model. The Black-Scholes model
requires the input of highly subjective assumptions, including expected
volatility, risk-free interest rate and expected life, changes to which can
materially affect the fair value estimate. In addition, the estimation of
share-based awards that will ultimately vest requires judgment, and to the
extent actual results or updated estimates differ from our current estimates,
such amounts will be recorded as a cumulative adjustment in the period that the
estimates are revised. The Company considers many factors when estimating
expected forfeitures, including types of awards, employee class, and historical
experience. Actual results, and future changes in estimates, may differ
substantially from our current estimates.





Income
Taxes





Management
uses certain assumptions and estimates in determining income taxes payable or
refundable, deferred income tax liabilities and assets for events recognized
differently in its financial statements and income tax returns, and income tax
expense. Determining these amounts requires analysis of certain transactions and
interpretation of tax laws and regulations. Management exercises considerable
judgment in evaluating the amount and timing of recognition of the resulting
income tax liabilities and assets. These judgments and estimates are
re-evaluated on a periodic basis as regulatory and business factors
change.





No
assurance can be given that either the tax returns submitted by management or
the income tax reported on the Consolidated Financial Statements will not be
adjusted by either adverse rulings by the U.S. Tax Court, changes in the
tax code, or assessments made by the Internal Revenue Service (“IRS”) or state
taxing authorities. The Company is subject to potential adverse adjustments,
including but not limited to: an increase in the statutory federal or state
income tax rates, the permanent non-deductibility of amounts currently
considered deductible either now or in future periods, and the dependency on the
generation of future taxable income, including capital gains, in order to
ultimately realize deferred income tax assets.





The
Company adopted FASB ASC 740 (Prior authoritative literature: FASB
Interpretation No. 48, “Accounting for Uncertainty in Income
Taxes”) on April 1, 2007. Under FASB ASC 740, the Company includes
the current and deferred tax impact of its tax positions in the financial
statements when it is more likely than not (likelihood of greater than 50%) that
such positions will be sustained by taxing authorities, with full knowledge of
relevant information, based on the technical merits of the tax position. While
the Company supports its tax positions by unambiguous tax law, prior experience
with the taxing authority, and analysis that considers all relevant facts,
circumstances and regulations, management must still rely on assumptions and
estimates to determine the overall likelihood of success and proper
quantification of a given tax position.





Credit
Quality





The
Company’s delinquency and net charge-off ratios 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.





Delinquency
is computed on the basis of the date of the last full contractual payment on a
loan (known as the recency method) and on the basis of the amount past due in
accordance with original payment terms of a loan (known as the contractual
method).  Management closely monitors portfolio delinquency using both
methods to measure the quality of the Company's loan portfolio and the
probability of credit losses.


25





The
following table classifies the gross loans receivable of the Company that were
delinquent on a recency and contractual basis for at least 61 days at March 31,
2010, 2009, and 2008:





At March 31,2010
                      
                      
                      2009
                      
                      
                      2008(Dollars
      in thousands)Recency
      basis:61-90
      days past due
                      
                      $
                      11,094
                      
                      
                      
                      11,304
                      
                      
                      
                      10,41491
      days or more past due
                      
                      
                      7,337
                      
                      
                      
                      6,661
                      
                      
                      
                      5,003Total
                      
                      $
                      18,431
                      
                      
                      
                      17,965
                      
                      
                      
                      15,417Percentage
      of period-end gross loans receivable
                      
                      
                      2.4
                      %
                      
                      
                      2.7
                      %
                      
                      
                      2.6
                      %Contractual
      basis:61-90
      days past due
                      
                      $
                      14,548
                      
                      
                      
                      14,223
                      
                      
                      
                      12,83891
      days or more past due
                      
                      
                      14,985
                      
                      
                      
                      13,673
                      
                      
                      
                      11,123Total
                      
                      $
                      29,533
                      
                      
                      
                      27,896
                      
                      
                      
                      23,961Percentage
      of period-end gross loans receivable
                      
                      
                      3.8
                      %
                      
                      
                      4.2
                      %
                      
                      
                      4.0
                      %





Loans are
charged off at the earlier of when such loans are deemed to be uncollectible or
when six months have elapsed since the date of the last full contractual
payment.  The Company’s charge-off policy has been consistently
applied and no significant changes have been made to the policy during the
periods reported. Management considers the charge-off policy when evaluating the
appropriateness of the allowance for loan losses.  Charge-offs as a
percent of average net loans decreased from 16.7% in fiscal 2009 to 15.5% in
fiscal 2010.





In fiscal
2010, approximately 84.7% of the Company’s loans were generated through
refinancings of outstanding loans and the origination of new loans to previous
customers.  A refinancing represents a new loan transaction with a
present customer in which a portion of the new loan proceeds is used to repay
the balance of an existing loan and the remaining portion is advanced to the
customer.  For fiscal 2010, 2009, and 2008, the percentages of the
Company’s loan originations that were refinancings of existing loans were 76.4%,
75.0% and 73.3%, respectively.  The Company’s refinancing policies,
while limited by state regulations, in all cases consider the customer’s payment
history and require that the customer has made at least two payments on the loan
being considered for refinancing.  A refinancing is considered a
current refinancing if the customer is no more than 45 days delinquent on a
contractual basis.  Delinquent refinancings may be extended to
customers that are more than 45 days past due on a contractual basis if the
customer completes a new application and the manager believes that the
customer’s ability and intent to repay has improved.  It is the
Company’s policy to not refinance delinquent loans in amounts greater than the
original amounts financed.  In all cases, a customer must complete a
new application every two years.  During fiscal 2010, delinquent
refinancings represented less than 2% of the Company’s total loan volume
compared to 2.1% in fiscal 2009.





Charge-offs,
as a percentage of loans made by category, are greatest on loans made to new
borrowers and less on loans made to former borrowers and
refinancings.  This is as expected due to the payment history
experience available on repeat borrowers.  However, as a percentage of
total loans charged off, refinancings represent the greatest percentage due to
the volume of loans made in this category.  The following table
depicts the charge-offs as a percent of loans made by category and as a percent
of total charge-offs during fiscal 2010:





Loan
      Volume
                    
                    
                    Percent
      of
                    
                    
                    Charge-off
      as a Percent of Totalby Category
                    
                    
                    Total Charge-offs
                    
                    
                    Loans Made by CategoryRefinancing
                    
                    
                    76.4
                    %
                    
                    
                    76.1
                    %
                    
                    
                    5.0
                    %Former
      borrowers
                    
                    
                    8.3
                    %
                    
                    
                    5.2
                    %
                    
                    
                    3.7
                    %New
      borrowers
                    
                    
                    15.3
                    %
                    
                    
                    18.7
                    %
                    
                    
                    9.9
                    %100.0
                    %
                    
                    
                    100.0
                    %




26





The
Company maintains an allowance for loan losses in an amount that, in
management’s opinion, is adequate to cover losses inherent in the existing loan
portfolio.  The Company charges against current earnings, as a
provision for loan losses, amounts added to the allowance to maintain it at
levels expected to cover probable losses of principal.  When
establishing the allowance for loan losses, the Company takes into consideration
the growth of the loan portfolio, the mix of the loan portfolio, current levels
of charge-offs, current levels of delinquencies, and current economic
factors.  In accordance with FASB ASC Topic 450 (Prior authoritative
literature: Statement of Accounting Standards No. 5 “Accounting for
Contingencies”), the Company accrues an estimated loss if it is probable and can
be reasonably estimated.  It is probable that there are losses in the
existing portfolio.  To estimate the losses, the Company uses
historical information for net charge-offs and average loan
life.  This method is based on the fact that many customers refinance
their loans prior to the contractual maturity.  Average contractual
loan terms are approximately nine months and the average loan life is
approximately four months.  Based on this method, the Company had an
allowance for loan losses that approximated six months of average net
charge-offs at March 31, 2010, 2009, and 2008. Therefore, at each year end the
Company had an allowance for loan losses that covered estimated losses for its
existing loans based on historical charge-offs and average lives.  In
addition, the entire loan portfolio turns over approximately three times during
a typical twelve-month period.  Therefore, a large percentage of loans
that are charged off during any fiscal year are not on the Company’s books at
the beginning of the fiscal year.  The Company believes that it is not
appropriate to provide for losses on loans that have not been originated, that
twelve months of net charge-offs are not needed in the allowance, and that the
method employed is in accordance with generally accepted accounting
principles.





The
Company records acquired loans at fair value based on current interest rates,
less an allowance for uncollectibility and collection costs.





FASB ASC
Topic 310 (Prior authoritative literature: Statement of Position No. 03-3,
“Accounting for Certain Loans or Debt Securities Acquired in a Transfer,”) was
adopted by the Company on April 1, 2005.  FASB ASC Topic 310 prohibits
carryover or creation of valuation allowances in the initial accounting of all
loans acquired in a transfer that are within the scope of the accounting
literature.  Management believes that a loan has shown deterioration
if it is over 60 days delinquent.  The Company believes that loans
acquired since the adoption of FASB ASC Topic 310 have not shown evidence of
deterioration of credit quality since origination, and therefore, are not within
the scope of FASB ASC Topic 310 because there is no consideration paid for
acquired loans over 60 days delinquent.  For the years ended March 31,
2009 and 2008, the Company recorded adjustments of approximately $0.5 million
and $0.1 million, respectively, to the allowance for loan losses in connection
with acquisitions in accordance generally accepted accounting
principles.  No adjustment was recorded for the year ended March 31,
2010.  These adjustments represent the allowance for loan losses on
acquired loans which are not within the scope of FASB ASC Topic
310.  The
Company believes that its allowance for loan losses is adequate to cover losses
in the existing portfolio at March 31, 2010.





The
following is a summary of the changes in the allowance for loan losses for the
years ended March 31, 2010, 2009, and 2008:





March
      31,2010
                        
                        
                        2009
                        
                        
                        2008Balance
      at the beginning of the year
                        
                        $
                        38,020,770
                        
                        
                        
                        33,526,147
                        
                        
                        
                        27,840,239Provision
      for loan losses
                        
                        
                        90,298,934
                        
                        
                        
                        85,476,092
                        
                        
                        
                        67,541,805Loan
      losses
                        
                        
                        (94,782,185
                        )
                        
                        
                        (88,728,498
                        )
                        
                        
                        (68,985,269
                        )Recoveries
                        
                        
                        9,139,923
                        
                        
                        
                        7,590,928
                        
                        
                        
                        6,989,297Translation
      adjustment
                        
                        
                        219,377
                        
                        
                        
                        (306,340
                        )
                        
                        
                        18,135Allowance
      on acquired loans
                        
                        
                        -
                        
                        
                        
                        462,441
                        
                        
                        
                        121,940Balance
      at the end of the year––
                        
                        $
                        42,896,819
                        
                        
                        
                        38,020,770
                        
                        
                        
                        33,526,147Allowance
      as a percentage of loans receivable, net of unearned and deferred
      fees
                        
                        
                        7.5
                        %
                        
                        
                        7.6
                        %
                        
                        
                        7.5
                        %Net
      charge-offs as a percentage of average loans receivable (1)
                        
                        
                        15.5
                        %
                        
                        
                        16.7
                        %
                        
                        
                        14.5
                        %







(1)
            Average
      loans receivable have been determined by averaging month-end gross loans
      receivable less unearned interest and deferred fees over the indicated
      period.


27





Quarterly
Information and Seasonality





The
Company's loan volume and corresponding loans receivable follow seasonal
trends.  The Company's highest loan demand typically occurs from
October through December, its third fiscal quarter.  Loan demand has
generally been the lowest and loan repayment highest from January to March, its
fourth fiscal quarter.  Loan volume and average balances typically
remain relatively level during the remainder of the year.  This
seasonal trend affects quarterly operating performance through corresponding
fluctuations in interest and fee income and insurance commissions earned and the
provision for loan losses recorded, as well as fluctuations in the Company's
cash needs.  Consequently, operating results for the Company's third
fiscal quarter generally are significantly lower than in other quarters and
operating results for its fourth fiscal quarter are significantly higher than in
other quarters.





The
following table sets forth, on a quarterly basis, certain items included in the
Company's unaudited consolidated financial statements and shows the number of
offices open during fiscal years 2010 and 2009.





At
      or for the Three Months Ended2010
                                                              
                                                              
                                                              2009June
                                                              
                                                              
                                                              September
                                                              
                                                              
                                                              December
                                                              
                                                              
                                                              March
                                                              
                                                              
                                                              June
                                                              
                                                              
                                                              September
                                                              
                                                              
                                                              December
                                                              
                                                              
                                                              March30,
                                                              
                                                              
                                                              30,
                                                              
                                                              
                                                              31,
                                                              
                                                              
                                                              31,
                                                              
                                                              
                                                              30,
                                                              
                                                              
                                                              30,
                                                              
                                                              
                                                              31,
                                                              
                                                              
                                                              31,(Dollars
      in thousands)Total
      revenues
                                                              
                                                              $
                                                              100,230
                                                              
                                                              
                                                              
                                                              104,206
                                                              
                                                              
                                                              
                                                              112,310
                                                              
                                                              
                                                              
                                                              123,890
                                                              
                                                              
                                                              
                                                              88,421
                                                              
                                                              
                                                              
                                                              91,721
                                                              
                                                              
                                                              
                                                              99,161
                                                              
                                                              
                                                              
                                                              112,849Provision
      for loan losses
                                                              
                                                              
                                                              20,428
                                                              
                                                              
                                                              
                                                              25,156
                                                              
                                                              
                                                              
                                                              29,633
                                                              
                                                              
                                                              
                                                              15,082
                                                              
                                                              
                                                              
                                                              17,857
                                                              
                                                              
                                                              
                                                              23,307
                                                              
                                                              
                                                              
                                                              29,490
                                                              
                                                              
                                                              
                                                              14,822General
      and administrative expenses
                                                              
                                                              
                                                              53,333
                                                              
                                                              
                                                              
                                                              51,755
                                                              
                                                              
                                                              
                                                              55,537
                                                              
                                                              
                                                              
                                                              56,387
                                                              
                                                              
                                                              
                                                              48,790
                                                              
                                                              
                                                              
                                                              48,379
                                                              
                                                              
                                                              
                                                              51,716
                                                              
                                                              
                                                              
                                                              51,331Net
      income
                                                              
                                                              
                                                              14,635
                                                              
                                                              
                                                              
                                                              14,612
                                                              
                                                              
                                                              
                                                              14,751
                                                              
                                                              
                                                              
                                                              29,663
                                                              
                                                              
                                                              
                                                              11,343
                                                              
                                                              
                                                              
                                                              9,946
                                                              
                                                              
                                                              
                                                              8,863
                                                              
                                                              
                                                              
                                                              26,341Gross
      loans receivable
                                                              
                                                              $
                                                              726,057
                                                              
                                                              
                                                              
                                                              754,854
                                                              
                                                              
                                                              
                                                              838,864
                                                              
                                                              
                                                              
                                                              770,265
                                                              
                                                              
                                                              
                                                              632,715
                                                              
                                                              
                                                              
                                                              667,179
                                                              
                                                              
                                                              
                                                              736,234
                                                              
                                                              
                                                              
                                                              671,176Number
      of offices open
                                                              
                                                              
                                                              949
                                                              
                                                              
                                                              
                                                              966
                                                              
                                                              
                                                              
                                                              975
                                                              
                                                              
                                                              
                                                              990
                                                              
                                                              
                                                              
                                                              872
                                                              
                                                              
                                                              
                                                              907
                                                              
                                                              
                                                              
                                                              923
                                                              
                                                              
                                                              
                                                              944





Recently
Issued Accounting Pronouncements





See “Item 8.  Financial Statements and Supplementary
Data. Note 1. Summary of Significant Accounting Policies,” of the Consolidated
Financial Statements for the impact of new accounting
pronouncements.





Liquidity
and Capital Resources





The
Company has financed and continues to finance its operations, acquisitions and
office expansion through a combination of cash flows from operations and
borrowings from its institutional lenders.  The Company has generally
applied its cash flows from operations to fund its increasing loan volume, fund
acquisitions, repay long-term indebtedness, and repurchase its common
stock.  As the Company's gross loans receivable increased from $310.1
million at March 31, 2004 to $770.3 million at March 31, 2010, net cash provided
by operating activities for fiscal years 2010, 2009 and 2008 was $183.6 million,
$153.9 million and $136.0 million, respectively.





The Company's primary
ongoing cash requirements relate to the funding of new offices and acquisitions,
the overall growth of loans outstanding, the repayment or repurchase of
long-term indebtedness and the repurchase of its common stock.  As of
March 31, 2010, approximately 6.5 million shares have been repurchased since
2000 for an aggregate purchase price of approximately $151.1 million. During
fiscal 2010 the Company repurchased 38,500shares for $1.4
million.  In May 2009, the Board of
Directors authorized the Company to repurchase $15 million of the Company’s
stock.Subsequent to the end of fiscal 2010, on May 11, 2010,
the Board of Directors authorized an additional increase of $20 million in the
Company’s share repurchase program.  Through June 8, 2010, the Company
repurchased shares of its common stock for approximately $27.4
million.  See Note 1 – Subsequent Events to the Consolidated Financial
Statements.  During fiscal 2010 and 2009, the Company repurchased
$18.0 million and $15.0 million par value of its Convertible Senior Subordinated
notes payable, respectively.  The Company believes stock repurchases
and debt repurchases to be a viable component of the Company’s long-term
financial strategy and an excellent use of excess cash when the opportunity
arises.  In addition, the Company plans to open approximately 55
branches in the United States, 15 branches in Mexico, and evaluate acquisition
opportunities in fiscal 2011.  Expenditures by the Company to open and
furnish new offices generally averaged approximately $25,000 per office during
fiscal 2010.  New offices have also required from $100,000 to $400,000
to fund outstanding loans receivable originated during their first 12 months of
operation.


28





The
Company acquired a net of one office and a number of loan portfolios from
competitors in six states in nine separate transactions during fiscal 2010.
Gross loans receivable purchased in these transactions were approximately $3.9
million in the aggregate at the dates of purchase.  The Company
believes that attractive opportunities to acquire new offices or receivables
from its competitors or to acquire offices in communities not currently served
by the Company will continue to become available as conditions in local
economies and the financial circumstances of owners change.





The
Company has a $238.3 million base credit facility with a syndicate of
banks.  The credit facility will expire on July 31,
2011.  Funds borrowed under the revolving credit facility bear
interest, at the Company's option, at either the agent bank's prime rate per
annum or the LIBOR rate plus 3.0% per annum with a minimum 4.0% interest
rate.  At March 31, 2010, the interest rate on borrowings under the
revolving credit facility was 4.25%.   The Company pays a
commitment fee equal to 0.375% per annum of the daily unused portion of the
revolving credit facility.  Amounts outstanding under the revolving
credit facility may not exceed specified percentages of eligible loans
receivable.  On March 31, 2010, $99.2 million was outstanding under
this facility, and there was $139.1 million of unused borrowing availability
under the borrowing base limitations.





