The Grand Finale of Our “New Banks” Earnings Season – World Acceptance

• Posted by Danny
• on July 27th, 2011

The fourth and final of our New Banks of America to report, World Acceptance spins off a record Q1

Unlike First Cash ($FCFS), Cash America ($CSH) and EZCorp ($EZPW), our last but not least of the New Banks of America doesn’t operate any pawn shops. They do just about everything else under the sun though for the would-be small loan seeker.

Founded in 1962, World Acceptance ($WRLD) today offers “short-term small loans and medium-term larger loans” throughout parts of the U.S. and Mexico. They also provide credit insurance products and tax preparation services.

Currently ranked #32 in the BeanScreen, we’ve owned shares in WRLD for almost two years now. We sold some off in early 2010 and again this past February, keeping a core position as the fundamentals have remained fairly strong.

 

Here’s the latest figures on their Q1 from this morning:

• Diluted EPS +11.4% YoY to record $1.27
• Net income +7.8% YoY
• Gross loans outstanding +13.8% YoY to record $939 million
• Total revenues +11.6% YoY
• Interest and fee income +11.7% YoY

Some words from the CEO:

“World Acceptance’s record first quarter benefited from continued strong loan demand, our focus on expense control, the contribution from new offices in domestic markets and Mexico, and our close management of credit risks. Our excellent growth in earnings per share also benefited from our stock repurchase program.  We used our strong cash flow to repurchase 732,600 shares of stock during the quarter.”

Well that wraps up the earnings season for our fab four. Overall, it was an impressive showing. FCFS, CSH and WRLD all managed to meet or beat estimates and crank out strong year-over-year reports. Our bellwether EZPW unleashed a great report as well, but just missed estimates – a big no-no after all the fanfare and high expectations the industry has received in recent months.

Going forward we remain optimistic about all four names as the current economic climate continues to favor the pawn shop/small loan players. With many of the “old banks” such as $BAC, $C and $WFC still bogged down in debt, new rules and deleveraging issues, today’s consumers can more easily count on the “new banks” for their short term financial needs.

 

sources:  WorldAcceptance.com

“World Acceptance Corporation Reports Record First Quarter” – Yahoo! Finance

disclosure:  we currently own shares in WRLD, CSH and EZPW

 

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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