Interest Rate Swap Agreements

6 Months Ended

Sep. 30, 2011

Derivative Instruments and Hedging Activities Disclosure [Abstract]

6. Interest Rate Swap Agreements

6. Interest Rate Swap Agreements

As of September 30, 2011 and March 31, 2011, the Company did not have any outstanding interest rate swap agreements. Based on market conditions, the Company may or may not enter into new interest rate swap agreements during the current fiscal year. The swap agreements, in effect, converted a portion of the floating rate debt to a fixed rate, more closely matching the interest rate characteristics of finance receivables.

The following table summarizes the activity in the notional amounts of interest rate swaps:

	Six months ended September 30,
	2011		2010
Notional amounts at April 1	$	—	$	50,000,000
New contracts		—		—
Matured contracts		—		(30,000,000	)
Notional amounts at September 30	$	—	$	20,000,000

These interest rate swaps were previously designated as cash flow hedges. Based on credit market events that transpired in October 2008, the Company made an economic decision to elect the prime rate pricing option available under the Line for the month of October 2008. As a result, the critical terms of the interest rate swaps and hedged interest payments were no longer identical and the Company undesignated its interest rate swaps as cash flow hedges. Consequently, beginning in October 2008 changes in the fair value of interest rate swaps (unrealized gains and losses) were recorded in earnings. Unrealized losses previously recorded in accumulated other comprehensive loss were reclassified into earnings as interest payments on the Line affected earnings over the remaining term of the respective swap agreements. The Company did not use interest rate swaps for speculative purposes.

The locations and amounts of losses recognized in income are as follows:

	Three months ended September 30,					Six months ended September 30,
	2011		2010			2011		2010
Periodic change in fair value of interest rate swaps	$	—	$	228,319		$	—	$	621,517
Losses reclassified from accumulated other comprehensive loss		—		(90,491	)		—		(239,324	)
		—		137,828			—		382,193
Periodic settlement differentials included in interest expense		—		(245,755	)		—		(638,111	)
Pre-tax loss recognized in income	$	—	$	(107,927	)	$	—	$	(255,918	)

The Company recorded net realized gains and losses from the swap agreements in the interest expense line item of the consolidated statement of income. The following table summarizes the average variable rates received and average fixed rates paid under the swap agreements.

	Three months  ended September 30,					Six months  ended September 30,
	2011		2010			2011		2010
Average variable rate received		—		0.31	%		—		0.30	%
Average fixed rate paid		—		3.86	%		—		3.96	%

The following table reconciles net income with comprehensive income:

	Three months ended September 30,				Six months ended September 30,
	2011		2010		2011		2010
Net income	$	5,520,104	$	3,982,344	$	10,822,897	$	7,558,182
Reclassification adjustment for loss included in net income, net of tax benefit of $34,640 and $91,620, respectively.		—		55,851		—		147,704
Comprehensive income	$	5,520,104	$	4,038,195	$	10,822,897	$	7,705,886