The
Company's credit agreements contain a number of financial covenants including
minimum net worth and fixed charge coverage requirements.  The credit
agreements also contain certain other covenants, including covenants that impose
limitations on the Company with respect to (i) declaring or paying dividends or
making distributions on or acquiring common or preferred stock or warrants or
options; (ii) redeeming or purchasing or prepaying principal or interest on
subordinated debt; (iii) incurring additional indebtedness; and (iv) entering
into a merger, consolidation or sale of substantial assets or
subsidiaries.  The Company was in compliance with these agreements at
March 31, 2010 and does not believe that these agreements will materially limit
its business and expansion strategy.





On
October 2, 2006, the Company amended its senior credit facility in connection
with the issuance of $110 million in aggregate principal amount of its 3%
convertible senior subordinated notes due October 1, 2011.  See Note 8
to the Consolidated Financial Statements included in this report for more
information regarding this transaction.





The
following table summarizes the Company’s contractual cash obligations by period
(in thousands):





Fiscal
      Year Ended March 31,2011
                          
                          
                          2012
                          
                          
                          2013
                          
                          
                          2014
                          
                          
                          2015
                          
                          
                          Thereafter
                          
                          
                          TotalConvertible
      Senior Subordinated Notes Payable
                          
                          $
                          -
                          
                          
                          $
                          77,000
                          
                          
                          $
                          -
                          
                          
                          $
                          -
                          
                          
                          $
                          -
                          
                          
                          $
                          -
                          
                          
                          $
                          77,000Maturities
      of Notes Payable
                          
                          
                          -
                          
                          
                          
                          99,150
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          99,150Interest
      Payments on Convertible Senior Subordinated Notes Payable
                          
                          
                          2,310
                          
                          
                          
                          2,310
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          4,620Interest
      Payments on Notes Payable
                          
                          
                          4,214
                          
                          
                          
                          1,405
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          5,619Minimum
      Lease Payments
                          
                          
                          14,882
                          
                          
                          
                          9,866
                          
                          
                          
                          4,670
                          
                          
                          
                          657
                          
                          
                          
                          139
                          
                          
                          
                          -
                          
                          
                          
                          30,214Total
                          
                          $
                          21,406
                          
                          
                          $
                          189,731
                          
                          
                          $
                          4,670
                          
                          
                          $
                          657
                          
                          
                          $
                          139
                          
                          
                          $
                          -
                          
                          
                          $
                          216,603




29


As of
March 31, 2010, the Company’s contractual obligations relating to FASB ASC 740
included unrecognized tax benefits of $2.6 million which are expected to be
settled in greater than one year.  While the settlement of the
obligation is expected to be in excess of one year, the precise timing of the
settlement is indeterminable.





The
Company believes that cash flow from operations and borrowings under its
revolving credit facility will be adequate for the next twelve months, and for
the foreseeable future thereafter, to fund the expected cost of opening or
acquiring new offices, including funding initial operating losses of new offices
and funding loans receivable originated by those offices and the Company's other
offices.  Except as otherwise discussed in this report, including in
Part 1, Item 1A, “Risk Factors,” management is not currently aware of any
trends, demands, commitments, events or uncertainties that it believes will or
could result in, or are or could be reasonably likely to result in, the
Company’s liquidity increasing or decreasing in any material
way.  From time to time, the Company has needed and obtained, and
expects that it will continue to need on a recurring basis, an increase in the
borrowing limits under its revolving credit facility.  The Company has
successfully obtained such increases in the past and anticipates that it will be
able to do so in the future as the need arises; however, there can be no
assurance that this additional funding will be available (or available on
reasonable terms) if and when needed. See Part I, Item 1A, “Risk Factors,” for a
further discussion of risks and contingencies that could affect our business,
financial condition and liquidity.





Quantitative
and Qualitative Disclosures About Market Risk





Interest
Rate Risk





As of
March 31, 2010, the Company’s financial instruments consist of the
following:  cash and cash equivalents, loans receivable, senior notes
payable, convertible senior subordinated notes payable, and interest rate
swaps.  Fair value approximates carrying value for all of these
instruments, except the convertible senior subordinated notes payable, for which
the fair value of $73.4 million represents the quoted market price. Loans
receivable are originated at prevailing market rates and have an average life of
approximately four months.  Given the short-term nature of these
loans, they are continually repriced at current market
rates.   The Company’s outstanding debt under its revolving
credit facility was $99.2 million at March 31, 2010.  Interest on
borrowings under this facility is based, at the Company’s option, on the prime
rate or LIBOR plus 3.0%, with a minimum rate of 4.0%.





Based on
the outstanding balance at March 31, 2010, a change of 1% in the LIBOR interest
rate would cause a change in interest expense of approximately $200,000 on an
annual basis.





In
October 2005, the Company entered into an interest rate swap to economically
hedge the variable cash flows associated with $30 million of its LIBOR-based
borrowings.  This swap converted the $30 million from a variable rate
of one-month LIBOR to a fixed rate of 4.755% for a period of five
years.  In December 2008, the Company entered into a $20 million
interest rate swap to convert a variable rate of one month LIBOR to a fixed rate
of 2.4%.  In accordance with FASB ASC Topic 815-10-15 (Prior
authoritative literature:  SFAS 133), the Company records derivatives
at fair value, as other assets or liabilities, on the consolidated balance
sheets.  Since the Company is not utilizing hedge accounting under
FASB ASC Topic 815-10-15, changes in the fair value of the derivative instrument
are included in other income.  As of March 31, 2010 the fair value of
the interest rate swaps was a liability of $1.3 million and included in other
liabilities.  The change in fair value from the beginning of the year,
recorded as an unrealized gain in other income, was approximately $1.1
million.





On
October 10, 2006, the Company issued $110 million convertible senior
subordinated notes due October 1, 2011 (the “Convertible Notes”) to qualified
institutional brokers in accordance with Rule 144A of the Securities Act of
1933.  The coupon rate on the Convertible Notes is fixed at 3% and is
payable semi-annually in arrears on April 1 and October 1 of each year,
commencing April 1, 2007.  During fiscal 2009 and fiscal 2010, the
company repurchased and cancelled $15.0 million and $18.0 million, respectively,
of the convertible senior subordinated notes.  See Note 8 to the
Consolidated Financial Statements for more information regarding these
repurchases.





Foreign
Currency Exchange Rate Risk




In
September 2005 the Company began opening offices in Mexico, where local
businesses utilize the Mexican peso as their functional currency.  The
consolidated financial statements of the Company are denominated in U.S. dollars
and are therefore subject to fluctuation as the U.S. dollar and Mexican peso
foreign exchange rate changes.  International revenues were
approximately 4.1% of total revenues for the year ended March 31, 2010 and net
loans denominated in Mexican pesos were approximately $21.3 million (USD) at
March 31, 2010.


30




The
Company’s foreign currency exchange rate exposures may change over time as
business practices evolve and could have a material effect on its financial
results.  There have been, and there may continue to be, period-to-period
fluctuations in the relative portions of Mexican revenues.





Because
earnings are affected by fluctuations in the value of the U.S. dollar against
foreign currencies, an analysis was performed assuming a hypothetical 10%
increase or decrease in the value of the U.S. dollar relative to the Mexican
peso in which the Company’s transactions in Mexico are
denominated.   At March 31, 2010, the analysis indicated that
such market movements would not have had a material effect on the consolidated
financial statements.  The actual effects on the consolidated
financial statements in the future may differ materially from results of the
analysis for the year ended March 31, 2010.  The Company will continue
to monitor and assess the effect of currency fluctuations and may institute
further hedging alternatives.





Inflation





The
Company does not believe that inflation, within reasonably anticipated rates,
will have a material adverse effect on its financial condition.  Although
inflation would increase the Company’s operating costs in absolute terms, the
Company expects that the same decrease in the value of money would result in an
increase in the size of loans demanded by its customer base.  It is
reasonable to anticipate that such a change in customer preference would result
in an increase in total loan receivables and an increase in absolute revenues to
be generated from that larger amount of loans receivable.  That increase in
absolute revenues should offset any increase in operating costs.  In
addition, because the Company’s loans are relatively short in both contractual
term and average life, it is unlikely that loans made at any given point in time
will be repaid with significantly inflated dollars.





Legal
Matters





As of
March 31, 2010, the Company and certain of its subsidiaries have been named as
defendants in various legal actions arising from their normal business
activities in which damages in various amounts are claimed.  Although
the amount of any ultimate liability with respect to such matters cannot be
determined, the Company believes that any such liability will not have a
material adverse effect on the Company’s consolidated financial condition or
results of operations taken as a whole.





Item 7A.  Quantitative and Qualitative Disclosures About
Market Risk





“Management’s
Discussion and Analysis of Financial Condition and Results of Operations –
Quantitative and Qualitative Disclosures about Market Risk” of this report is
incorporated by reference in response to this Item 7A.


31





Part
II


Item
8.  Financial Statements and Supplementary Data





CONSOLIDATED
BALANCE SHEETS


March 31,2010
                        
                        
                        2009(As
      adjusted - Note 2)AssetsCash
      and cash equivalents
                        
                        $
                        5,445,168
                        
                        
                        
                        6,260,410Gross
      loans receivable
                        
                        
                        770,265,207
                        
                        
                        
                        671,175,985Less:Unearned
      interest and deferred fees
                        
                        
                        (199,179,293
                        )
                        
                        
                        (172,743,440
                        )Allowance
      for loan losses
                        
                        
                        (42,896,819
                        )
                        
                        
                        (38,020,770
                        )Loans
      receivable, net
                        
                        
                        528,189,095
                        
                        
                        
                        460,411,775Property
      and equipment, net
                        
                        
                        22,985,830
                        
                        
                        
                        23,060,360Deferred
      income taxes
                        
                        
                        11,642,590
                        
                        
                        
                        12,250,834Other
      assets, net
                        
                        
                        11,559,684
                        
                        
                        
                        9,541,757Goodwill
                        
                        
                        5,616,380
                        
                        
                        
                        5,580,946Intangible
      assets, net
                        
                        
                        7,613,518
                        
                        
                        
                        8,987,551$
                        593,052,265
                        
                        
                        
                        526,093,633Liabilities
      and Shareholders' EquityLiabilities:Senior
      notes payable
                        
                        
                        99,150,000
                        
                        
                        
                        113,310,000Convertible
      senior subordinated notes payable
                        
                        
                        77,000,000
                        
                        
                        
                        95,000,000Discount
      on convertible senior subordinated notes payable
                        
                        
                        (5,507,959
                        )
                        
                        
                        (11,268,462
                        )Income
      taxes payable
                        
                        
                        14,043,486
                        
                        
                        
                        11,412,722Accounts
      payable and accrued expenses
                        
                        
                        25,418,784
                        
                        
                        
                        21,304,466Total
      liabilities
                        
                        
                        210,104,311
                        
                        
                        
                        229,758,726Shareholders'
      equity:Preferred
      stock, no par valueAuthorized
      5,000,000 shares, no shares issued or outstanding
                        
                        
                        -
                        
                        
                        
                        -Common
      stock, no par valueAuthorized
      95,000,000 shares; issued and outstanding 16,521,553and
      16,211,659 shares at March 31, 2010 and 2009, respectively
                        
                        
                        -
                        
                        
                        
                        -Additional
      paid-in capital
                        
                        
                        27,112,822
                        
                        
                        
                        17,046,310Retained
      earnings
                        
                        
                        357,179,568
                        
                        
                        
                        283,518,260Accumulated
      other comprehensive loss, net of tax
                        
                        
                        (1,344,436
                        )
                        
                        
                        (4,229,663
                        )Total
      shareholders' equity
                        
                        
                        382,947,954
                        
                        
                        
                        296,334,907Commitments
      and contingencies$
                        593,052,265
                        
                        
                        
                        526,093,633





See
accompanying notes to consolidated financial statements.


32





CONSOLIDATED
STATEMENTS OF OPERATIONS





Years Ended March 31,2010
                
                
                2009
                
                
                2008(As adjusted - Note 2)Revenues:Interest
      and fee income
                
                $
                375,030,993
                
                
                
                331,453,835
                
                
                
                292,457,259Insurance
      commissions and other income
                
                
                65,605,147
                
                
                
                60,698,020
                
                
                
                53,589,596Total
      revenues
                
                
                440,636,140
                
                
                
                392,151,855
                
                
                
                346,046,855Expenses:Provision
      for loan losses
                
                
                90,298,934
                
                
                
                85,476,092
                
                
                
                67,541,805General
      and administrative expenses:Personnel
                
                
                142,482,669
                
                
                
                130,674,094
                
                
                
                119,483,185Occupancy
      and equipment
                
                
                28,468,673
                
                
                
                25,577,437
                
                
                
                21,554,655Data
      processing
                
                
                1,925,114
                
                
                
                2,307,172
                
                
                
                2,112,399Advertising
                
                
                12,842,759
                
                
                
                13,067,079
                
                
                
                12,647,576Amortization
      of intangible assets
                
                
                2,242,517
                
                
                
                2,454,872
                
                
                
                2,505,465Other
                
                
                29,050,275
                
                
                
                26,136,095
                
                
                
                20,915,465217,012,007
                
                
                
                200,216,749
                
                
                
                179,218,745Interest
      expense
                
                
                13,881,224
                
                
                
                14,885,634
                
                
                
                15,937,660Total
      expenses
                
                
                321,192,165
                
                
                
                300,578,475
                
                
                
                262,698,210Income
      before income taxes
                
                
                119,443,975
                
                
                
                91,573,380
                
                
                
                83,348,645Income
      taxes
                
                
                45,782,667
                
                
                
                35,080,790
                
                
                
                33,095,596Net
      income
                
                $
                73,661,308
                
                
                
                56,492,590
                
                
                
                50,253,049Net
      income per common share:Basic
                
                $
                4.52
                
                
                
                3.48
                
                
                
                2.95Diluted
                
                $
                4.45
                
                
                
                3.43
                
                
                
                2.89Weighted
      average shares outstanding:Basic
                
                
                16,304,207
                
                
                
                16,239,883
                
                
                
                17,044,122Diluted
                
                
                16,545,703
                
                
                
                16,464,403
                
                
                
                17,374,746





See
accompanying notes to consolidated financial statements.


33





CONSOLIDATED
STATEMENTS OF SHAREHOLDERS’ EQUITY AND COMPREHENSIVE INCOME




AccumulatedAdditional
                  
                  
                  
                  
                  
                  Other
                  
                  
                  Total
                  
                  
                  TotalPaid-in
                  
                  
                  Retained
                  
                  
                  Comprehensive
                  
                  
                  Shareholders’
                  
                  
                  ComprehensiveCapital
                  
                  
                  Earnings
                  
                  
                  Income (Loss), Net
                  
                  
                  Equity
                  
                  
                  IncomeBalances
      at March 31, 2007
                  
                  $
                  5,770,665
                  
                  
                  
                  209,769,808
                  
                  
                  
                  (47,826
                  )
                  
                  
                  215,492,647Adjustment
      for change in accounting principle – Note 2
                  
                  
                  14,961,722
                  
                  
                  
                  (1,722,905
                  )
                  
                  
                  -
                  
                  
                  
                  13,238,817Balances
      at March 31, 2007, as adjusted
                  
                  
                  20,732,387
                  
                  
                  
                  208,046,903
                  
                  
                  
                  (47,826
                  )
                  
                  
                  228,731,464Proceeds
      from exercise of stock options (116,282 shares), including tax benefits of
      $1,110,598
                  
                  
                  2,724,938
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  2,724,938Common
      stock repurchases (1,375,100 shares)
                  
                  
                  (12,458,946
                  )
                  
                  
                  (29,403,198
                  )
                  
                  
                  -
                  
                  
                  
                  (41,862,144
                  )Issuance
      of restricted common stock under stock option plan (44,981
      shares)
                  
                  
                  1,348,419
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  1,348,419Stock
      option expense
                  
                  
                  3,937,925
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  3,937,925Cumulative
      effect of FASB ASC 740-10
                  
                  
                  -
                  
                  
                  
                  (550,000
                  )
                  
                  
                  -
                  
                  
                  
                  (550,000
                  )Other
      comprehensive income
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  217,329
                  
                  
                  
                  217,329
                  
                  
                  
                  217,329Net
      income
                  
                  
                  -
                  
                  
                  
                  50,253,049
                  
                  
                  
                  -
                  
                  
                  
                  50,253,049
                  
                  
                  
                  50,253,049Total
      comprehensive income
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  50,470,378Balances
      at March 31, 2008
                  
                  $
                  16,284,723
                  
                  
                  
                  228,346,754
                  
                  
                  
                  169,503
                  
                  
                  
                  244,800,980Proceeds
      from exercise of stock options (142,683 shares), including tax benefits of
      $1,320,974
                  
                  
                  2,975,335
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  2,975,335Common
      stock repurchases (288,700 shares)
                  
                  
                  (6,527,680
                  )
                  
                  
                  (1,321,084
                  )
                  
                  
                  -
                  
                  
                  
                  (7,848,764
                  )Issuance
      of restricted common stock under stock option plan (78,592
      shares)
                  
                  
                  1,418,031
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  1,418,031Stock
      option expense
                  
                  
                  3,232,229
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  3,232,229Repurchase
      and cancellation of Convertible Notes
                  
                  
                  (336,328
                  )
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (336,328
                  )Other
      comprehensive loss
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (4,399,166
                  )
                  
                  
                  (4,399,166
                  )
                  
                  
                  (4,399,166
                  )Net
      income
                  
                  
                  -
                  
                  
                  
                  56,492,590
                  
                  
                  
                  -
                  
                  
                  
                  56,492,590
                  
                  
                  
                  56,492,590Total
      comprehensive income
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  52,093,424Balances
      at March 31, 2009
                  
                  $
                  17,046,310
                  
                  
                  
                  283,518,260
                  
                  
                  
                  (4,229,663
                  )
                  
                  
                  296,334,907Proceeds
      from exercise of stock options (280,350 shares), including tax benefits of
      $1,671,344
                  
                  
                  7,424,333
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  7,424,333Common
      stock repurchases (38,500 shares)
                  
                  
                  (1,434,657
                  )
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (1,434,657
                  )Issuance
      of restricted common stock under stock option plan (68,044
      shares)
                  
                  
                  1,568,600
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  1,568,600Stock
      option expense
                  
                  
                  3,281,556
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  3,281,556Repurchase
      and cancellation of Convertible Notes
                  
                  
                  (773,320
                  )
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (773,320
                  )Other
      comprehensive income
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  2,885,227
                  
                  
                  
                  2,885,227
                  
                  
                  
                  2,885,227Net
      income
                  
                  
                  -
                  
                  
                  
                  73,661,308
                  
                  
                  
                  -
                  
                  
                  
                  73,661,308
                  
                  
                  
                  73,661,308Total
      comprehensive income
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  76,546,535Balances
      at March 31, 2010
                  
                  $
                  27,112,822
                  
                  
                  
                  357,179,568
                  
                  
                  
                  (1,344,436
                  )
                  
                  
                  382,947,954





See accompanying notes to consolidated
financial statements.


