Finance receivables consist of Contracts and Direct Loans and are detailed as follows:


	(In thousands)
	September 30, 2022			March 31, 2022
Finance receivables	$	175,406		$	178,786
Accrued interest receivable		2,354			2,315
Unearned dealer discounts		(6,535	)		(6,894	)
Unearned insurance commissions and fees		(2,313	)		(2,446	)
Purchase price discount		(125	)		(212	)
Finance receivables, net of unearned		168,787			171,549
Allowance for credit losses		(7,091	)		(2,949	)
Finance receivables, net	$	161,696		$	168,600

Contracts and Direct Loans each comprise a portfolio segment. The following tables present selected information on the entire portfolio of the Company:


	As of September 30,
Contract Portfolio	2022			2021
Average APR		22.8	%		22.9	%
Average discount		7.2	%		7.5	%
Average term (months)		50			50
Number of active contracts		18,059			20,927


	As of September 30,
Direct Loan Portfolio	2022			2021
Average APR		29.7	%		29.0	%
Average term (months)		27			27
Number of active contracts		7,264			5,006

The Company purchases Contracts from automobile dealers at a negotiated price that is less than the original principal amount being financed by the purchaser of the automobile. The Contracts are predominantly for used vehicles. As of September 30, 2022, the average model year of vehicles collateralizing the portfolio was a 2012 vehicle.

Direct Loans were typically ranging from $500 to $15 thousand and were generally secured by a lien on an automobile, watercraft or other permissible tangible personal property. The majority of Direct Loans was originated with current or former customers under the Company’s automobile financing program. The typical Direct Loan represented a better credit risk than the typical Contract due to the customer’s prior payment history with the Company; however, the underlying collateral was “typically” less valuable. In deciding whether to make a loan, the Company considered the individual’s credit history, job stability, income, and impressions created during a personal interview with a Company loan officer. Additionally, because most of the Direct Loans made by the Company to date have been made to current or former customers, the payment history of the borrower was a significant factor in making the loan decision. As of September 30, 2022, loans made by the Company pursuant to its Direct Loan program constituted approximately 16% of the aggregate principal amount of the Company’s loan portfolio. Changes in the allowance for credit losses for both Contracts and Direct Loans were driven primarily by consideration of the composition of the portfolio, current economic conditions, the estimated net realizable value of the underlying collateral, historical loan loss experience, delinquency, non-performing assets, and bankrupt accounts when determining management’s estimate of probable credit losses and adequacy of the allowance for credit losses. If the allowance for credit losses was determined to be inadequate, then an additional charge to the provision would be recorded to maintain adequate reserves based on management’s evaluation of the risk inherent in the loan portfolio. Additionally, credit loss trends over several reporting periods were utilized in estimating losses and overall portfolio performance. Conversely, the Company could identify abnormalities in the composition of the portfolio, which would indicate the calculation was overstated and management judgement may be required to determine the allowance of credit losses for both Contracts and Direct Loans.

Each portfolio segment consists of smaller balance homogeneous loans which are collectively evaluated for impairment.

The following table sets forth a reconciliation of the changes in the allowance for credit losses on Contracts and Direct Loans for the three months ended September 30, 2022 and 2021 (in thousands):


	Three months ended September 30, 2022									Six months ended September 30, 2022
	Contracts			Direct Loans			Consolidated			Contracts			Direct Loans			Consolidated
Balance at beginning of period	$	2,460		$	1,226		$	3,686		$	1,960		$	989		$	2,949
Provision for credit losses		7,511			1,395			8,906			10,615			1,935			12,550
Charge-offs		(6,144	)		(645	)		(6,789	)		(10,190	)		(994	)		(11,184	)
Recoveries		1,261			27			1,288			2,703			73			2,776
Balance at September 30, 2022	$	5,088		$	2,003		$	7,091		$	5,088		$	2,003		$	7,091

	Three months ended September 30, 2021									Six months ended September 30, 2021
	Contracts			Direct Loans			Consolidated			Contracts			Direct Loans			Consolidated
Balance at beginning of period	$	5,268		$	(18	)	$	5,250		$	6,001		$	153		$	6,154
Provision for credit losses		460			935			1,395			1,190			935			2,125
Charge-offs		(3,128	)		(182	)		(3,310	)		(5,901	)		(373	)		(6,274	)
Recoveries		1,116			11			1,127			2,426			31			2,457
Balance at September 30, 2021	$	3,716		$	746		$	4,462		$	3,716		$	746		$	4,462

