World Acceptance Corporation Reports Record Second Quarter

• Press Release
• Source: World Acceptance Corporation
• On 6:30 am EDT, Thursday October 29, 2009

GREENVILLE, S.C., Oct. 29 /PRNewswire-FirstCall/ --- World Acceptance Corporation (Nasdaq: WRLD - News) today reported record financial results for its second fiscal quarter ended September 30, 2009.

Net income for the second quarter rose 46.9% to $14.6 million compared with $9.9 million for the same quarter of the prior year. Net income per diluted share increased 48.3% to $0.89 in the second quarter of fiscal 2010 compared with $0.60 in the prior year quarter. Net income for the quarter ended September 30, 2008, was originally reported as $10.7 million, or $0.65 per share, and was subsequently revised due to a change in accounting principle for the Company's convertible notes.

Total revenues increased to $104.2 million in the second quarter of fiscal 2010, a 13.6% increase over the $91.7 million reported in the second quarter last year. The primary driver for the growth in revenue was a 13.6% increase in average net loans. Gross loans outstanding increased 13.1% to $754.9 million at September 30, 2009, up from $667.2 million at September 30, 2008.

"I am very pleased with World Acceptance's strong growth in revenue and net income in the second quarter," stated Sandy McLean, CEO. "While we do not expect quarter over quarter net income gains in coming quarters to be as high as this quarter, our improved second quarter results continued our excellent first quarter's performance and benefited from increased loan balances outstanding, ongoing focus on expense control, and close management of credit risks. In addition, loan demand remains strong as loan volume increased 14.7% compared to the prior year second fiscal quarter."

"The Company has also benefited from a slight improvement in its credit losses during the quarter," continued Mr. McLean. "Our net charge-offs decreased to 16.2% of average net loans on an annualized basis during the quarter compared with 17.0% in the second quarter of last year, while 61+ days past due loans on a recency basis remained flat at 3.3% at the end of both quarters."

The provision for loan losses rose 7.9% to $25.2 million in the second quarter of fiscal 2010 compared with the second quarter of fiscal 2009. "We remain focused on monitoring our loan portfolio in light of the difficult economy and we believe that our allowance for loan losses is adequate based on the current outlook," noted Mr. McLean.

The Company's general and administrative expenses decreased from 52.7% of total revenues to 49.7% during the current fiscal quarter. The improvement benefited from the strong growth in revenues and reduced start-up costs associated with a lower number of branch openings in the second quarter of 2010 compared with the prior year. World Acceptance opened 17 new offices in the second quarter of 2010 compared with 35 offices in the same quarter last year.

Other key return ratios for the second quarter included a 10.3% return on average assets (annualized) and an annualized return on average equity of 18.2%.

Six-Month Results

For the first six-months of the fiscal year, net income rose 37.4% to $29.2 million compared with $21.3 million for the six months ended September 30, 2008. Fully diluted net income per share rose 38.8% to $1.79 in fiscal 2010 compared with $1.29 for the first six months of fiscal 2009. The fiscal 2009 results were restated from net income of $22.7 million and $1.37 per dilutive share due to a change in accounting principle.

Total revenues for the first six-months of fiscal 2010 rose 13.5% to $204.4 million compared with $180.1 million during the corresponding period of the previous year. Net charge-offs increased $3.1 million, or 8.3%, compared to the prior year first six-months. Annualized net charge-offs as a percent of average net loans were 15.1% compared to 15.8% during the prior year six-month period.

During the first six-months of the fiscal year, the Company opened 23 offices and closed 1 office, resulting in a total of 966 offices at September 30, 2009.

About World Acceptance Corporation

World Acceptance Corporation is one of the largest small-loan consumer finance companies, operating 966 offices in 11 states and Mexico. It is also the parent company of ParaData Financial Systems, a provider of computer software solutions for the consumer finance industry.

Second Quarter Conference Call

The senior management of World Acceptance Corporation will be discussing these results in its quarterly conference call to be held at 10:00 a.m. Eastern time today. Interested parties may participate in this call by dialing 1-877-780-3379, passcode 4696758. A simulcast of the conference call is also available on the Internet at http://tinyurl.com/ykxryad or www.streetevents.com. The call will be available for replay on the Internet for approximately 30 days.

This press release may contain various "forward-looking statements" within the meaning of Section 27A of the Securities Exchange Act of 1934, as amended, that represent the Company's expectations or beliefs concerning future events. Such forward-looking statements are about matters that are inherently subject to risks and uncertainties. Factors that could cause actual results or performance to differ from the expectations expressed or implied in such forward-looking statements include the following: the continuation or worsening of adverse conditions in the global and domestic credit markets and uncertainties regarding, or the impact of governmental responses to those conditions; changes in interest rates; risks inherent in making loans, including repayment risks and value of collateral, which risks may increase in light of adverse or recessionary economic conditions; recently-enacted or proposed legislation; the timing and amount of revenues that may be recognized by the Company; changes in current revenue and expense trends (including trends affecting delinquencies and charge-offs); changes in the Company's markets and general changes in the economy (particularly in the markets served by the Company). Such factors are discussed in greater detail in the Company's filings with the Securities and Exchange Commission. World Acceptance Corporation is not responsible for updating the information contained in this press release beyond the publication date, or for changes made to this document by wire services or Internet services.