34





CONSOLIDATED
STATEMENTS OF CASH FLOWS





Years Ended March 31,2010
                
                
                2009
                
                
                2008(As Adjusted – Note 2)Cash
      flows from operating activities:Net
      income
                
                $
                73,661,308
                
                
                
                56,492,590
                
                
                
                50,253,049Adjustments
      to reconcile net income to net cash provided by operating
      activities:Amortization
      of intangible assets
                
                
                2,242,517
                
                
                
                2,454,872
                
                
                
                2,505,465Amortization
      of loan costs and discounts
                
                
                411,622
                
                
                
                745,031
                
                
                
                763,262Provision
      for loan losses
                
                
                90,298,934
                
                
                
                85,476,092
                
                
                
                67,541,805Depreciation
                
                
                5,766,532
                
                
                
                4,784,014
                
                
                
                3,760,461Gain
      on the extinguishment of debt
                
                
                (2,238,846
                )
                
                
                (3,966,783
                )
                
                
                -Amortization
      of convertible note discount
                
                
                3,903,999
                
                
                
                4,497,124
                
                
                
                4,538,863Deferred
      tax expense (benefit)
                
                
                608,244
                
                
                
                3,225,577
                
                
                
                (4,817,742
                )Compensation
      related to stock option and restricted stock plans
                
                
                4,850,156
                
                
                
                4,650,260
                
                
                
                5,286,344Unrealized
      (gain) loss on interest rate swap
                
                
                (1,107,397
                )
                
                
                773,047
                
                
                
                1,762,662Change
      in accounts:Other
      assets, net
                
                
                (2,375,923
                )
                
                
                (361,495
                )
                
                
                (1,305,070
                )Income
      taxes payable
                
                
                2,675,456
                
                
                
                (6,813,159
                )
                
                
                5,038,106Accounts
      payable and accrued expenses
                
                
                4,909,399
                
                
                
                1,956,920
                
                
                
                695,405Net
      cash provided by operating activities
                
                
                183,606,001
                
                
                
                153,914,090
                
                
                
                136,022,610Cash
      flows from investing activities:Increase
      in loans receivable, net
                
                
                (152,999,243
                )
                
                
                (128,590,255
                )
                
                
                (125,822,271
                )Net
      assets acquired from office acquisitions, primarily loans
                
                
                (2,838,303
                )
                
                
                (9,153,680
                )
                
                
                (3,220,879
                )Increase
      in intangible assets from acquisitions
                
                
                (903,918
                )
                
                
                (1,673,367
                )
                
                
                (1,755,698
                )Purchases
      of property and equipment, net
                
                
                (5,244,623
                )
                
                
                (9,862,860
                )
                
                
                (7,976,013
                )Net
      cash used in investing activities
                
                
                (161,986,087
                )
                
                
                (149,280,162
                )
                
                
                (138,774,861
                )Cash
      flows from financing activities:Proceeds
      (repayment) of senior notes payable, net
                
                
                (14,160,000
                )
                
                
                8,810,000
                
                
                
                43,900,000Repayment
      of convertible senior subordinated notes
                
                
                (14,447,500
                )
                
                
                (9,179,752
                )
                
                
                -Repayment
      of other notes payable
                
                
                -
                
                
                
                (400,000
                )
                
                
                (200,000
                )Proceeds
      from exercise of stock options
                
                
                5,752,989
                
                
                
                1,654,361
                
                
                
                1,614,340Repurchase
      of common stock
                
                
                (1,434,657
                )
                
                
                (7,848,764
                )
                
                
                (41,862,144
                )Tax
      benefit from exercise of stock options
                
                
                1,671,344
                
                
                
                1,320,974
                
                
                
                1,110,598Net
      cash (used in) provided by financing activities
                
                
                (22,617,824
                )
                
                
                (5,643,181
                )
                
                
                4,562,794(Decrease)
      increase in cash and cash equivalents
                
                
                (997,910
                )
                
                
                (1,009,253
                )
                
                
                1,810,543Effect
      of foreign currency fluctuations on cash
                
                
                182,668
                
                
                
                (319,912
                )
                
                
                -Cash
      and cash equivalents at beginning of year
                
                
                6,260,410
                
                
                
                7,589,575
                
                
                
                5,779,032Cash
      and cash equivalents at end of year
                
                $
                5,445,168
                
                
                
                6,260,410
                
                
                
                7,589,575





See
accompanying notes to consolidated financial statements.


35





NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS





(1)
            Summary of Significant
      Accounting Policies





The
Company's accounting and reporting policies are in accordance with U.S.
generally accepted accounting principles and conform to general practices within
the finance company industry.  The following is a description of the more
significant of these policies used in preparing the consolidated financial
statements.





Nature
of Operations





The
Company is a small-loan consumer finance company headquartered in Greenville,
South Carolina, that offers short-term small loans, medium-term larger loans,
related credit insurance products and ancillary products and services to
individuals who have limited access to other sources of consumer credit. 
It also offers income tax return preparation services and access to refund
anticipation loans (through a third party bank) to its customer base and to
others.





The
Company also markets computer software and related services to financial
services companies through its ParaData Financial Systems (“ParaData”)
subsidiary.





As of
March 31, 2010, the Company operated 910 offices in South Carolina, Georgia,
Texas, Oklahoma, Louisiana, Tennessee, Missouri, Illinois, New Mexico, Kentucky,
and Alabama.  The Company also operated 80 offices in Mexico.  The
Company is subject to numerous lending regulations that vary by
jurisdiction.





Principles
of Consolidation





The
consolidated financial statements include the accounts of World Acceptance
Corporation and its wholly owned subsidiaries (the “Company”). 
Subsidiaries consist of operating entities in various states and Mexico,
ParaData (a software company acquired during fiscal 1994), WAC Insurance
Company, Ltd. (a captive reinsurance company established in fiscal 1994) and
Servicios World Acceptance Corporation de Mexico (a service company established
in fiscal 2006).  All significant intercompany balances and transactions
have been eliminated in consolidation.





The
financial statements of the Company’s foreign subsidiaries in Mexico are
prepared using the local currency as the functional currency.  Assets and
liabilities of these subsidiaries are translated into US dollars at the current
exchange rate and income and expense are translated at an average exchange rate
for the period.  The resulting translation gains and losses are recognized
as a component of equity in “Accumulated Other Comprehensive Income
(Loss).”





Use
of Estimates in the Preparation of Financial Statements





The
preparation of financial statements in conformity with U.S. generally accepted
accounting principles (GAAP) requires management to make estimates and
assumptions that affect the reported amount of assets and liabilities and
disclosure of contingent liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period. 
The most significant item subject to such estimates and assumptions that could
materially change in the near term is the allowance for loan losses. 
Actual results could differ from those estimates.





Reclassification





Certain
prior period amounts have been reclassified to conform to the current
presentation.  Such reclassifications had no impact on previously reported
net income or shareholders’ equity.


36





Business
Segments





The
Company reports operating segments in accordance with Financial Accounting
Standards Board (FASB) Accounting Standards Codification (ASC) Topic 280 (Prior
authoritative literature: Statement on Financial Accounting Standards (SFAS) No.
131, “Disclosures about
Segments of an Enterprise and Related Information”).  Operating
segments are components of an enterprise about which separate financial
information is available that is evaluated regularly by the chief operating
decision maker in deciding how to allocate resources and assess
performance.  FASB ASC Topic 280 requires that a public enterprise report a
measure of segment profit or loss, certain specific revenue and expense items,
segment assets, information about the way that the operating segments were
determined and other items.





The
Company has one reportable segment, which is the consumer finance company. 
The other revenue generating activities of the Company, including the sale of
insurance products, income tax preparation, buying club and the automobile club,
are done in the existing branch network in conjunction with or as a complement
to the lending operation.  There is no discrete financial information
available for these activities and they do not meet the criteria under FASB ASC
280 Topic to be reported separately.





ParaData
provides data processing systems to 107 separate finance companies, including
the Company.  At March 31, 2010 and 2009, ParaData had total assets of $1.2
million and $1.7 million, which represented less than 1.0% of total consolidated
assets at each fiscal year end.  Total net revenues (system sales and
support) for ParaData for the years ended March 31, 2010, 2009 and 2008 were
$1.8 million, $2.0 million and $2.2 million, respectively, which represented
less than 1% of consolidated revenue for each year.  Although ParaData is
an operating segment under FASB ASC Topic 280, it does not meet the criteria to
require separate disclosure.





Cash
and Cash Equivalents





For
purposes of the statement of cash flows, the Company considers all highly liquid
investments with a maturity of three months or less from the date of original
issuance to be cash equivalents.





Loans
and Interest Income





The
Company is licensed to originate direct cash consumer loans in the states of
Georgia, South Carolina, Texas, Oklahoma, Louisiana, Tennessee, Missouri,
Illinois, New Mexico, Kentucky, and Alabama.  In addition, the Company also
originates direct cash consumer loans in Mexico.  During fiscal 2010 and
2009, the Company originated loans generally ranging up to $4,000, with terms of
36 months or less.  Experience indicates that a majority of the direct cash
consumer loans are refinanced, and the Company accounts for the refinancing as a
new loan.  Generally a customer must make multiple payments in order to
qualify for refinancing.  Furthermore, the Company’s lending policy has
predetermined lending amounts, so that in most cases a refinancing will result
in advancing additional funds.  The Company believes that the advancement
of additional funds constitutes more than a minor modification to the terms of
the existing loan, as the present value of the cash flows under the terms of the
new loan will be 10% or more of the present value of the remaining cash flows
under the terms of the original loan.





Fees
received and direct costs incurred for the origination of loans are deferred and
amortized to interest income over the contractual lives of the loans. 
Unamortized amounts are recognized in income at the time that loans are
refinanced or paid in full.





Loans are
carried at the gross amount outstanding, reduced by unearned interest and
insurance income, net of deferred origination fees and direct costs, and an
allowance for loan losses.  The Company generally calculates interest
revenue on its loans using the rule of 78s, and recognizes the interest revenue
using the collection method, which is a cash method of recognizing the revenue.
The Company believes that the combination of these two methods does not differ
materially from the interest method, which is an accrual method for recognizing
the revenue.  Charges for late payments are credited to income when
collected.


37





The
Company generally offers its loans at the prevailing statutory rates for terms
not to exceed 36 months.  Management believes that the carrying value
approximates the fair value of its loan portfolio.





Allowance
for Loan Losses





The
Company maintains an allowance for loan losses in an amount that, in
management’s opinion, is adequate to cover losses inherent in the existing loan
portfolio.  The Company charges against current earnings, as a provision
for loan losses, amounts added to the allowance to maintain it at levels
expected to cover probable losses of principal.   When establishing
the allowance for loan losses, the Company takes into consideration the growth
of the loan portfolio, the mix of the loan portfolio, current levels of
charge-offs, current levels of delinquencies, and current economic
factors.   The allowance for loan losses has an allocated and an
unallocated component.  The Company uses historical and current economic
information for net charge-offs by loan type and average loan life by loan type
to estimate the allocated component of the allowance for loan
losses.





This
method is based on the fact that many customers refinance their loans prior to
the contractual maturity.  Average contractual loan terms are approximately
11 months and the average loan life is approximately four months. 
 The allowance for loan loss model also reserves 100% of the principal on
loans greater than 90 days past due on a recency basis.  Loans are charged
off at the earlier of when such loans are deemed to be uncollectible or when six
months have elapsed since the date of the last full contractual payment. 
The Company’s charge-off policy has been consistently applied and no significant
changes have been made to the policy during the periods reported. Management
considers the charge-off policy when evaluating the appropriateness of the
allowance for loan losses.





FASB ASC
Topic 310 (Prior authoritative literature: Statement of Position No. 03-3,
“Accounting for Certain Loans
or Debt Securities Acquired in a Transfer,”) prohibits carryover or
creation of valuation allowances in the initial accounting of all loans acquired
in a transfer that are within the scope of this authoritative literature. 
The Company believes that loans acquired since the adoption of FASB ASC Topic
310 have not shown evidence of deterioration of credit quality since
origination, and therefore, are not within the scope of FASB ASC Topic
310.  Therefore, the Company records acquired loans (not within the scope
of FASB ASC Topic 310) at fair value based on current interest rates, less an
allowance for loan losses.





Property
and Equipment





Property
and equipment are stated at cost less accumulated depreciation and
amortization.  Depreciation is recorded using the straight-line method over
the estimated useful life of the related asset as follows:  building, 40
years; furniture and fixtures, 5 to 10 years; equipment, 3 to 7 years; and
vehicles, 3 years.  Amortization of leasehold improvements is recorded
using the straight-line method over the lesser of the estimated useful life of
the asset or the term of the lease.  Additions to premises and equipment
and major replacements or improvements are added at cost.  Maintenance,
repairs, and minor replacements are charged to operating expense as
incurred.   When assets are retired or otherwise disposed of, the cost
and accumulated depreciation are removed from the accounts and any gain or loss
is reflected in the consolidatedstatement of
operations.





Operating
Leases





The
Company’s office leases typically have a lease term of three years and contain
lessee renewal options and cancellation clauses in the event of regulatory
changes.  The Company typically renews its leases for one or more option
periods.  Accordingly, the Company amortizes its leasehold improvements
over the shorter of their economic lives, which are generally five years, or the
lease term that considers renewal periods that are reasonably
assured.





Other
Assets





Other
assets include cash surrender value of life insurance policies, prepaid
expenses, debt issuance costs and other deposits.


38





Derivatives
and Hedging Activities





The
Company uses interest rate swaps and foreign currency options to economically
hedge the variable cash flows associated with $50 million of its LIBOR-based
borrowings and currency fluctuations.  Interest rate swap agreements and
foreign currency options are carried at fair value.  Changes to fair value
are recorded each period as a component of the consolidated statement of
operations.  See Note 10 for further discussion related to the interest
rate swaps.  As of March 31, 2010 and 2009 the Company did not have any
foreign currency options outstanding.





Intangible
Assets and Goodwill





Intangible
assets include the cost of acquiring existing customers, and the value assigned
to non-compete agreements. Customer lists are amortized on a straight line or
accelerated basis over their estimated period of benefit, ranging from 5 to 20
years with a weighted average of approximately 9 years.  Non-compete
agreements are amortized on a straight line basis over the term of the
agreement.




The
Company evaluates goodwill annually for impairment in the fourth quarter of the
fiscal year using the market value-based approach.  The Company has one
reporting unit, the consumer finance company, and the Company has multiple
components, the lowest level of which are individual offices.  The
Company’s components are aggregated for impairment testing because they have
similar economic characteristics. The Company writes off goodwill when it closes
an office that has goodwill assigned to it.  As of March 31, 2010, the
Company had 84 offices with recorded goodwill.





Impairment
of Long-Lived Assets





The
Company assesses impairment of long-lived assets, including property and
equipment and intangible assets, whenever changes or events indicate that the
carrying amount may not be recoverable.  The Company assesses impairment of
these assets generally at the office level based on the operating cash flows of
the office and the Company’s plans for office closings.  The Company will
write down such assets to fair value if, based on an analysis, the sum of the
expected future undiscounted cash flows is less than the carrying amount of the
assets.  The Company did not record any impairment charges for the fiscal
years 2010, 2009 and 2008.





Fair Value of
Financial Instruments





FASB ASC
Topic 825 (Prior authoritative literature: SFAS No. 107, "Disclosures about the Fair Value of
Financial Instruments,") requires disclosures about the fair value of all
financial instruments, whether or not recognized in the balance sheet, for which
it is practicable to estimate that value.  In cases where quoted market
prices are not available, fair values are based on estimates using present value
or other valuation techniques.  The Company’s financial instruments consist
of the following:  cash and cash equivalents, loans receivable, senior
notes payable, convertible senior subordinated notes payable and interest rate
swaps.  Fair value approximates carrying value for all of these
instruments, except the convertible subordinated notes payable. 
 Loans receivable are originated at prevailing market rates and have an
average life of approximately four months.  Given the short-term nature of
these loans, they are continually repriced at current market rates.  The
Company’s revolving credit facility has a variable rate based on a margin over
LIBOR and reprice with any changes in LIBOR.  The fair value of convertible
subordinated notes payable is based on the current quoted market price which was
$73,388,700 and $61,701,550 as of March 31, 2010 and 2009, respectively. The
carrying value of the convertible subordinated notes payable, net of discount,
was $71,492,041 and $83,731,538 at March 31, 2010 and 2009, respectively. 
The swaps are valued based on information from a third party
broker.





Insurance
Premiums





Insurance
premiums for credit life, accident and health, property and unemployment
insurance written in connection with certain loans, net of refunds and
applicable advance insurance commissions retained by the Company, are remitted
monthly to an insurance company.  All commissions are credited to unearned
insurance commissions and recognized as income over the life of the related
insurance contracts using a method similar to that used for the recognition of
interest income.


39





Non-file
Insurance





Non-file
premiums are charged on certain loans in lieu of recording and perfecting the
Company's security interest in the assets pledged. The premiums are remitted to
a third-party insurance company.  Such insurance and the related insurance
premiums, claims, and recoveries are not reflected in the accompanying
consolidated financial statements except as a reduction in loan losses (see Note
12).





Certain
losses related to such loans, which are not recoverable through life, accident
and health, property, or unemployment insurance claims are reimbursed through
non-file insurance claims subject to policy limitations.  Any remaining
losses are charged to the allowance for loan losses.





Income
Taxes





Income
taxes are accounted for under the asset and liability method.  Deferred tax
assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases and operating
loss and tax credit carryforwards.  Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or
settled.  The effect on deferred tax assets and liabilities of a change in
tax rates is recognized in income in the period that includes the enactment
date.





Beginning
with the adoption of FASB ASC Topic 740-10 (Prior authoritative
literature:  FASB Interpretation No. 48, “Accounting For Uncertainty in Income
Taxes”) as of April 1, 2007, the Company recognizes the effect of income
tax positions only if those positions are more likely than not of being
sustained.  Recognized income tax positions are measured at the largest
amount that is greater than 50% likely of being realized.  Changes in
recognition or measurement are reflected in the period in which the change in
judgment occurs.  Prior to the adoption, the Company recognized the effect
of income tax positions only if the likelihood of such positions being sustained
was probable.





Supplemental
Cash Flow
Information





For the
years ended March 31, 2010, 2009, and 2008, the Company paid interest of
$9,354,502, $9,373,237 and $10,788,530, respectively.





For the
years ended March 31, 2010, 2009, and 2008, the Company paid income taxes of
$40,628,124, $37,302,456 and $32,018,340, respectively.





Earnings
Per Share





Earnings
per share (“EPS”) are computed in accordance with FASB ASC Topic 260 (Prior
authoritative literature:  SFAS No. 128, “Earnings per Share.”) 
Basic EPS includes no dilution and is computed by dividing net income by the
weighted-average number of common shares outstanding for the period. 
Diluted EPS reflects the potential dilution of securities that could share in
the earnings of the Company.  Potential common stock included in the
diluted EPS computation consists of stock options, restricted stock and
warrants, which are computed using the treasury stock method.  Potential
common stock related to convertible senior notes are included in the diluted EPS
computation using the method prescribed by FASB ASC Topic 260-10-45 (Prior
authoritative literature:  EITF 04-8 “The Effect of Contingently
Convertible Instruments on Dilutive Earnings Per Share.”)  See Note 15 for
the reconciliation of the numerators and denominators for basic and dilutive EPS
calculations.