The Company uses the trailing twelve-month charge-offs, and applies this calculated percentage to ending finance receivables to calculate estimated probable credit losses for purposes of determining the allowance for credit losses. The Company then takes into consideration the composition of its portfolio, current economic conditions, estimated net realizable value of the underlying collateral, historical loan loss experience, delinquency, non-performing assets, and bankrupt accounts and adjusts the above, if necessary, to determine management’s total estimate of probable credit losses and its assessment of the overall adequacy of the allowance for credit losses. By including recent trends such as delinquency, non-performing assets, and bankruptcy in its determination, management believes that the allowance for credit losses reflects the current trends of incurred losses within the portfolio and is better aligned with the portfolio’s performance indicators.

The following table is an assessment of the credit quality by creditworthiness:


	(In thousands)
	September 30, 2022						September 30, 2021
	Contracts		Direct Loans		Total		Contracts		Direct Loans		Total
Performing accounts	$	140,921	$	26,550	$	167,471	$	153,991	$	18,646	$	172,637
Non-performing accounts		6,828		827		7,655		3,949		198		4,147
Total		147,749		27,377		175,126		157,940		18,844		176,784
Chapter 13 bankruptcy accounts		246		34		280		214		15		229
Finance receivables	$	147,995	$	27,411	$	175,406	$	158,154	$	18,859	$	177,013

A performing account is defined as an account that is less than 61 days past due. The Company defines an automobile contract as delinquent when more than 10% of a payment contractually due by a certain date has not been paid immediately by the following due date, which date may have been extended within limits specified in the servicing agreements or as a result of a deferral. The period of delinquency is based on the number of days payments are contractually past due, as extended where applicable.

In certain circumstances, the Company will grant obligors one-month payment extensions. The only modification of terms in those circumstances is to advance the obligor’s next due date by one month and extend the maturity date of the receivable. There are no other concessions, such as a reduction in interest rate, or forgiveness of principal or of accrued interest. Accordingly, the Company considers such extensions to be insignificant delays in payments rather than troubled debt restructurings.

A non-performing account is defined as an account that is contractually delinquent for 61 days or more or is a Chapter 13 bankruptcy account for which the accrual interest income has been suspended. The Company’s charge-off policy is to charge off an account in the month the contract becomes 121 days contractually delinquent.

In the event an account is dismissed from bankruptcy, the Company will decide whether to begin repossession proceedings or to allow the customer to make regularly scheduled payments.

The following tables present certain information regarding the delinquency rates experienced by the Company with respect to Contracts and Direct Loans, excluding Chapter 13 bankruptcy accounts:


	Contracts
	(In thousands, except percentages)
	Balance Outstanding		30 – 59 days			60 – 89 days			90 – 119 days			120+			Total
September 30, 2022	$	147,749	$	9,769		$	4,492		$	2,303		$	33		$	16,597
				6.61	%		3.04	%		1.56	%		0.02	%		11.23	%

March 31, 2022	$	154,143	$	7,097		$	2,936		$	1,183		$	48		$	11,264
				4.60	%		1.90	%		0.77	%		0.03	%		7.31	%

September 30, 2021	$	157,940	$	7,990		$	2,905		$	1,024		$	19		$	11,938
				5.06	%		1.84	%		0.65	%		0.01	%		7.56	%


	Direct Loans
	Balance Outstanding		30 – 59 days			60 – 89 days			90 – 119 days			120+			Total
September 30, 2022	$	27,377	$	1,169		$	517		$	302		$	8		$	1,996
				4.27	%		1.89	%		1.10	%		0.03	%		7.29	%

March 31, 2022	$	24,376	$	607		$	197		$	77		$	—		$	881
				2.49	%		0.81	%		0.32	%		—			3.61	%

September 30, 2021	$	18,844	$	416		$	145		$	53		$	—		$	614
				2.21	%		0.77	%		0.28	%		—			3.26	%