                         World Acceptance Corporation

                    Consolidated Statements of Operations
    --------------------------------------------------------------------
    (unaudited and in thousands, except per share amounts)

                                    Three Months Ended  Six Months Ended
                                        September 30,      September 30,
                                        -------------      -------------
                                        2009     2008      2009     2008
                                        ----     ----      ----     ----

    Interest & fees                    $91,540 $80,054 $176,608 $156,403
    Insurance & other                   12,666  11,667   27,828   23,739
                                        ------  ------   ------   ------
      Total revenues                   104,206  91,721  204,436  180,142
    Expenses:
      Provision for loan losses         25,156  23,307   45,584   41,164
      General and administrative
       expenses
        Personnel                       33,912  31,200   70,203   64,516
        Occupancy & equipment            7,113   6,478   13,817   12,532
        Data processing                    494     581    1,028    1,170
        Advertising                      2,449   2,532    4,821    5,241
        Intangible amortization            568     623    1,133    1,224
        Other                            7,219   6,965   14,086   12,486
                                         -----   -----   ------   ------
                                        51,755  48,379  105,088   97,169
      Interest expense                   3,617   3,892    6,727    7,501
                                         -----   -----    -----    -----
        Total expenses                  80,528  75,578  157,399  145,834
                                        ------  ------  -------  -------
    Income before taxes                 23,678  16,143   47,037   34,308
    Income taxes                         9,066   6,197   17,790   13,019
                                         -----   -----   ------   ------
    Net income                         $14,612  $9,946  $29,247  $21,289
                                       =======  ======  =======  =======
    Diluted earnings per share           $0.89   $0.60    $1.79    $1.29
                                         =====   =====    =====    =====
    Diluted weighted average
     shares outstanding                 16,418  16,493   16,370   16,535
                                        ======  ======   ======   ======



                         Consolidated Balance Sheets
    --------------------------------------------------------------------
                        (unaudited and in thousands)

                                      Sept. 30,   March 31,     Sept. 30,
                                         2009       2009           2008
                                         ----       ----           ----
        ASSETS
    Cash                                $7,287     $6,260         $8,070
    Gross loans receivable             754,854    671,176        667,179
      Less: Unearned interest &
       fees                           (198,899)  (172,743)      (175,251)
      Allowance for loan losses        (43,682)   (38,021)       (38,121)
                                       -------    -------        -------
        Loans receivable, net          512,273    460,412        453,807
    Property and equipment, net         23,121     23,060         22,970
    Deferred income taxes               12,975     12,251         12,630
    Goodwill                             5,581      5,581          5,384
    Intangibles                          8,046      8,988          9,927
    Other assets                        10,249      9,542          9,286
                                        ------      -----          -----
                                      $579,532   $526,094       $522,074
                                      ========   ========       ========

        LIABILITIES AND SHAREHOLDERS'
         EQUITY
    Liabilities:
      Notes payable                    222,265    197,041        241,235
      Income tax payable                 4,761     11,413            368
      Accounts payable and
       accrued expenses                 23,680     21,305         16,406
                                        ------     ------         ------
        Total liabilities              250,706    229,759        258,009
    Shareholders' equity               328,826    296,335        264,065
                                       -------    -------        -------
                                      $579,532   $526,094       $522,074
                                      ========   ========       ========



                      Selected Consolidated Statistics
    --------------------------------------------------------------------
                            (dollars in thousands)

                                Three Months Ended      Six Months Ended
                                  September 30,            September 30,
                                ------------------       ---------------
                                  2009      2008         2009       2008
                                  ----      ----         ----       ----
    Expenses as a percent
     of total revenues:
      Provision for loan losses    24.1%     25.4%       22.3%      22.9%
      General and administrative
       expenses                    49.7%     52.7%       51.4%      53.9%
      Interest expense              3.5%      4.2%        3.3%       4.2%

    Average gross
     loans receivable          $744,099  $653,671    $719,910   $634,097

    Average loans receivable   $547,482  $482,130    $530,906   $468,318

    Loan volume                $556,201  $484,806  $1,109,550   $945,457

    Net charge-offs as
     percent of average loans      16.2%     17.0%       15.1%      15.8%

    Return on average assets       10.3%      7.8%       10.5%       8.5%

    Return on average equity       18.2%     15.5%       18.7%      16.8%

    Offices opened (closed)
     during the period, net          17        35          22         69

    Offices open at end of period   966       907         966        907

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