Stock-Based
Compensation





FASB ASC
Topic 718-10 (Prior authoritative literature: SFAS No. 123R, “Share-Based
Payment,”) requires companies to recognize in the income statement the
grant-date fair value of stock options and other equity-based compensation
issued to employees.  FASB ASC Topic 718-10 does not change the accounting
guidance for share-based payment transactions with parties other than employees
provided in FASB ASC Topic 718-10. Under FASB ASC Topic 718-10, the way an award
is classified will affect the measurement of compensation cost.
Liability-classified awards are remeasured to fair value at each balance-sheet
date until the award is settled. Equity-classified awards are measured at
grant-date fair value, amortized over the subsequent vesting period, and are not
subsequently remeasured. The fair value of non-vested stock awards for the
purposes of recognizing stock-based compensation expense is the market price of
the stock on the grant date. The fair value of options is estimated on the grant
date using the Black-Scholes option pricing model (see Note
16).


40





At
March 31, 2010, the Company had several share-based employee compensation
plans, which are described more fully in Note 16. Effective April 1, 2006,
the Company adopted FASB ASC Topic 718 using the modified prospective transition
method. Under that method of transition, compensation cost recognized during
fiscal years 2008, 2009 and 2010 includes: (a) compensation cost for all
share-based payments granted prior to, but not yet vested as of April 1,
2006, based on the grant date fair value estimated in accordance with the
original provisions of FASB ASC Topic 718, and (b) compensation cost for
all share-based payments granted subsequent to April 1, 2006, based on the
grant-date fair value estimated in accordance with the provisions of FASB ASC
Topic 718. Since this compensation cost is based on awards ultimately expected
to vest, it has been reduced for estimated forfeitures. FASB ASC Topic 718
requires forfeitures to be estimated at the time of grant and revised, if
necessary, in subsequent periods if actual forfeitures differ from those
estimates.  The Company has elected to expense grants of awards with graded
vesting on a straight-line basis over the requisite service period for each
separately vesting portion of the award.





Comprehensive
Income





Total
comprehensive income consists of net income and other comprehensive income
(loss).  The Company’s other comprehensive income (loss) and accumulated
other comprehensive income (loss) are comprised of foreign currency translation
adjustments.





Concentration
of Risk





During
the year ended March 31, 2010, the Company operated in 11 states in the
United States as well as in Mexico. For the years ended March 31, 2010,
2009 and 2008, total revenues within the Company's four largest states (measured
by total revenues) accounted for approximately 58%, 59% and 62%, respectively,
of the Company's total revenues.





Advertising
Costs





Advertising
costs are expensed when incurred.  Advertising costs were approximately
$12.8 million, $13.1 million and $12.6 million for fiscal years 2010, 2009 and
2008, respectively





Recently
Issued Accounting Pronouncements





FASB
Accounting Standards Codification





In
June 2009, the FASB issued FASB ASC Topic 105 (Prior authoritative
literature SFAS 168), “The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting
Principles.”  FASB ASC Topic 105 replaces SFAS No. 162 and
establishes the FASB Accounting Standards Codification as the source of
authoritative accounting principles recognized by the FASB to be applied by
nongovernmental entities in the preparation of financial statements in
conformity with GAAP.   FASB ASC Topic 105 is effective for financial
statements issued for interim and annual periods ending after September 15,
2009. The adoption of this pronouncement did have an impact to the Company’s
financial statement disclosures, as all references to authoritative accounting
literature have been referenced in accordance with the
Codification.





Business
Combinations





In
December 2007, the FASB issued FASB ASC Topic 805-10 (Prior authoritative
literature: SFAS No. 141 (R), “Business Combinations,” which
replaces SFAS No. 141). FASB ASC 805-10 is effective for the Company April
1, 2009 and establishes principles and requirements for how an acquirer
recognizes and measures in its financial statements the identifiable assets
acquired, the liabilities assumed, any non-controlling interest in the acquiree
and the goodwill acquired. FASB ASC Topic 805-10 also establishes disclosure
requirements which enable users to evaluate the nature and financial effects of
the business combination. FASB ASC Topic 805-10 changes how business
combinations are accounted for and impacts financial statements both on the
acquisition date and in subsequent periods. The adoption of FASB ASC Topic
805-10 did not have an impact on the Company’s financial position and results of
operations, although it may have a material impact on accounting for business
combinations in the future which cannot currently be
determined.


41





In
April 2009, the FASB issued FASB ASC Topic 805-10-05 (Prior authoritative
literature: FSP 141(R)-1 “Accounting for Assets Acquired and
Liabilities Assumed in a Business Combination That Arises from
Contingencies”). For business combinations, the standard requires the
acquirer to recognize at fair value an asset acquired or liability assumed from
a contingency if the acquisition date fair value can be determined during the
measurement period. FASB ASC Topic 805-10-05 is effective for fiscal years, and
interim periods within those fiscal years, beginning on or after
December 15, 2008, with early adoption prohibited. The Company adopted
these provisions as of April 1, 2009. FASB ASC Topic 805-10-05 was applied
prospectively for acquisitions in fiscal 2010.





Subsequent
Events





In
May 2009, the FASB issued FASB ASC Topic 855 (Prior authoritative
literature: “SFAS No. 165”), “Subsequent Events,” which
establishes general standards for accounting for and disclosure of events that
occur after the balance sheet date but before financial statements are available
to be issued (“subsequent events”). More specifically, FASB ASC Topic 855 sets
forth the period after the balance sheet date during which management of a
reporting entity should evaluate events or transactions that may occur for
potential recognition in the financial statements, identifies the circumstances
under which an entity should recognize events or transactions occurring after
the balance sheet date in its financial statements and the disclosures that
should be made about events or transactions that occur after the balance sheet
date.  FASB ASC Topic 855 provides largely the same guidance on subsequent
events that previously existed only in auditing literature. The disclosure is
required in financial statements for interim and annual periods ending after
June 15, 2009. The Company has performed an evaluation of subsequent events
through the date these Consolidated Financial Statements are filed.





On May
11, 2010, the Board of Directors authorized the Company to repurchase up to $20
million of the Company’s common stock.  This repurchase authorization
follows, and is in addition to, a similar repurchase authorization of $15
million announced May 11, 2009.  Through June 8, 2010, the Company
repurchased 779,321 shares for approximately $27.4 million. Taking into
consideration these repurchases the Company has $6.2 million in aggregate
remaining repurchase capacity under all of the company’s outstanding repurchase
authorizations.





Useful
Life of Intangible Assets





In April
2008, the FASB issued FASB ASC Topic 350-30-55-1c (Prior authoritative
literature: FASB Staff Position No. FAS 142-3), “Determination of the Useful Life of
Intangible Assets.”  FASB ASC Topic 350-30-55-1c applies to all
recognized intangible assets and its guidance is restricted to estimating the
useful life of recognized intangible assets.  FASB ASC Topic 350-30-55-1c
is effective for the first fiscal period beginning after December 15, 2008 and
must be applied prospectively to intangible assets acquired after the effective
date.  The Company adopted FASB ASC Topic 350-30-55-1c effective April 1,
2009 with no significant impact to the Consolidated Financial
Statements.





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




FASB ASC
Topic 820-10-65-4 (Prior authoritative literature: FASB Staff Position 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,” provides additional guidance for estimating fair value in
accordance with FASB ASC Topic 820 when the volume and level of activity for the
asset or liability have significantly decreased. FASB ASC Topic 820-10-65-4 also
provides guidance for determining when a transaction is an orderly one. 
The Company adopted FASB ASC Topic 820-10-65-4 during the quarter ended June 30,
2009 and the adoption did not have a significant impact on the Company’s
Consolidated Financial Statements.


42




Instruments
Indexed to an Entity’s Own Stock





In June
2008, the FASB ratified FASB ASC Topic 815-40 (Prior authoritative literature:
EITF Issue 07-5, “Determining
Whether an Instrument (or Embedded Feature) Is Indexed to an Entity’s Own
Stock” ). FASB ASC Topic 815-40 provides a new two-step model to be
applied to any freestanding financial instrument or embedded feature that has
all the characteristics of a derivative in FASB ASC Topic 815-10-15 (Prior
authoritative literature: FASB No. 133, “Accounting for Derivative
Instruments and Hedging Activities,”) in determining whether a financial
instrument or an embedded feature is indexed to an issuer’s own stock and thus
able to qualify for scope exception. It also adds clarity on the impact of
foreign currency denominated strike prices and market-based employee stock
option valuation instruments on the evaluation. FASB ASC Topic 815-40 also
applies to any freestanding financial instrument that is potentially settled in
an entity’s own stock, regardless of whether the instrument has all the
characteristics of a derivative in FASB ASC Topic 815-10-15.  The Company
adopted FASB ASC Topic 815-40 during the quarter ended June 30, 2009 and the
adoption did not have a material impact on the Company’s Consolidated Financial
Statements.





(2)
            Change in Accounting
      Principle





In May
2008, the FASB issued FASB ASC Topic 470-20 (Prior authoritative literature:
FASB Staff Position No. APB 14-1 “Accounting for Convertible Debt
Instruments that May be Settled in Cash upon Conversion (Including Partial Cash
Settlement)”).  FASB ASC Topic 470-20 applies to any convertible
debt instrument that at conversion may be settled wholly or partly with cash,
requires cash-settleable convertibles to be separated into their debt and equity
components at issuance and prohibits the use of the fair-value option for such
instruments.  FASB ASC Topic 470-20 was effective for the first fiscal
period beginning after December 15, 2008 and was applied retrospectively to all
periods presented with a cumulative effect adjustment being made as of the
earliest period presented.  The Company adopted FASB ASC Topic 470-20
effective April 1, 2009.  The impact on our Consolidated Financial
Statements is as follows:


Year Ended March 31,2009
                      
                      
                      2008Upon
                      
                      
                      
                      
                      
                      
                      
                      
                      UponAs
                      
                      
                      Impact of
                      
                      
                      Adoption
                      
                      
                      As
                      
                      
                      Impact of
                      
                      
                      AdoptionPreviously
                      
                      
                      FASB
                      
                      
                      of FASB
                      
                      
                      Previously
                      
                      
                      FASB
                      
                      
                      FASBReported
                      
                      
                      ASC 470-20
                      
                      
                      ASC 470-20
                      
                      
                      Reported
                      
                      
                      ASC 470-20
                      
                      
                      ASC 470-20(in thousands, except per share data)Consolidated
      Statements of OperationsInsurance
      commissions and other income
                      
                      $
                      62,251
                      
                      
                      
                      (1,553
                      )
                      
                      
                      60,698
                      
                      
                      
                      53,590
                      
                      
                      
                      -
                      
                      
                      
                      53,590Interest
      expense
                      
                      
                      10,389
                      
                      
                      
                      4,497
                      
                      
                      
                      14,886
                      
                      
                      
                      11,569
                      
                      
                      
                      4,369
                      
                      
                      
                      15,938Income
      before income taxes
                      
                      
                      97,624
                      
                      
                      
                      (6,050
                      )
                      
                      
                      91,574
                      
                      
                      
                      87,717
                      
                      
                      
                      (4,368
                      )
                      
                      
                      83,349Income
      taxes
                      
                      
                      36,920
                      
                      
                      
                      (1,839
                      )
                      
                      
                      35,081
                      
                      
                      
                      34,721
                      
                      
                      
                      (1,625
                      )
                      
                      
                      33,096Net
      income
                      
                      
                      60,703
                      
                      
                      
                      (4,210
                      )
                      
                      
                      56,493
                      
                      
                      
                      52,996
                      
                      
                      
                      (2,743
                      )
                      
                      
                      50,253Earnings
      per common shareBasic
                      
                      $
                      3.74
                      
                      
                      
                      (0.26
                      )
                      
                      
                      3.48
                      
                      
                      
                      3.11
                      
                      
                      
                      (0.16
                      )
                      
                      
                      2.95Diluted
                      
                      
                      3.69
                      
                      
                      
                      (0.26
                      )
                      
                      
                      3.43
                      
                      
                      
                      3.05
                      
                      
                      
                      (0.16
                      )
                      
                      
                      2.89


43





As of March 31, 2009UponAs
                  
                  
                  Impact of
                  
                  
                  AdoptionPreviously
                  
                  
                  FASB
                  
                  
                  of FASBReported
                  
                  
                  ASC 470-20
                  
                  
                  ASC 470-20(in thousands)Consolidated
      Balance SheetsDeferred
      income taxes
                  
                  $
                  16,983
                  
                  
                  
                  (4,732
                  )
                  
                  
                  12,251Other
      assets, net
                  
                  
                  9,970
                  
                  
                  
                  (428
                  )
                  
                  
                  9,542Total
      assets
                  
                  
                  531,254
                  
                  
                  
                  (5,160
                  )
                  
                  
                  526,094Convertible
      senior subordinated notes payable, net of discount
                  
                  
                  95,000
                  
                  
                  
                  (11,268
                  )
                  
                  
                  83,732Income
      taxes payable
                  
                  
                  11,253
                  
                  
                  
                  160
                  
                  
                  
                  11,413Total
      liabilities
                  
                  
                  240,868
                  
                  
                  
                  (11,109
                  )
                  
                  
                  229,759Additional
      paid-in capital
                  
                  
                  2,421
                  
                  
                  
                  14,625
                  
                  
                  
                  17,046Retained
      earnings
                  
                  
                  292,195
                  
                  
                  
                  (8,677
                  )
                  
                  
                  283,518Total
      shareholders’ equity
                  
                  
                  290,386
                  
                  
                  
                  5,949
                  
                  
                  
                  296,335Total
      liabilities and shareholders’ equity
                  
                  
                  531,254
                  
                  
                  
                  (5,160
                  )
                  
                  
                  526,094





(3)
            Accumulated Other
      Comprehensive Loss





The
Company applies the provisions of FASB ASC Topic 220-10 (Prior authoritative
literature:  SFAS No. 130, “Reporting Comprehensive
Income.”)  The following summarizes accumulated other comprehensive
(loss) income as of March 31, 2010, 2009 and 2008:





2010
                  
                  
                  2009
                  
                  
                  2008Balance
      at beginning of year
                  
                  $
                  (4,229,663
                  )
                  
                  
                  169,503
                  
                  
                  
                  (47,826
                  )Unrealized
      gain (loss) from foreign exchange translation adjustment
                  
                  
                  2,885,227
                  
                  
                  
                  (4,399,166
                  )
                  
                  
                  217,329Total
      accumulated other comprehensive (loss) income
                  
                  $
                  (1,344,436
                  )
                  
                  
                  (4,229,663
                  )
                  
                  
                  169,503





(4)
            Allowance for Loan
      Losses





The
following is a summary of the changes in the allowance for loan losses for the
years ended March 31, 2010, 2009, and 2008:


March 31,2010
                  
                  
                  2009
                  
                  
                  2008Balance
      at the beginning of the year
                  
                  $
                  38,020,770
                  
                  
                  
                  33,526,147
                  
                  
                  
                  27,840,239Provision
      for loan losses
                  
                  
                  90,298,934
                  
                  
                  
                  85,476,092
                  
                  
                  
                  67,541,805Loan
      losses
                  
                  
                  (94,782,185
                  )
                  
                  
                  (88,728,498
                  )
                  
                  
                  (68,985,269
                  )Recoveries
                  
                  
                  9,139,923
                  
                  
                  
                  7,590,928
                  
                  
                  
                  6,989,297Translation
      adjustment
                  
                  
                  219,377
                  
                  
                  
                  (306,340
                  )
                  
                  
                  18,135Allowance
      on acquired loans
                  
                  
                  -
                  
                  
                  
                  462,441
                  
                  
                  
                  121,940Balance
      at the end of the year
                  
                  $
                  42,896,819
                  
                  
                  
                  38,020,770
                  
                  
                  
                  33,526,147





The
Company follows FASB ASC Topic 310 which prohibits carry over or creation of
valuation allowances in the initial accounting of all loans acquired in a
transfer that are within the scope of this accounting literature. 
Management believes that a loan has shown deterioration if it is over 60 days
delinquent.  The Company believes that loans acquired have not shown 
evidence of  deterioration of  credit  quality  since
origination, and therefore, are not within the scope of FASB ASC Topic 310
because the Company did not pay consideration for, or record, acquired loans
over 60 days delinquent.  Loans acquired that are more than 60 days past
due are included in the scope of FASB ASC Topic 310 and, therefore, subsequent
refinances or restructures of these loans would not be accounted for as a new
loan.


44





For the
years ended March 31, 2009 and 2008, the Company recorded adjustments of
approximately $0.5 million and $0.1 million, respectively, to the allowance for
loan losses in connection with its acquisitions in accordance generally accepted
accounting principles.  No adjustment was made for the year ended March 31,
2010.  These adjustments represent the allowance for loan losses on
acquired loans that do not meet the scope of FASB ASC Topic 310 (also see Note
1).





(5)
            Property and
      Equipment





Property
and equipment consist of:


March 31,2010
                    
                    
                    2009Land
                    
                    $
                    250,443
                    
                    
                    
                    250,443Buildings
      and leasehold improvements
                    
                    
                    12,794,625
                    
                    
                    
                    11,323,770Furniture
      and equipment
                    
                    
                    31,403,537
                    
                    
                    
                    31,086,25544,448,605
                    
                    
                    
                    42,660,468Less
      accumulated depreciation and amortization
                    
                    
                    (21,462,775
                    )
                    
                    
                    (19,600,108
                    )Total
                    
                    $
                    22,985,830
                    
                    
                    
                    23,060,360





Depreciation
expense was approximately $5,767,000, $4,784,000 and $3,760,000 for the years
ended March 31, 2010, 2009 and 2008, respectively.





(6)
            Intangible
      Assets




The
following table provides the gross carrying amount and related accumulated
amortization of definite-lived intangible assets:


March 31, 2010
                  
                  
                  March 31. 2009Gross Carrying
                  
                  
                  Accumulated
                  
                  
                  Gross Carrying
                  
                  
                  AccumulatedAmount
                  
                  
                  Amortization
                  
                  
                  Amount
                  
                  
                  AmortizationCost
      of acquiring existing customers
                  
                  $
                  20,304,885
                  
                  
                  $
                  (12,940,041
                  )
                  
                  $
                  19,522,401
                  
                  
                  $
                  (10,827,445
                  )Value
      assigned to non-compete agreements
                  
                  $
                  8,042,643
                  
                  
                  
                  (7,793,969
                  )
                  
                  
                  7,956,643
                  
                  
                  
                  (7,664,048
                  )Total
                  
                  $
                  28,347,528
                  
                  
                  $
                  (20,734,010
                  )
                  
                  $
                  27,479,044
                  
                  
                  $
                  (18,491,493
                  )





The
estimated amortization expense for intangible assets for future years ended
March 31 is as follows: $1.8 million for 2011; $1.5 million for 2012, $1.1
million for 2013; $0.8 million for 2014; $0.4 million for 2015; and an aggregate
of $2.0 million for the years thereafter.


45





(7)
            Goodwill





The
following summarizes the changes in the carrying amount of goodwill for the year
ended March 31, 2010 and 2009:


March 31,2010
                  
                  
                  2009Balance
      at beginning of yearGoodwill
                  
                  $
                  5,580,946
                  
                  
                  
                  5,352,675Accumulated
      goodwill impairment losses
                  
                  
                  -
                  
                  
                  
                  -$
                  5,580,946
                  
                  
                  
                  5,352,675Goodwill
      acquired during the year
                  
                  $
                  35,434
                  
                  
                  
                  228,271Impairment
      losses
                  
                  
                  -
                  
                  
                  
                  -Balance
      at end of yearGoodwill
                  
                  $
                  5,616,380
                  
                  
                  
                  5,580,946Accumulated
      goodwill impairment losses
                  
                  
                  -
                  
                  
                  
                  -$
                  5,616,380
                  
                  
                  
                  5,580,946





The
Company performed an annual impairment test during the fourth quarter of fiscal
2010 and determined that none of the recorded goodwill was
impaired.





(8)
            Notes
      Payable





The
Company's notes payable consist of:





Senior
Notes Payable $238,317,000 Revolving Credit Facility





This
facility provides for borrowings of up to $238,317,000, with $99,150,000
outstanding at March 31, 2010, subject to a borrowing base formula.  The
Company may borrow, at its option, at the rate of prime or LIBOR plus 3.00% with
a minimum of 4.00%.  At March 31, 2010 and 2009, the Company’s interest
rate was 4.25% and 3.25%, respectively, andthe unused amount
available under the revolver at March 31, 2010 was $139.2 million.  The
revolving credit facility has a commitment fee of 0.375% per annum on the unused
portion of the commitment.  Borrowings under the revolving credit facility
mature on July 31, 2011.





A member
of the Company’s Board of Directors serves as a Director of The South Financial
Group, which is the parent of Carolina First Bank.  As of March 31, 2010,
Carolina First Bank had committed to fund up to $25.9 million under the credit
facility.





Substantially
all of the Company’s assets are pledged as collateral for borrowings under the
revolving credit agreement.





Convertible
Senior Notes




On
October 10, 2006, the Company issued $110 million aggregate principal amount of
its 3.0% convertible senior subordinated notes due October 1, 2011 (the
“Convertible Notes”) to qualified institutional brokers in accordance with Rule
144A of the Securities Act of 1933. Interest on the Convertible Notes is payable
semi-annually in arrears on April 1 and October 1 of each year, commencing April
1, 2007. The Convertible Notes are the Company’s direct, senior subordinated,
unsecured obligations and rank equally in right of payment with all existing and
future unsecured senior subordinated debt of the Company, senior in right of
payment to all of the Company’s existing and future subordinated debt and junior
to all of the Company’s existing and future senior debt.  The Convertible
Notes are structurally junior to the liabilities of the Company’s
subsidiaries.  The Convertible Notes are convertible prior to maturity,
subject to certain conditions described below, at an initial conversion rate of
16.0229 shares per $1,000 principal amount of notes, which represents an initial
conversion price of approximately $62.41 per share, subject to adjustment. 
Upon conversion, the Company will pay cash up to the principal amount of notes
converted and deliver shares of its common stock to the extent the daily
conversion value exceeds the proportionate principal amount based on a 30
trading-day observation period.


46





Holders
may convert the Convertible Notes prior to July 1, 2011 only if one or more of
the following conditions are satisfied:




•
            During
      any fiscal quarter commencing after December 31, 2006, if the last
      reported sale price of the common stock for at least 20 trading days
      during a period of 30 consecutive trading days ending on the last trading
      day of the preceding fiscal quarter is greater than or equal to 120% of
      the applicable conversion price on such last trading
  day;





•
            During
      the five business day period after any ten consecutive trading day period
      in which the trading price per note for each day of such ten consecutive
      trading day period was less than 98% of the product of the last reported
      sale price of the Company’s common stock and the applicable conversion
      rate on each such day; or





•
            The
      occurrence of specified corporate
transactions.





If the
Convertible Notes are converted in connection with certain fundamental changes
that occur prior to October 1, 2011, the Company may be obligated to pay an
additional make-whole premium with respect to the Convertible Notes
converted.  If the Company undergoes certain fundamental changes, holders
of Convertible Notes may require the Company to purchase the Convertible Notes
at a price equal to 100% of the principal amount of the Convertible Notes
purchased plus accrued interest to, but excluding, the purchase
date.





Holders
may also surrender their Convertible Notes for conversion anytime on or after
July 1, 2011 until the close of business on the third business day immediately
preceding the maturity date, regardless of whether any of the foregoing
conditions have been satisfied.




The
contingent conversion feature was not required to be bifurcated and accounted
for separately under the provisions of FASB ASC Topic 815-10-15.




The
aggregate underwriting commissions and other debt issuance costs incurred with
respect to the issuance of the Convertible Notes were approximately $3.6 million
and are being amortized over the period the convertible senior notes are
outstanding.




Convertible
Notes Hedge Strategy




Concurrent
and in connection with the sale of the Convertible Notes, the Company purchased
call options to purchase shares of the Company’s common stock equal to the
conversion rate as of the date the options are exercised for the Convertible
Notes, at a price of $62.41 per share. The cost of the call options totaled
$24.6 million. The Company also sold warrants to the same counterparties to
purchase from the Company an aggregate of 1,762,519 shares of the Company’s
common stock at a price of $73.97 per share and received net proceeds from the
sale of these warrants of $16.2 million. Taken together, the call option
and warrant agreements increased the effective conversion price of the
Convertible Notes to $73.97 per share. The call options and warrants must
be settled in net shares. On the date of settlement, if the market price per
share of the Company’s common stock is above $73.97 per share, the Company will
be required to deliver shares of its common stock representing the value of the
call options and warrants in excess of $73.97 per share.




The
warrants have a strike price of $73.97 and are generally exercisable at
anytime. The Company issued and sold the warrants in a transaction exempt
from the registration requirements of the Securities Act of 1933, as amended, by
virtue of section 4(2) thereof. There were no underwriting commissions or
discounts in connection with the sale of the warrants.





In
accordance with FASB ASC Topic 815-40 (Prior authoritative literature: EITF. No.
00-19 “Accounting for Derivative Financial Instruments Indexed to, and
Potentially Settled in, the Company’s Own Stock,”) the Company accounted for the
call options and warrants as a net reduction in additional paid in capital, and
is not required to recognize subsequent changes in fair value of the call
options and warrants in its consolidated financial statements.


47





Accounting
for Convertible Debt Instruments That May Be Settled in Cash Upon
Conversion





On April
1, 2009, we adopted FASB ASC Topic 470-20 (Prior authoritative literature: FSP
APB 14-1, Accounting for
Convertible Debt Instruments That May Be Settled in Cash upon Conversion
(Including Partial Cash Settlement).  FASB ASC Topic 470-20 requires
the convertible debt to be separated between its liability and equity
components, in a manner that reflects our non-convertible debt borrowing rate,
determined to be 8.7% at the time of the issuance of the convertible notes, and
must be applied retroactively to all periods presented.  See Note 2
for disclosure about the financial statement impact of our adoption of FASB ASC
470-20.





The
carrying amounts of the debt and equity components are as follows:





At March 31,2010
                  
                  
                  2009(in thousands)Face
      value of convertible debt
                  
                  $
                  77,000
                  
                  
                  
                  95,000Unamortized
      discount
                  
                  
                  (5,508
                  )
                  
                  
                  (11,268
                  )Net
      carrying amount of debt component
                  
                  $
                  71,492
                  
                  
                  
                  83,732Carrying
      amount of equity component
                  
                  $
                  22,586
                  
                  
                  
                  23,359





The
interest expense relating to both the contractual interest coupon and
amortization of the discount on the liability component are as
follows:





At March 31,2010
                  
                  
                  2009(in thousands)Contractual
      interest coupon
                  
                  $
                  2,560
                  
                  
                  
                  3,234Amortization
      of the discount on the liability component
                  
                  
                  3,904
                  
                  
                  
                  4,497Total
      interest expense on convertible notes
                  
                  $
                  6,464
                  
                  
                  
                  7,731





For
fiscal 2010 and 2009, the effective interest rate on the liability component was
8.4%.  Due to the combination of put, call and conversion options that
are part of the terms of the convertible note agreement, the remaining discount
on the liability component will be amortized over 16 months.





Debt
Covenants





The
various debt agreements contain restrictions on the amounts of permitted
indebtedness, investments, working capital, repurchases of common stock and cash
dividends.  At March 31, 2010, $67.1 million was available under these
covenants for the payment of cash dividends, or the repurchase of the Company's
common stock, or the repurchase of subordinated debt.  In addition,
the agreements restrict liens on assets and the sale or transfer of
subsidiaries.





The
aggregate annual maturities of the notes payable for each of the fiscal years
subsequent to March 31, 2010, are as follows: 2011, $0; 2012, $176,150,000; and
none thereafter.


48





(9)
            Extinguishment Of
      Debt





During
fiscal 2010, the Company repurchased, in privately negotiated transactions, an
aggregate principal amount of $18.0 million of its Convertible Notes at an
average discount to face value of approximately 19.7%. The Company spent
approximately $14.4 million in the aggregate on these repurchases. The
transactions were treated as an extinguishment of debt for accounting
purposes.  The Company recorded a gain of approximately $2.2 million on the
repurchase of the Convertible Notes, which was partially offset by the write-off
of $230,000 of deferred financing costs associated with the repurchase and
cancellation of Convertible Notes.





During
fiscal 2009, the Company repurchased, in privately negotiated transactions, an
aggregate principal amount of $15.0 million of its Convertible Notes at an
average discount to face value of approximately 38.8%. The Company spent
approximately $9.2 million in the aggregate on these repurchases. The
transactions were treated as an extinguishment of debt for accounting
purposes.  The Company recorded a gain of approximately $4.0 million on the
repurchase of the Convertible Notes, which was partially offset by the write-off
of $300,000 of deferred financing costs associated with the repurchase and
cancellation of Convertible Notes.





(10)
            Derivative
      Financial Instruments





On
December 8, 2008, the Company entered into an interest rate swap with a notional
amount of $20 million to economically hedge a portion of the cash flows from its
floating rate revolving credit facility.  Under the terms of the
interest rate swap, the Company pays a fixed rate of 2.4% on the $20 million
notional amount and receives payments from a counterparty based on the 1 month
LIBOR rate for a term ending December 8, 2011.  Interest rate
differentials paid or received under the swap agreement are recognized as
adjustments to interest expense.





On
October 5, 2005, the Company entered into an interest rate swap with a notional
amount of $30 million to economically hedge a portion of the cash flows from its
floating rate revolving credit facility.  Under the terms of the
interest rate swap, the Company will pay a fixed rate of 4.755% on the $30
million notional amount and receive payments from a counterparty based on the 1
month LIBOR rate for a term ending October 5, 2010.  Interest rate
differentials paid or received under the swap agreement are recognized as
adjustments to interest expense.





On May
15, 2008, the Company entered into a $10 million foreign currency exchange
option to economically hedge its foreign exchange risk relative to the Mexican
peso.  Under the terms of the option contract, the Company could
exchange $10 million U.S. dollars at a rate of 11.0 Mexican pesos per
dollar.  The option was sold in October 2008 and the Company recorded
a $1.5 million net gain.





The fair
value of the Company’s interest rate derivative instruments is included in
the Consolidated Balance Sheets as follows:





InterestRate SwapsMarch
      31, 2010:Accounts
      payable and accrued expenses
                  
                  $
                  1,336,269Fair
      value of derivative instrument
                  
                  $
                  1,336,269March
      31, 2009:Accounts
      payable and accrued expenses
                  
                  $
                  2,443,666Fair
      value of derivative instrument
                  
                  $
                  2,443,666





Both of
the interest rate swaps are currently in liability positions, therefore there is
no significant risk of loss related to counterparty credit
risk.


49





The gains
(losses) recognized in the Company’s Consolidated Statements of Operations
as a result of the interest rate swaps and foreign currency exchange option are
as follows:





Year EndedMarch
      31,
                              
                              
                              March
      31,
                              
                              
                              March
      31,2010
                              
                              
                              2009
                              
                              
                              2008Realized
      losses:Interest
      rate swaps – included as a componentof
      interest expense
                              
                              $
                              (1,784,575
                              )
                              
                              
                              (895,813
                              )
                              
                              
                              39,042Foreign
      currency exchange option – included as acomponent
      of other income
                              
                              $
                              -
                              
                              
                              
                              (1,548,500
                              )
                              
                              
                              -Unrealized
      gains (losses) included as a componentof
      other incomeInterest
      rate swaps
                              
                              $
                              1,107,397
                              
                              
                              
                              (773,047
                              )
                              
                              
                              1,762,662Foreign
      currency exchange option
                              
                              $
                              -
                              
                              
                              
                              -
                              
                              
                              
                              6,900





The
Company does not enter into derivative financial instruments for trading or
speculative purposes.  The purpose of these instruments is to reduce
the exposure to variability in future cash flows attributable to a portion of
its LIBOR-based borrowings and to reduce variability in foreign cash
flows.  The Company is currently not accounting for these derivative
instruments using the cash flow hedge accounting provisions of FASB ASC Topic
815-10-15; therefore, the changes in fair value of the swap and option are
included in earnings as other income or expenses.





By using
derivative instruments, the Company is exposed to credit and market
risk.  Credit risk, which is the risk that a counterparty to a
derivative instrument will fail to perform, exists to the extent of the fair
value gain in a derivative.  Market risk is the adverse effect on the
financial instruments from a change in interest rates or implied volatility of
exchange rates.  The Company manages the market risk associated with
interest rate contracts and currency options by establishing and monitoring
limits as to the types and degree of risk that may be undertaken.  The
market risk associated with derivatives used for interest rate and foreign
currency risk management activities is fully incorporated in the Company’s
market risk sensitivity analysis.





(11)
            Insurance Commissions
      and other income





Insurance
commissions and other income for the years ending March 31, 2010, 2009 and 2008
consist of:





2010
                  
                  
                  2009
                  
                  
                  2008Insurance
      commissions
                  
                  $
                  37,194,717
                  
                  
                  
                  32,430,496
                  
                  
                  
                  30,403,085Tax
      return preparation revenue
                  
                  
                  10,850,852
                  
                  
                  
                  9,868,849
                  
                  
                  
                  9,657,325Gain
      on extinguishment of debt, net
                  
                  
                  2,238,846
                  
                  
                  
                  3,966,783
                  
                  
                  
                  -Auto
      club membership revenue
                  
                  
                  4,536,074
                  
                  
                  
                  4,088,500
                  
                  
                  
                  4,297,327World
      Class Buying Club revenue
                  
                  
                  3,832,884
                  
                  
                  
                  3,780,851
                  
                  
                  
                  4,582,273Other
                  
                  
                  6,951,774
                  
                  
                  
                  6,562,541
                  
                  
                  
                  4,649,586Insurance
      commissions and other income
                  
                  $
                  65,605,147
                  
                  
                  
                  60,698,020
                  
                  
                  
                  53,589,596





(12)
            Non-file
      Insurance





The
Company maintains non-file insurance coverage with an unaffiliated insurance
company.  The following is a summary of the non-file insurance
activity for the years ended March 31, 2010, 2009 and 2008:




2010
                        
                        
                        2009
                        
                        
                        2008Insurance
      premiums written
                        
                        $
                        6,227,752
                        
                        
                        
                        5,768,316
                        
                        
                        
                        5,885,108Recoveries
      on claims paid
                        
                        $
                        646,229
                        
                        
                        
                        598,887
                        
                        
                        
                        553,035Claims
      paid
                        
                        $
                        6,136,490
                        
                        
                        
                        5,620,489
                        
                        
                        
                        5,987,181





50




(13)
            Leases





The
Company conducts most of its operations from leased facilities, except for its
owned corporate office building.  The Company's leases typically have
a lease term of three years and contain lessee renewal
options.   A majority of the leases provide that the lessee pays
property taxes, insurance, and common area maintenance costs. It is expected
that in the normal course of business, expiring leases will be renewed at the
Company's option or replaced by other leases or acquisitions of other
properties.  All of the Company’s leases are operating
leases.





The
future minimum lease payments under noncancelable operating leases as of March
31, 2010, are as follows:





2011
                    
                    
                    14,882,4552012
                    
                    
                    9,865,7012013
                    
                    
                    4,670,0542014
                    
                    
                    657,5112015
                    
                    
                    138,777Thereafter
                    
                    
                    -Total
      future minimum lease payments
                    
                    $
                    30,214,498





Rental
expense for cancelable and noncancelable operating leases for the years ended
March 31, 2010, 2009 and 2008, was $15,865,447, $14,257,168 and $12,198,271,
respectively.





(14)
            Income
      Taxes





Income
tax expense (benefit) consists of:





Current
                  
                  
                  Deferred
                  
                  
                  TotalYear
      ended March 31, 2010:U.S.
      Federal
                  
                  $
                  39,979,719
                  
                  
                  
                  525,900
                  
                  
                  
                  40,505,619State
      and local
                  
                  
                  4,918,495
                  
                  
                  
                  82,344
                  
                  
                  
                  5,000,839Foreign
                  
                  
                  276,209
                  
                  
                  
                  -
                  
                  
                  
                  276,209$
                  45,174,423
                  
                  
                  
                  608,244
                  
                  
                  
                  45,782,667Year
      ended March 31, 2009:U.S.
      Federal
                  
                  
                  27,459,617
                  
                  
                  
                  3,311,357
                  
                  
                  
                  30,770,974State
      and local
                  
                  
                  4,351,570
                  
                  
                  
                  (85,780
                  )
                  
                  
                  4,265,790Foreign
                  
                  
                  44,026
                  
                  
                  
                  -
                  
                  
                  
                  44,026$
                  31,855,213
                  
                  
                  
                  3,225,577
                  
                  
                  
                  35,080,790Year
      ended March 31, 2008:U.S.
      Federal
                  
                  $
                  33,340,513
                  
                  
                  
                  (3,954,130
                  )
                  
                  
                  29,386,383State
      and local
                  
                  
                  3,987,193
                  
                  
                  
                  (863,612
                  )
                  
                  
                  3,123,581Foreign
                  
                  
                  585,632
                  
                  
                  
                  -
                  
                  
                  
                  585,632$
                  37,913,338
                  
                  
                  
                  (4,817,742
                  )
                  
                  
                  33,095,596


51





Income
tax expense was $45,782,667, $35,080,790 and $33,095,596, for the years ended
March 31, 2010, 2009 and 2008, respectively, and differed from the amounts
computed by applying the U.S. federal income tax rate of 35% to pretax income
from continuing operations as a result of the following:





2010
                    
                    
                    2009
                    
                    
                    2008Expected
      income tax
                    
                    $
                    41,805,391
                    
                    
                    
                    32,050,683
                    
                    
                    
                    29,172,026Increase
      (reduction) in income taxes resulting from:State
      tax, net of federal benefit
                    
                    
                    3,250,545
                    
                    
                    
                    2,772,764
                    
                    
                    
                    2,030,328Change
      in valuation allowance
                    
                    
                    60
                    
                    
                    
                    (405,425
                    )
                    
                    
                    (335,361
                    )Insurance
      income exclusion
                    
                    
                    (237,574
                    )
                    
                    
                    (108,636
                    )
                    
                    
                    (117,834
                    )Uncertain
      tax positions
                    
                    
                    420,594
                    
                    
                    
                    539,211
                    
                    
                    
                    1,408,734Other,
      net
                    
                    
                    543,651
                    
                    
                    
                    232,193
                    
                    
                    
                    937,703$
                    45,782,667
                    
                    
                    
                    35,080,790
                    
                    
                    
                    33,095,596





The tax
effects of temporary differences that give rise to significant portions of the
deferred tax assets and deferred tax liabilities at March 31, 2010 and 2009 are
presented below:





2010
                                                  
                                                  
                                                  2009Deferred
      tax assets:Allowance
      for doubtful accounts
                                                  
                                                  $
                                                  13,726,075
                                                  
                                                  
                                                  
                                                  14,167,863Unearned
      insurance commissions
                                                  
                                                  
                                                  9,841,960
                                                  
                                                  
                                                  
                                                  8,790,135Accounts
      payable and accrued expensesprimarily
      related to employee benefits
                                                  
                                                  
                                                  7,119,122
                                                  
                                                  
                                                  
                                                  6,512,665Accrued
      interest receivable
                                                  
                                                  
                                                  2,606,892
                                                  
                                                  
                                                  
                                                  2,595,154Convertible
      notes
                                                  
                                                  
                                                  1,016,063
                                                  
                                                  
                                                  
                                                  -Unrealized
      losses
                                                  
                                                  
                                                  499,030
                                                  
                                                  
                                                  
                                                  909,896Other
                                                  
                                                  
                                                  1,274
                                                  
                                                  
                                                  
                                                  114,804Gross
      deferred tax assets
                                                  
                                                  
                                                  34,810,416
                                                  
                                                  
                                                  
                                                  33,090,517Less
      valuation allowance
                                                  
                                                  
                                                  (1,274
                                                  )
                                                  
                                                  
                                                  (1,214
                                                  )Net
      deferred tax assets
                                                  
                                                  
                                                  34,809,142
                                                  
                                                  
                                                  
                                                  33,089,303Deferred
      tax liabilities:Fair
      value adjustment for loans
                                                  
                                                  
                                                  (15,393,253
                                                  )
                                                  
                                                  
                                                  (13,669,377
                                                  )Property
      and equipment
                                                  
                                                  
                                                  (3,492,473
                                                  )
                                                  
                                                  
                                                  (2,342,782
                                                  )Intangible
      assets
                                                  
                                                  
                                                  (1,944,965
                                                  )
                                                  
                                                  
                                                  (1,845,039
                                                  )Deferred
      net loan origination fees
                                                  
                                                  
                                                  (1,437,409
                                                  )
                                                  
                                                  
                                                  (1,402,423
                                                  )Prepaid
      expenses
                                                  
                                                  
                                                  (554,549
                                                  )
                                                  
                                                  
                                                  (544,657
                                                  )Convertible
      notes
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  
                                                  (703,030
                                                  )Other
                                                  
                                                  
                                                  (343,903
                                                  )
                                                  
                                                  
                                                  (331,161
                                                  )Gross
      deferred liabilities
                                                  
                                                  
                                                  (23,166,552
                                                  )
                                                  
                                                  
                                                  (20,838,469
                                                  )Net
      deferred tax assets
                                                  
                                                  $
                                                  11,642,590
                                                  
                                                  
                                                  
                                                  12,250,834





The
valuation allowance for deferred tax assets as of March 31, 2010 and 2009 was
$1,274 and $1,214, respectively.  The valuation allowance against the
total deferred tax assets as of March 31, 2010 and 2009 relates to state net
operating losses.  In assessing the realizability of deferred tax
assets, management considers whether it is more likely than not that some
portion or all of the deferred tax assets will not be realized.  The
ultimate realization of deferred tax assets is dependent upon the generation of
future taxable income during the periods in which those temporary differences
become deductible.  Management considers the scheduled reversals of
deferred tax liabilities, projected future taxable income, and tax planning
strategies in making this assessment.   In order to fully realize
the deferred tax asset, the Company will need to generate future taxable income
prior to the expiration of the deferred tax assets governed by the tax
code.   Based upon the level of historical taxable income and
projections for future taxable income over the periods in which the deferred tax
assets are deductible, management believes it is more likely than not the
Company will realize the benefits of these deductible differences, net of the
existing valuation allowances at March 31, 2010.  The amount of the
deferred tax asset considered realizable, however, could be reduced in the near
term if estimates of future taxable income during the carryforward period are
reduced.


52


The
Company is required to assess whether the earnings of the Company’s Mexican
foreign subsidiary will be permanently reinvested in the respective foreign
jurisdiction or if previously untaxed foreign earnings of the Company will no
longer be permanently reinvested and thus become taxable in the United
States.  As of March 31, 2010, the Company has determined that $20,097
of cumulative undistributed net losses, as well as the future net earnings, of
the Mexican foreign subsidiaries will be permanently reinvested.





The
Company adopted the provision of FASB ASC Topic 740-10, on April 1,
2007.  As a result of the implementation, the Company recognized a
charge of approximately $550,000 to the April 1, 2007 balance of retained
earnings.  As of March 31, 2010 and March 31, 2009, the Company had
$5,762,087 and $4,715,681 of total gross unrecognized tax benefits including
interest, respectively.  Of this total, approximately $3,168,539 and
$2,747,945, respectively, represents the amount of unrecognized tax benefits
that are permanent in nature and, if recognized, would affect the annual
effective tax rate.





A
reconciliation of the beginning and ending amount of unrecognized tax benefits
is as follows:





Unrecognized
      tax benefits balance at March 31, 2009
                  
                  $
                  3,872,025Gross
      increases for tax positions of current year
                  
                  
                  1,059,041Lapse
      of statute of limitations
                  
                  
                  (245,546
                  )Unrecognized
      tax benefits balance at March 31, 2010
                  
                  $
                  4,685,520





The
Company’s continuing practice is to recognize interest and penalties related to
income tax matters in income tax expense.  As of March 31, 2010, the
Company had $1,076,567 accrued for gross interest, of which $232,911 was a
current period expense.  The Company has determined that it is
possible that the total amount of unrecognized tax benefits related to various
state examinations will significantly increase or decrease within twelve months
of the reporting date.  However, at this time, a reasonable estimate
of the range of possible change cannot be made until further correspondence has
been conducted with the state taxing authorities.





The
Company is subject to U.S. and Mexican income taxes, as well as various other
state and local jurisdictions.  With few exceptions, the Company is no
longer subject to U.S. federal, state and local, or non-U.S. income tax
examinations by tax authorities for years before 2006, although carryforward
attributes that were generated prior to 2006 may still be adjusted upon
examination by the taxing authorities if they either have been or will be used
in a future period.  The income tax returns (2001 through 2006) are
under examination by a state authority which has completed its examinations and
issued a proposed assessment for tax years 2001 and 2006.  In
consideration of the proposed assessment, the total gross unrecognized tax
benefit was increased to $3.2 million in fiscal 2010.  At this time,
it is too early to predict the final outcome on this tax issue and any future
recoverability of this charge.  Until the tax issue is resolved, the
Company expects to accrue approximately $55,000 per quarter for
interest.


53





(15)
            Earnings
      Per Share





The
following is a reconciliation of the numerators and denominators of the basic
and diluted EPS calculations:





For
      the year ended March 31, 2010Income
                        
                        
                        Shares
                        
                        
                        Per
      Share(Numerator)
                        
                        
                        (Denominator)
                        
                        
                        AmountBasic
      EPSIncome
      available to common shareholders
                        
                        $
                        73,661,308
                        
                        
                        
                        16,304,207
                        
                        
                        $
                        4.52Effect
      of Dilutive SecuritiesOptions
      and restricted stock
                        
                        
                        -
                        
                        
                        
                        241,496Diluted
      EPSIncome
      available to common shareholdersplus
      assumed exercises of stock options
                        
                        $
                        73,661,308
                        
                        
                        
                        16,545,703
                        
                        
                        $
                        4.45





For the year ended March 31,
      2009Income
                        
                        
                        Shares
                        
                        
                        Per
      Share(Numerator)
                        
                        
                        (Denominator)
                        
                        
                        AmountBasic
      EPSIncome
      available to common shareholders
                        
                        $
                        56,492,590
                        
                        
                        
                        16,239,883
                        
                        
                        $
                        3.48Effect
      of Dilutive SecuritiesOptions
      and restricted stock
                        
                        
                        -
                        
                        
                        
                        224,520Diluted
      EPSIncome
      available to common shareholdersplus
      assumed exercises of stock options
                        
                        $
                        56,492,590
                        
                        
                        
                        16,464,403
                        
                        
                        $
                        3.43





For the year ended March 31,
      2008Income
                      
                      
                      Shares
                      
                      
                      Per
      Share(Numerator)
                      
                      
                      (Denominator)
                      
                      
                      AmountBasic
      EPSIncome
      available to common shareholders
                      
                      $
                      50,253,049
                      
                      
                      
                      17,044,122
                      
                      
                      $
                      2.95Effect
      of Dilutive SecuritiesOptions
      and restricted stock
                      
                      
                      -
                      
                      
                      
                      330,624Diluted
      EPSIncome
      available to common shareholdersplus
      assumed exercises of stock options
                      
                      $
                      50,253,049
                      
                      
                      
                      17,374,746
                      
                      
                      $
                      2.89





Options
to purchase 100,152, 130,583 and 183,030 shares of common stock at various
prices were outstanding during the years ended March 31, 2010, 2009 and 2008,
respectively, but were not included in the computation of diluted EPS because
the option exercise price was greater than the average market price of the
common shares.  The shares related to the convertible senior notes
payable (1,762,519) and related warrants were not included in the computation of
diluted EPS because the effect of such instruments was
antidilutive.


54





(16)
            Benefit
      Plans





Retirement
Plan





The
Company provides a defined contribution employee benefit plan (401(k) plan)
covering full-time employees, whereby employees can invest up to the maximum
designated for that year.  The Company makes a matching contribution
equal to 50% of the employees' contributions for the first 6% of gross
pay.  The Company's expense under this plan was $1,059,884, $1,078,987
and $1,078,896, for the years ended March 31, 2010, 2009 and 2008,
respectively.





Supplemental
Executive Retirement Plan





The
Company has instituted a Supplemental Executive Retirement Plan (“SERP”), which
is a non-qualified executive benefit plan in which the Company agrees to pay the
executive additional benefits in the future, usually at retirement, in return
for continued employment by the executive.  The Company selects the
key executives who participate in the SERP.  The SERP is an unfunded
plan, which means there are no specific assets set aside by the Company in
connection with the establishment of the plan.  The executive has no
rights under the agreement beyond those of a general creditor of the
Company.  For the years ended March 31, 2010, 2009 and 2008,
contributions of $928,407, $806,792 and $836,977, respectively were charged to
operations related to the SERP.  The unfunded liability was
$5,385,106, $4,722,000 and $4,000,000, as of March 31, 2010, 2009 and 2008,
respectively.





In May
2009, the Company instituted a second Supplemental Executive Retirement Plan
(“SERP”) to provide to one executive the same type of benefits as are in the
original SERP but for which he would not have qualified due to
age.  This second SERP is also an unfunded plan with no specific
assets set aside by the Company in connection with the plan.





For the
three years presented, the unfunded liability was estimated using the following
assumptions; an annual salary increase of 3.5% for all 3 years; a discount rate
of 6% for all 3 years; and a retirement age of 65.





Executive
Deferred Compensation Plan





The
Company has an Executive Deferral Plan.  Eligible executives may elect
to defer all or a portion of their incentive compensation to be paid under the
Executive Incentive Plan.  As of March 31, 2010 and 2009, no executive
had deferred compensation under this plan.





Stock
Option Plans





The
Company has a 1994 Stock Option Plan, a 2002 Stock Option Plan, a 2005 Stock
Option Plan, and a 2008 Stock Option Plan for the benefit of certain directors,
officers, and key employees.  Under these plans, 4,850,000 shares of
authorized common stock have been reserved for issuance pursuant to grants
approved by the Compensation and Stock Option Committee of the Board of
Directors.  Stock options granted under these plans have a maximum
duration of 10 years, may be subject to certain vesting requirements, which are
generally one year for directors and five years for officers and key employees,
and are priced at the market value of the Company's common stock on the date of
grant of the option.  At March 31, 2010, there were 516,895 shares
available for grant under the plans.





Stock
based compensation is recognized as provided under FASB ASC Topic 718-10 and
FASB ASC Topic 505-50 (Prior authoritative literature: SFAS No. 123(R), “Share Based
Payment”).  FASB ASC Topic 718-10 requires all share-based
payments to employees, including grants of employee stock options, to be
recognized as compensation expense over the requisite service period (generally
the vesting period) in the financial statements based on their fair values. The
impact of forfeitures that may occur prior to vesting is also estimated and
considered in the amount recognized.  The Company elected to use the
modified prospective transition method, and did not retroactively adjust results
from prior periods.  Under this transition method, stock option
compensation is recognized as an expense over the remaining unvested portion of
all stock option awards granted prior to April 1, 2006, based on the fair values
estimated at grant date in accordance with the provisions of FASB ASC Topic
718-10.  The Company has applied the Black-Scholes valuation model in
determining the fair value of the stock option awards.  Compensation
expense is recognized only for those options expected to vest, with forfeitures
estimated based on historical experience and future
expectations.


55


The
weighted-average fair value at the grant date for options issued during the
years ended March 31, 2010, 2009 and 2008 was $15.32, $8.51 and $14.41 per
share, respectively.  The following is a summary of the Company’s
weighted-average assumptions used to estimate the weighted-average per share
fair value of options granted on the date of grant using the Black-Scholes
option-pricing model:





2010
                  
                  
                  2009
                  
                  
                  2008Dividend
      yield
                  
                  
                  0
                  %
                  
                  
                  0
                  %
                  
                  
                  0
                  %Expected
      volatility
                  
                  
                  56.69
                  %
                  
                  
                  50.67
                  %
                  
                  
                  43.0
                  %Average
      risk-free interest rate
                  
                  
                  2.69
                  %
                  
                  
                  2.75
                  %
                  
                  
                  4.00
                  %Expected
      life
                  
                  6.6
years
                  
                  
                  5.9
      years
                  
                  
                  6.9
      yearsVesting
      period
                  
                  5
      years
                  
                  
                  5
      years
                  
                  
                  5
      years





The
expected stock price volatility is based on the historical volatility of the
Company’s stock for a period approximating the expected life.  The
expected life represents the period of time that options are expected to be
outstanding after their grant date.  The risk-free interest rate
reflects the interest rate at grant date on zero-coupon U.S. governmental bonds
that have a remaining life similar to the expected optionterm.





Option
activity for the year ended March 31, 2010, was as follows:





2010WeightedWeighted
                  
                  
                  AverageAverage
                  
                  
                  Remaining
                  
                  
                  AggregateExercise
                  
                  
                  Contractual
      Term
                  
                  
                  IntrinsicShares
                  
                  
                  Price
                  
                  
                  (in years)
                  
                  
                  ValueOptions
      outstanding, beginning of year
                  
                  
                  1,390,900
                  
                  
                  $
                  25.00Granted
                  
                  
                  295,750
                  
                  
                  $
                  26.73Exercised
                  
                  
                  (280,350
                  )
                  
                  $
                  20.52Forfeited
                  
                  
                  (12,950
                  )
                  
                  $
                  29.07Options
      outstanding, end of year
                  
                  
                  1,393,350
                  
                  
                  $
                  26.23
                  
                  
                  
                  7.04
                  
                  
                  $
                  16,316,003Options
      exercisable, end of year
                  
                  
                  560,100
                  
                  
                  $
                  26.06
                  
                  
                  
                  5.02
                  
                  
                  $
                  7,161,021





The
aggregate intrinsic value reflected in the table above represents the total
pre-tax intrinsic value (the difference between the closing stock price on March
31, 2010 and the exercise price, multiplied by the number of in-the-money
options) that would have been received by option holders had all option holders
exercised their options  as of  March 31,
2010.  This amount will change as the market price per share
changes.  The total intrinsic value of options exercised during the
periods ended March 31, 2010, 2009 and 2008 were as follows:





2010
                    
                    
                    2009
                    
                    
                    2008$
                    4,638,423
                    
                    
                    $
                    2,833,497
                    
                    
                    $
                    2,503,399





As of
March 31, 2010, total unrecognized stock-based compensation expense related to
non-vested stock options amounted to $7,460,763 which is expected to be
recognized over a weighted-average period of approximately 3.65
years.


56





The
following table summarizes information regarding stock options outstanding at
March 31, 2010:





WeightedAverage
                  
                  
                  Weighted
                  
                  
                  
                  
                  
                  WeightedRemaining
                  
                  
                  Average
                  
                  
                  
                  
                  
                  AverageRange
      of
                  
                  Options
                  
                  
                  Contractual
                  
                  
                  Exercise
                  
                  
                  Options
                  
                  
                  ExerciseExercise Price
                  
                  Outstanding
                  
                  
                  Life
                  
                  
                  Price
                  
                  
                  Exercisable
                  
                  
                  Price$
      4.90 - $5.99
                  
                  
                  13,150
                  
                  
                  
                  0.56
                  
                  
                  $
                  5.03
                  
                  
                  
                  13,150
                  
                  
                  $
                  5.03$
      6.00 - $ 7.99
                  
                  
                  18,000
                  
                  
                  
                  1.08
                  
                  
                  $
                  6.75
                  
                  
                  
                  18,000
                  
                  
                  $
                  6.75$
      8.00 - $ 9.99
                  
                  
                  60,900
                  
                  
                  
                  1.91
                  
                  
                  $
                  8.48
                  
                  
                  
                  60,900
                  
                  
                  $
                  8.48$11.00
      - $11.99
                  
                  
                  31,500
                  
                  
                  
                  3.13
                  
                  
                  $
                  11.44
                  
                  
                  
                  31,500
                  
                  
                  $
                  11.44$15.00
      - $16.99
                  
                  
                  303,300
                  
                  
                  
                  7.78
                  
                  
                  $
                  16.71
                  
                  
                  
                  64,700
                  
                  
                  $
                  16.18$23.00
      - $23.99
                  
                  
                  44,100
                  
                  
                  
                  4.58
                  
                  
                  $
                  23.53
                  
                  
                  
                  44,100
                  
                  
                  $
                  23.53$25.00
      - $25.99
                  
                  
                  139,200
                  
                  
                  
                  5.83
                  
                  
                  $
                  25.08
                  
                  
                  
                  104,000
                  
                  
                  $
                  25.08$26.00
      - $27.99
                  
                  
                  295,750
                  
                  
                  
                  9.62
                  
                  
                  $
                  26.73
                  
                  
                  
                  -
                  
                  
                  $
                  -$28.00
      - $28.99
                  
                  
                  279,400
                  
                  
                  
                  7.05
                  
                  
                  $
                  28.22
                  
                  
                  
                  100,000
                  
                  
                  $
                  28.25$43.00
      - $43.99
                  
                  
                  7,000
                  
                  
                  
                  7.15
                  
                  
                  $
                  43.00
                  
                  
                  
                  2,800
                  
                  
                  $
                  43.00$46.00
      - $49.00
                  
                  
                  201,050
                  
                  
                  
                  6.62
                  
                  
                  $
                  48.72
                  
                  
                  
                  120,950
                  
                  
                  $
                  48.72$
      4.90 - $49.00
                  
                  
                  1,393,350
                  
                  
                  
                  7.04
                  
                  
                  $
                  26.23
                  
                  
                  
                  560,100
                  
                  
                  $
                  26.06





Restricted Stock





On
November 9, 2009, the Company granted 41,346 shares of restricted stock (which
are equity classified), with a grant date fair value of $26.73 per share, to
certain executive officers and other officers of the
Company.  One-third of the restricted stock vested immediately and
one-third will vest on the first and second anniversary of the
grant.  On that same date, the Company granted an additional 23,159
shares of restricted stock (which are equity classified), with a grant date fair
value of $26.73 per share, to the same executive officers.  The 23,159
shares will vest on April 30, 2012 based on the Company’s compounded annual EPS
growth according to the following schedule:





CompoundedVesting
                      
                      AnnualPercentage
                      
                      EPS Growth100%
                      
                      15%
      or higher67%
                      
                      12%
      - 14.99%33%
                      
                      10%
      - 11.99%0%
                      
                      Below
      10%





On April
30, 2009 and May 11, 2009 the Company granted 15,000 shares and 3,000 shares of
restricted stock (which are equity classified), respectively, with a grant date
fair value of $29.68 and $20.41 per share, respectively, to independent
directors and a certain officer.  All of these grants vested
immediately.





On
November 10, 2008, the Company granted 50,000 shares of restricted stock (which
are equity classified), with a grant date fair value of $16.85 per share, to
certain executive officers.  One-third of the restricted stock grant
vested immediately and one-third will vest on the first and second anniversary
of grant.  On that same date, the Company granted an additional 29,100
shares of restricted stock (which are equity classified), with a grant date fair
value of $16.85 per share, to the same executive officers.  The 29,100
shares will vest in three years based on the Company’s compounded annual EPS
growth according to the following schedule:





CompoundedVesting
                      
                      AnnualPercentage
                      
                      EPS Growth100%
                      
                      15%
      or higher67%
                      
                      12%
      - 14.99%33%
                      
                      10%
      - 11.99%0%
                      
                      Below
      10%





57




On May
19, 2008 the Company granted 12,000 shares of restricted stock (which are equity
classified) with a grant date fair value of $43.67 per share to independent
directors and a certain officer.  One-half of the restricted stock
vested immediately and the other half vested on the first anniversary of
grant.





On
November 28, 2007, the Company granted 20,800 shares of restricted stock (which
are equity classified), with a grant date fair value of $30.94 per share, to
certain executive officers.  One-third of the restricted stock vested
immediately and one-third vested on the first and second anniversaries of
grant.  The Company granted an additional 15,150 shares of restricted
stock (which are equity classified), with a grant date fair value of $30.94 per
share, to the same executive officers.  The 15,150 shares will vest in
three years based on the Company’s compounded annual EPS growth according to the
following schedule:





CompoundedVesting
                    
                    AnnualPercentage
                    
                    EPS Growth100%
                    
                    15%
      or higher67%
                    
                    12%
      - 14.99%33%
                    
                    10%
      - 11.99%0%
                    
                    Below
      10%





On
November 12, 2007, the Company granted 8,000 shares of restricted stock (which
are equity classified), with a grant date fair value of $28.19 per share, to
certain officers.  One-third of the restricted stock vested
immediately and one-third vested on each of the first and second anniversaries
of grant.





Compensation
expense related to restricted stock is based on the number of shares expected to
vest and the fair market value of the common stock on the grant
date.  The Company recognized $1.95 million, $1.7 million and $1.6
million of compensation expense for the years ended March 31, 2010, 2009 and
2008, respectively, related to restricted stock, which is included as a
component of general and administrative expenses in the Consolidated Statements
of Operations.  For purposes of accruing the expense, all shares are
expected to vest.





As of
March 31, 2010, there was approximately $1.49 million of unrecognized
compensation cost related to unvested restricted stock awards granted, which is
expected to be recognized over the next two years.





A summary
of the status of the Company’s restricted stock as of March 31, 2010, and
changes during the year ended March 31, 2010, are presented below:





Number
      of
                      Shares
                    
                    
                    Weighted
      Average Fair
                      Value at Grant DateOutstanding
      at March 31, 2009
                    
                    
                    80,246
                    
                    
                    $
                    22.94Granted
      during the period
                    
                    
                    82,505
                    
                    
                    
                    27.04Vested
      during the period, net
                    
                    
                    (64,063
                    )
                    
                    
                    26.68Cancelled
      during the period
                    
                    
                    (14,461
                    )
                    
                    
                    26.41Outstanding
      at March 31, 2010
                    
                    
                    84,227
                    
                    
                    $
                    23.52





Total
share-based compensation included as a component of net income during the years
ended March 31, was as follows:





2010
                    
                    
                    2009
                    
                    
                    2008Share-based
      compensation related to equity classified units:Share-based
      compensation related to stock options
                    
                    $
                    3,281,556
                    
                    
                    
                    3,232,229
                    
                    
                    
                    3,937,925Share-based
      compensation related to restricted stock units
                    
                    
                    1,950,488
                    
                    
                    
                    1,685,616
                    
                    
                    
                    1,556,902Total
      share-based compensation related to equityclassified
      awards
                    
                    $
                    5,232,044
                    
                    
                    
                    4,917,845
                    
                    
                    
                    5,494,827




58





(17)
            Acquisitions





The
following table sets forth the acquisition activity of the Company for the last
three fiscal years:





2010
                    
                    
                    2009
                    
                    
                    2008($
      in thousands)Number
      of offices purchased
                    
                    
                    23
                    
                    
                    
                    22
                    
                    
                    
                    25Merged
      into existing offices
                    
                    
                    22
                    
                    
                    
                    11
                    
                    
                    
                    12Purchase
      Price
                    
                    $
                    3,742
                    
                    
                    
                    10,826
                    
                    
                    
                    4,977Tangible
      assets:Net
      loans
                    
                    
                    2,832
                    
                    
                    
                    9,083
                    
                    
                    
                    3,086Furniture,
      fixtures & equipment
                    
                    
                    3
                    
                    
                    
                    68
                    
                    
                    
                    128Other
                    
                    
                    3
                    
                    
                    
                    2
                    
                    
                    
                    72,838
                    
                    
                    
                    9,153
                    
                    
                    
                    3,221Excess
      of purchase price overfair
      value of net tangible assets
                    
                    $
                    904
                    
                    
                    
                    1,673
                    
                    
                    
                    1,756Customer
      lists
                    
                    
                    783
                    
                    
                    
                    1,360
                    
                    
                    
                    1,327Non-compete
      agreements
                    
                    
                    86
                    
                    
                    
                    85
                    
                    
                    
                    116Goodwill
                    
                    
                    35
                    
                    
                    
                    228
                    
                    
                    
                    313Total
      intangible assets
                    
                    $
                    904
                    
                    
                    
                    1,673
                    
                    
                    
                    1,756





The
Company evaluates each acquisition to determine if the transaction meets the
definition of a business combination.  Those transactions that meet
the definition of a business combination are accounted for as such under FASB
ASC Topic 805-10 (Prior authoritative literature: SFAS No. 141(R)) and all other
acquisitions are accounted for as asset purchases.  All acquisitions
have been with independent third parties.





When the
acquisition results in a new office, the Company records the transaction as a
business combination, since the office acquired will continue to generate loans.
The Company typically retains the existing employees and the office
location.  The purchase price is allocated to the estimated fair value
of the tangible assets acquired and to the estimated fair value of the
identified intangible assets acquired (generally non-compete agreements and
customer lists).  The remainder is allocated to
goodwill.  During the year ended March 31, 2010, one acquisition was
recorded as a business combination.





When the
acquisition is of a portfolio of loans only, the Company records the transaction
as an asset purchase. In an asset purchase, no goodwill is
recorded.  The purchase price is allocated to the estimated fair value
of the tangible and intangible assets acquired.  During the year ended
March 31, 2010, 22 acquisitions were recorded as asset
acquisitions.





The
Company’s acquisitions include tangible assets (generally loans and furniture
and equipment) and intangible assets (generally non-compete agreements, customer
lists, and goodwill), both of which are recorded at their fair values, which are
estimated pursuant to the processes described below.





Acquired
loans are valued at the net loan balance.  Given the short-term nature
of these loans, generally four months, and that these loans are subject to
continual repricing at current rates, management believes the net loan balances
approximate their fair value.





Furniture
and equipment are valued at the specific purchase price as agreed to by both
parties at the time of acquisition, which management believes approximates their
fair values.


59


Non-compete
agreements are valued at the stated amount paid to the other party for these
agreements, which the Company believes approximates the fair value. The fair
value of the customer lists is based on a valuation model that utilizes the
Company’s historical data to estimate the value of any acquired customer
lists.  In a business combination the remaining excess of the purchase
price over the fair value of the tangible assets, customer list, and non-compete
agreements is allocated to goodwill.  The offices the Company acquires
are small, privately owned offices, which do not have sufficient historical data
to determine attrition.  The Company believes that the customers
acquired have the same characteristics and perform similarly to its
customers.  Therefore, the Company utilized the attrition patterns of
its customers when developing the method.  This method is re-evaluated
periodically.





Customer
lists are allocated at an office level and are evaluated for impairment at an
office level when a triggering event occurs, in accordance with FASB ASC Topic
360-10-05 (Prior authoritative literature: SFAS No. 144).  If a
triggering event occurs, the impairment loss to the customer list is generally
the remaining unamortized customer list balance.  In most
acquisitions, the original fair value of the customer list allocated to an
office is generally less than $100,000, and management believes that in the
event a triggering event were to occur, the impairment loss to an unamortized
customer list would be immaterial.





The
results of all acquisitions have been included in the Company’s consolidated
financial statements since the respective acquisition dates.  The pro
forma impact of these purchases as though they had been acquired at the
beginning of the periods presented would not have a material effect on the
results of operations as reported.





(18)
            Fair
      Value





Effective
April 1, 2008, the first day of fiscal 2009, the Company adopted the provisions
of FASB ASC Topic 820 (Prior authoritative literature: SFAS No. 157, “Fair Value Measurements”) for
financial assets and liabilities, as well as any other assets and liabilities
that are carried at fair value on a recurring basis in financial statements.
FASB ASC Topic 820 defines fair value, establishes a framework for measuring
fair value and expands disclosures about fair value
measurements.  FASB ASC Topic 820 applies under other accounting
pronouncements in which the FASB has previously concluded that fair value is the
relevant measurement attribute.    Accordingly, FASB ASC
Topic 820 does not require any new fair value measurements.  Effective
April 1, 2009, the Company adopted the provisions of FASB ASC Topic 820 for
nonfinancial assets and liabilities which were previously deferred under the
provisions of FASB ASC Topic 820-10-65 (Prior authoritative literature: FSP FAS
157-2).





Assets
and liabilities measured at fair value are grouped in three levels. The levels
prioritize the inputs used to measure the fair value of the assets or
liabilities.  These levels are:





o
              Level
      1 –  Quoted prices (unadjusted) in active markets for identical
      assets or liabilities.





o
              Level
      2 –  Inputs other than quoted prices that are observable for
      assets and liabilities, either directly or indirectly. These inputs
      include quoted prices for similar assets or liabilities in active markets
      and quoted prices for identical or similar assets or liabilities in market
      that are less active.





o
              Level
      3 –  Unobservable inputs for assets or liabilities reflecting
      the reporting entity’s own
assumptions.





The
following financial liabilities were measured at fair value on a recurring basis
at March 31:





Fair
      Value Measurements UsingQuoted
      Pricesin
      Active
                    
                    
                    SignificantMarkets
      for
                    
                    
                    Other
                    
                    
                    SignificantIdentical
                    
                    
                    Observable
                    
                    
                    UnobservableAssets
                    
                    
                    Inputs
                    
                    
                    InputsMarch 31,
                    
                    
                    (Level 1)
                    
                    
                    (Level 2)
                    
                    
                    (Level 3)Interest
      rate swaps2010
                    
                    $
                    1,336,269
                    
                    
                    $
                    -
                    
                    
                    $
                    1,336,269
                    
                    
                    $
                    -2009
                    
                    $
                    2,443,666
                    
                    
                    $
                    -
                    
                    
                    $
                    2,443,666
                    
                    
                    $
                    -


60


The
Company’s interest rate swaps were valued using the “income approach” valuation
technique.  This method used valuation techniques to convert future
amounts to a single present amount.  The measurement was based on the
value indicated by current market expectations about those future
amounts.





There
were no assets or liabilities measured at fair value on a non recurring basis
during fiscal 2010.





Fair
Value of Long-Term Debt





The book
value and estimated fair value of our long-term debt was as follows (in
thousands):





March
      31,
                          
                          
                          March
      31,2010
                          
                          
                          2009Book
      value:Senior
      Notes Payable
                          
                          $
                          99,150
                          
                          
                          
                          113,310Convertible
      Notes, net ofdiscount
                          
                          
                          71,492
                          
                          
                          
                          83,732$
                          170,642
                          
                          
                          
                          197,042Estimated
      fair value:Senior
      Notes Payable
                          
                          $
                          99,150
                          
                          
                          
                          113,310Convertible
      Notes
                          
                          
                          73,389
                          
                          
                          
                          61,702$
                          172,539
                          
                          
                          
                          175,012





The
difference between the estimated fair value of long-term debt compared with its
historical cost reported in our Condensed Consolidated Balance Sheets at March
31, 2010 and March 31, 2009 relates primarily to market quotations for the
Company’s 3.0% Convertible Senior Subordinated Notes due October 1,
2011.





(19)
            Quarterly
      Information (Unaudited)





The
following sets forth selected quarterly operating data:





2010
                    
                    
                    2009First
                    
                    
                    Second
                    
                    
                    Third
                    
                    
                    Fourth
                    
                    
                    First
                    
                    
                    Second
                    
                    
                    Third
                    
                    
                    Fourth(Dollars
      in thousands, except earnings per share data)Total
      revenues
                    
                    $
                    100,230
                    
                    
                    
                    104,206
                    
                    
                    
                    112,310
                    
                    
                    
                    123,890
                    
                    
                    
                    88,421
                    
                    
                    
                    91,721
                    
                    
                    
                    99,161
                    
                    
                    
                    112,849Provision
      for loan losses
                    
                    
                    20,428
                    
                    
                    
                    25,156
                    
                    
                    
                    29,633
                    
                    
                    
                    15,082
                    
                    
                    
                    17,857
                    
                    
                    
                    23,307
                    
                    
                    
                    29,490
                    
                    
                    
                    14,822General
      and administrativeexpenses
                    
                    
                    53,333
                    
                    
                    
                    51,755
                    
                    
                    
                    55,537
                    
                    
                    
                    56,387
                    
                    
                    
                    48,790
                    
                    
                    
                    48,379
                    
                    
                    
                    51,716
                    
                    
                    
                    51,331Interest
      expense
                    
                    
                    3,110
                    
                    
                    
                    3,617
                    
                    
                    
                    3,756
                    
                    
                    
                    3,398
                    
                    
                    
                    3,609
                    
                    
                    
                    3,892
                    
                    
                    
                    3,928
                    
                    
                    
                    3,457Income
      tax expense
                    
                    
                    8,724
                    
                    
                    
                    9,066
                    
                    
                    
                    8,633
                    
                    
                    
                    19,360
                    
                    
                    
                    6,822
                    
                    
                    
                    6,197
                    
                    
                    
                    5,164
                    
                    
                    
                    16,898Net
      income
                    
                    $
                    14,635
                    
                    
                    
                    14,612
                    
                    
                    
                    14,751
                    
                    
                    
                    29,663
                    
                    
                    
                    11,343
                    
                    
                    
                    9,946
                    
                    
                    
                    8,863
                    
                    
                    
                    26,341Earnings
      per share:Basic
                    
                    $
                    .90
                    
                    
                    
                    .90
                    
                    
                    
                    .91
                    
                    
                    
                    1.80
                    
                    
                    
                    .70
                    
                    
                    
                    .61
                    
                    
                    
                    .55
                    
                    
                    
                    1.63Diluted
                    
                    $
                    .90
                    
                    
                    
                    .89
                    
                    
                    
                    .89
                    
                    
                    
                    1.76
                    
                    
                    
                    .68
                    
                    
                    
                    .60
                    
                    
                    
                    .54
                    
                    
                    
                    1.62





(20)
            Litigation





At March
31, 2010, the Company and certain of its subsidiaries have been named as
defendants in various legal actions arising from their normal business
activities in which damages in various amounts are claimed.  Although
the amount of any ultimate liability with respect to such matters cannot be
determined, the Company believes that any such liability will not have a
material adverse effect on the Company’s results of operations or financial
condition taken as a whole.


61


MANAGEMENT’S
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING





We are
responsible for establishing and maintaining adequate internal control over
financial reporting, as defined in Rules 13a – 15(f) under the Securities
Exchange Act of 1934.  We have assessed the effectiveness of internal
control over financial reporting as of March 31, 2010.  Our assessment
was based on criteria set forth by the Committee of Sponsoring Organizations of
the Treadway Commission, or COSO, Internal Control-Integrated
Framework.





Our
internal control over financial reporting is a process designed to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles.  Our internal control over
financial reporting includes those policies and procedures that:





(1)
            pertain
      to the maintenance of records that, in reasonable detail, accurately and
      fairly reflect our transactions and dispositions of the
      assets;





(2)
            provide
      reasonable assurance that transactions are recorded as necessary to permit
      preparation of financial statements in accordance with generally accepted
      accounting principles, and that our receipts and expenditures are being
      made only in accordance with authorizations of our management and board of
      directors: and





(3)
            provide
      reasonable assurance regarding prevention or timely detection of
      unauthorized acquisition, use, or disposition of our assets that could
      have a material effect on our financial
  statements.





Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements.  Also, any assumptions regarding
internal control over financial reporting in future periods based on an
evaluation of effectiveness in a prior period are subject to the risk that
controls may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may
deteriorate.





Based on
using the COSO criteria, we believe our internal control over financial
reporting as of March 31, 2010 was effective.





Our
independent registered public accounting firm has audited the consolidated
financial statements included in this Annual Report and has issued an
attestation report on the effectiveness of our internal control over financial
reporting, as stated in their report.





/s/ A. A. McLean III
              
              /s/ Kelly M. MalsonA.
      A. McLean III
              
              Kelly
      M. MalsonChairman
      and Chief Executive Officer
              
              Senior
      Vice President and Chief Financial
Officer


62


REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





The Board
of Directors


World
Acceptance Corporation:





We have
audited World Acceptance Corporation and subsidiaries’ (the “Company’s”)
internal control over financial reporting as of March 31, 2010, based on
criteria established in Internal Control – Integrated
Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO).The Company’s
management is responsible for maintaining effective internal control over
financial reporting and for its assessment of the effectiveness of internal
control over financial reporting, included in the accompanying Management’s
Report on Internal Control over Financial Reporting. Our responsibility is to
express an opinion on the Company’s internal control over financial reporting
based on our audit.





We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether effective
internal control over financial reporting was maintained in all material
respects. Our audit included obtaining an understanding of internal control over
financial reporting, assessing the risk that a material weakness exists, and
testing and evaluating the design and operating effectiveness of internal
control based on the assessed risk. Our audit also included performing such
other procedures as we considered necessary in the circumstances. We believe
that our audit provides a reasonable basis for our opinion.





A
company's internal control over financial reporting is a process designed to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles.  A company's internal
control over financial reporting includes those policies and procedures that (1)
pertain to the maintenance of records that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of
the company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial
statements.





Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements.  Also, projections of any evaluation
of effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.





In our
opinion, the Company maintained, in all material respects, effective internal
control over financial reporting as of March 31, 2010, based on
criteria established in Internal Control –Integrated
Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO).





We also
have audited, in accordance with the standards of the Public Company Accounting
Oversight Board (United States), the consolidated balance sheets of the Company
as of March 31, 2010 and 2009, and the related consolidated statements of
operations, shareholders’ equity and comprehensive income, and cash flows for
each of the years in the three-year period ended March 31, 2010, and our
report dated June 8, 2010expressed an
unqualified opinion on those consolidated financial statements.











Greenville,
South Carolina


June 8,
2010


63


REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





The Board
of Directors


World
Acceptance Corporation:





We have
audited the accompanying consolidated balance sheets of World Acceptance
Corporation and subsidiaries (the “Company”) as of March 31, 2010 and 2009, and
the related consolidated statements of operations, shareholders’ equity and
comprehensive income, and cash flows for each of the years in the three-year
period ended March 31, 2010. These consolidated financial statements are the
responsibility of the Company’s management. Our responsibility is to express an
opinion on these consolidated financial statements based on our
audits.





We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation.  We
believe that our audits provide a reasonable basis for our opinion.





In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of World Acceptance Corporation
and subsidiaries as of March 31, 2010 and 2009, and the results of their
operations and their cash flows for each of the years in the three-year period
ended March 31, 2010, in conformity with U.S. generally accepted accounting
principles.





We also
have audited, in accordance with the standards of the Public Company Accounting
Oversight Board (United States), World Acceptance Corporation’s internal control
over financial reporting as of March 31, 2010, based on criteria established in
Internal Control – Integrated
Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO), and our report dated June 8, 2010 expressed an
unqualified opinion on the effectiveness of the Company’s internal control over
financial reporting.











Greenville,
South Carolina


June 8,
2010


64





Item
      9.
            Changes
      in and Disagreements with Accountants on Accounting and Financial
      Disclosure





The
Company had no disagreements on accounting or financial disclosure matters with
its independent registered public accountants to report under this Item
9.





Item
      9A.
            Controls
      and Procedures





Evaluation of Disclosure Controls and
Procedures




Based on
management’s evaluation (with the participation of our Chief Executive Officer
(CEO) and Chief Financial Officer (CFO)), as of the end of the period covered by
this report, our CEO and CFO have concluded that our disclosure controls and
procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)), are effective
to provide reasonable assurance that information required to be disclosed by us
in reports that we file or submit under the Exchange Act is recorded, processed,
summarized, and reported within the time periods specified in SEC rules and
forms, and is accumulated and communicated to management, including our
principal executive officer and principal financial officer, as appropriate, to
allow timely decisions regarding required disclosure.




Changes in Internal Control Over
Financial Reporting




There
were no changes to our internal control over financial reporting (as defined in
Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during
the fourth fiscal quarter of the period covered by this report that have
materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.




Management Report on Internal Control
Over Financial Reporting




Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting (as defined in Rules 13a-15(f) and
15d-15(f) under the Exchange Act) to provide reasonable assurance regarding the
reliability of our financial reporting and the preparation of financial
statements for external purposes in accordance with U.S. generally accepted
accounting principles.




Management
assessed our internal control over financial reporting as of March 31, 2010, the
end of our fiscal year. Management based its assessment on criteria established
in Internal Control—Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Management’s assessment included
evaluation of elements such as the design and operating effectiveness of key
financial reporting controls, process documentation, accounting policies, and
our overall control environment.




Based on
our assessment, management has concluded that our internal control over
financial reporting was effective as of the end of the fiscal year to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external reporting purposes in
accordance with U.S. generally accepted accounting
principles.  Management’s Report on Internal Control over Financial
Reporting is included in Part II, Item 8 of this Form 10-K.  We
reviewed the results of management’s assessment with the Audit Committee of our
Board of Directors.




Our
independent registered public accounting firm, KPMG LLP, independently assessed
the effectiveness of the company’s internal control over financial reporting.
KPMG has issued an attestation report concurring with management’s assessment,
which is included at the end of Part II, Item 8 of this
Form 10-K.


65


Inherent Limitations on Effectiveness
of Controls




Our
management, including the CEO and CFO, does not expect that our disclosure
controls and procedures or our internal control over financial reporting will
prevent or detect all error and all fraud. A control system, no matter how well
designed and operated, can provide only reasonable, not absolute, assurance that
the control system’s objectives will be met. The design of a control system must
reflect the fact that there are resource constraints, and the benefits of
controls must be considered relative to their costs. Further, because of the
inherent limitations in all control systems, no evaluation of controls can
provide absolute assurance that misstatements due to error or fraud will not
occur or that all control issues and instances of fraud, if any, have been
detected. These inherent limitations include the realities that judgments in
decision-making can be faulty and that breakdowns can occur because of simple
error or mistake. Controls can also be circumvented by the individual acts of
some persons, by collusion of two or more people, or by management override of
the controls. The design of any system of controls is based in part on certain
assumptions about the likelihood of future events, and there can be no assurance
that any design will succeed in achieving its stated goals under all potential
future conditions. Projections of any evaluation of the effectiveness of
controls to future periods are subject to risks. Over time, controls may become
inadequate because of changes in conditions or deterioration in the degree of
compliance with policies or procedures.





Item
      9B.
            Other
      Information





None.


66


PART
III.





Item
10.    Directors, Executive Officers and Corporate
Governance





Information contained under the caption
“Election of Directors,” “Section 16(a) Beneficial Ownership Reporting
Compliance” and “Corporate Governance Matters – Code of Business Conduct and
Ethics,” “-  Director Nominations” and “-Audit Committee Financial
Experts” in the Proxy Statement is incorporated herein by reference in response
to this Item 10.  The information in response to this Item 10
regarding the executive officers of the Company is contained in Item 1, Part I
hereof under the caption "Executive Officers."





Item
11.    Executive Compensation





Information contained under the
caption "Executive Compensation" in the Proxy Statement, except for the
information therein under the subcaption "Report of The Compensation and Stock
Option Committee," which shall be deemed furnished, but not filed herewith, is
incorporated herein by reference in response to this Item 11.





Item
12.    Security Ownership of Certain Beneficial Owners,
Management and Related Stockholder Matters





Information contained under the
captions “Executive Compensation – “Equity Plan Compensation Information,”
"Ownership of Shares by Certain Beneficial Owners" and "Ownership of Common
Stock of Management" in the Proxy Statement is incorporated by reference herein
in response to this Item 12.





Item
13.    Certain Relationships and Related Transactions and
Director Independence





The Company had no reportable related
person disclosures in response to this Item 13.  Information contained
under the captions “Election of Directors” and “Corporate Governance Matters –
Director Independence” in the Proxy Statement is incorporated by reference in
response to this Item 13.





Item
14.    Principal Accountant Fees and Services





Information contained under the caption
“Appointment of Independent Registered Public Accountants,” in the Proxy
Statement except for the information therein under the subcaption “Report of the
Audit Committee of the Board of Directors,” is incorporated by reference herein
in response to this Item 14.





PART
IV.





Item
15.    Exhibits and Financial Statement Schedules





(1)
            The
      following consolidated financial statements of the Company and Report of
      Independent Registered Public Accounting Firm are filed
      herewith.





Consolidated
Financial Statements:





Consolidated
      Balance Sheets at March 31, 2010 and
2009





Consolidated
      Statements of Operations for the years ended March 31, 2010, 2009 and
      2008





Consolidated
      Statements of Shareholders' Equity and Comprehensive Income for the years
      ended March 31, 2010, 2009 and 2008





Consolidated
      Statements of Cash Flows for the years ended March 31, 2010, 2009 and
      2008





Notes
      to Consolidated Financial
Statements





Reports
of Independent Registered Public Accounting Firm





(2)
            Financial
      Statement Schedules





All
schedules for which provision is made in the applicable accounting regulations
of the Securities and Exchange Commission are not required under the related
instructions, are inapplicable, or the required information is included
elsewhere in the consolidated financial statements.


67


(3)
            Exhibits





The
following exhibits are filed as part of this report or, where so indicated, have
been previously filed and are incorporated herein by
reference.





Filed Herewith (*),Previously filed (+), oror Incorporated by
            
            CompanyExhibit
            
            
            
            Reference Previous
            
            RegistrationNumber
            
            Description
            
            Exhibit Number
            
            No. or Report3.1
            
            Second
      Amended and Restated Articles of Incorporation of the Company, as
      amended
            
            3.1
            
            333-1074263.2
            
            Fourth
      Amended and Restated Bylaws of the Company
            
            99.1
            
            8-03-07
      8-K4.1
            
            Specimen
      Share Certificate
            
            4.1
            
            33-428794.2
            
            Articles
      3, 4 and 5 of the Form of Company's Second Amended and Restated Articles
      of Incorporation (as amended)
            
            3.1
            
            333-1074264.3
            
            Article
      II, Section 9 of the Company’s Fourth Amended  And Restated
      Bylaws
            
            99.1
            
            8-03-07
      8-K4.4
            
            Amended
      and Restated Credit Agreement dated July 20, 2005
            
            4.4
            
            6-30-05
      10-Q4.5
            
            First
      Amendment to Amended and Restated Revolving Credit Agreement, dated as of
      August 4, 2006
            
            4.4
            
            6-30-06
      10-Q4.6
            
            Second
      Amendment to Amended and Restated Revolving Credit Agreement dated as of
      October 2, 2006
            
            10.1
            
            10-04-06
      8-K4.7
            
            Third
      Amendment to Amended and Restated Revolving Credit Agreement dated as of
      August 31, 2007
            
            10.1
            
            9-07-07
      8-K4.8
            
            Fourth
      Amendment to Amended and Restated Revolving Credit Agreement dated as of
      August 4, 2008
            
            4.8
            
            6-30-08
      10-Q4.9
            
            Fifth
      Amendment to Amended and Restated Revolving Credit Agreement dated as of
      January 28, 2009
            
            4.9
            
            12-31-08
      10-Q/A4.10
            
            Sixth
      Amendment to Amended and Restated Credit Agreement Dated as of July 31,
      2009
            
            4.10
            
            6-30-09
      10-Q4.11
            
            Subsidiary
      Security Agreement dated as of June 30, 1997, as amended through July 20,
      2005
            
            4.5
            
            9-30-05
      10-Q4.12
            
            Revised
      listing of Bank Commitments effective as of November 13, 2009, pursuant to
      the Sixth Amendment to Amended and  Restated Credit Agreement
      dated as of July 31, 2009 (the “Sixth Amendment”) (this listing updates
      the information previously disclosed in Schedule 1.1 to the Sixth
      Amendment, which was previously filed as Exhibit 4.10 to the Company’s
      report on Form 10-Q for the quarter ended June 30, 2009)
            
            4.11
            
            12-31-09
      10-Q4.13
            
            Company
      Security Agreement dated as of June 20, 1997, as amended through July 20,
      2005
            
            4.6
            
            9-30-05
      10-Q




68





Filed Herewith (*)or Incorporated by
                
                CompanyExhibit
                
                
                
                Reference Previous
                
                RegistrationNumber
                
                Description
                
                Exhibit Number
                
                No. or Report4.14
                
                Fourth
      Amendment to Subsidiary Amended and Restated Security Agreement, Pledge
      and Indenture of Trust (i.e. Subsidiary Security
Agreement)
                
                4.7
                
                6-30-05
      10-Q4.15
                
                Fourth
      Amendment to Amended and Restated Security Agreement Pledge and Indenture
      of Trust, dated as of June 30,  1997 (i.e., Company Security
      Agreement)
                
                4.10
                
                9-30-04
      10-Q4.16
                
                Fifth
      Amendment to Amended and Restated Security Agreement, Pledge and Indenture
      of Trust (i.e. Company Security Agreement)
                
                4.9
                
                6-30-05
      10-Q4.17
                
                Form
      of 3.00% Convertible Senior Subordinated Note due 2011
                
                4.1
                
                10-12-06
      8-K4.18
                
                Indenture,
      dated October 10, 2006 between the Company and U.S. Bank National
      Association, as Trustee
                
                4.2
                
                10-12-06
      8-K4.19
                
                Amended
      and Restated Guaranty Agreement dated as of June 30, 1997 (i.e.,
      Subsidiary Guaranty Agreement)
                
                4.17
                
                2009
      10-K4.20
                
                First
      Amendment to Subsidiary Guaranty Agreement, dated as of August 4,
      2008
                
                4.18
                
                2009
      10-K10.1+
                
                Employment
      Agreement of A. Alexander McLean, III, effective May 21,
    2007
                
                10.3
                
                2007
      10-K10.2+
                
                Employment
      Agreement of Mark C. Roland, effective as of May 21, 2007
                
                10.4
                
                2007
      10-K10.3+
                
                Employment
      Agreement of Kelly M. Malson, effective as of August 27,
    2007
                
                99.1
                
                8-29-07
      8-K10.4+
                
                Employment
      Agreement of Javier Sauza, effective as of June 1, 2008
                
                10.4
                
                2009
      10-K10.5+
                
                Securityholders'
      Agreement, dated as of September 19, 1991, between the Company and certain
      of its securityholders
                
                10.5
                
                33-4287910.6+
                
                Supplemental
      Income Plan
                
                10.7
                
                2000
      10-K10.7+
                
                Second
      Amendment to the Company’s Supplemental Income Plan
                
                10.15
                
                12-31-07
      10-Q10.8+
                
                Board
      of Directors Deferred Compensation Plan
                
                10.6
                
                2000
      10-K10.9
                
                Second
      Amendment to the Company’s Board of Directors Deferred Compensation Plan
      (2000)
                
                10.13
                
                12-31-07
      10-Q10.10+
                
                1994
      Stock Option Plan of the Company, as amended
                
                10.6
                
                1995
      10-K10.11+
                
                First
      Amendment to the Company’s 1992 and 1994 Stock Option
Plans
                
                10.10
                
                12-31-07
      10-Q





69





Filed Herewith (*),Previously filed (+), oror Incorporated by
              
              CompanyExhibit
              
              
              
              Reference Previous
              
              RegistrationNumber
              
              Description
              
              Exhibit Number
              
              No. or Report10.12+
              
              2002
      Stock Option Plan of the Company
              
              Appendix
      A
              
              Definitive
      Proxy Statement on Schedule 14A for the 2002 Annual
  Meeting10.13+
              
              First
      Amendment to the Company’s 2002 Stock Option Plan
              
              10.11
              
              12-31-07
      10-Q10.14+
              
              2005
      Stock Option Plan of the Company
              
              Appendix
      B
              
              Definitive
      Proxy Statement on Schedule 14A for the 2005  Annual
      Meeting10.15+
              
              First
      Amendment to the Company’s 2005 Stock Option Plan
              
              10.12
              
              12-31-07
      10-Q10.16+
              
              The
      Company’s Executive Incentive Plan
              
              10.6
              
              1994
      10-K10.17+
              
              The
      Company’s Retirement Savings Plan
              
              4.1
              
              333-1439910.18+
              
              The
      Company Retirement Savings Plan Fifth Amendment
              
              10.1
              
              12-31-08
      10-Q10.19+
              
              Executive
      Deferral Plan
              
              10.12
              
              2001
      10-K10.20+
              
              Second
      Amendment to the Company’s Executive Deferral Plan
              
              10.14
              
              12-31-07
      10-Q10.21+
              
              First
      Amended and Restated Board of Directors 2005 Deferred Compensation
      Plan
              
              10.16
              
              12-31-07
      10-Q10.22+
              
              First
      Amended and Restated 2005 Executive Deferral Plan
              
              10.17
              
              12-31-07
      10-Q10.23+
              
              Second
      Amended and Restated Company 2005 Supplemental Income Plan
              
              10.18
              
              12-31-07
      10-Q10.24+
              
              2008
      Stock Option Plan of the Company
              
              Appendix
      A
              
              Definitive
      Proxy Statement on  Schedule 14A for The 2008 Annual
      Meeting14
              
              Code
      of Ethics
              
              14
              
              2004
      10-K21
              
              Schedule
      of the Company’s Subsidiaries
              
              *23
              
              Consent
      of KPMG LLP
              
              *31.1
              
              Rule
      13a-14(a)/15d-14(a) Certification of Chief Executive
    Officer
              
              *31.2
              
              Rule
      13a-14(a)/15d-14(a) Certification of Chief Financial
    Officer
              
              *




70




Filed Herewith (*),Previously filed (+), oror Incorporated by
              
              CompanyExhibit
              
              
              
              Reference Previous
              
              RegistrationNumber
              
              Description
              
              Exhibit Number
              
              No. or Report32.1
              
              Section
      1350 Certification of Chief Executive Officer
              
              *32.2
              
              Section
      1350 Certification of Chief Financial Officer
              
              *





+
            Management
      Contract or other compensatory plan required to be filed under Item 15 of
      this report and Item 601 of Regulation S-K of the Securities and Exchange
      Commission.




71


SIGNATURES





Pursuant to the requirements of
Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.





WORLD
      ACCEPTANCE CORPORATIONBy:
              /s/  A. Alexander McLean
      IIIA.
      Alexander McLean, IIIChairman
      and Chief Executive OfficerDate:  
      June 8, 2010By:
              /s/ Kelly M. MalsonKelly
      M. MalsonSenior
      Vice President and Chief Financial OfficerDate:  
      June 8, 2010





Pursuant to the requirements of the
Securities Exchange Act of 1934, this report has been signed by the following
persons on behalf of the registrant and in the capacities and on the dates
indicated.





Signature/s/ A. Alexander McLean III
              
              /s/ Ken R. Bramlett Jr.A.
      Alexander McLean, III, Chairman of the Board and
              
              Ken
      R. Bramlett Jr., DirectorChief
      Executive Officer (Principal Executive Officer)Date;  June
      8, 2010
              
              Date:  June
      8, 2010/s/ Kelly M. Malson
              
              /s/ James R. GilreathKelly
      M. Malson, Senior Vice President and Chief
              
              James
      R. Gilreath, DirectorFinancial
      Officer (Principal Financial and AccountingOfficer)Date:  June
      8, 2010
              
              Date:  June
      8, 2010/s/ William S. Hummers
              
              /s/ Charles D. WayWilliam
      S. Hummers, III, Director
              
              Charles
      D. Way, DirectorDate:  June
      8, 2010
              
              Date:  June
      8, 2010/s/ Mark C. Roland
              
              /s/ Darrell WhitakerMark
      C. Roland, President and COO; Director
              
              Darrell
      Whitaker, DirectorDate:  June
      8, 2010
              
              Date:  June
      8, 2010


72