Regional Management Corp. Announces Second Quarter 2024 Results

Rhea-AI Summary

Regional Management Corp. (NYSE: RM) announced strong Q2 2024 results, with net income of $8.4 million and diluted EPS of $0.86, up 37% from $0.63 in the prior-year period. The company reported year-over-year growth of 7% in customer accounts, originations, and revenue, driven by a 5% increase in ending net receivables and an 80 bps increase in total revenue yield. Key highlights include:

- Net finance receivables reached $1.8 billion, up 5.0% year-over-year
- Total revenue increased to $143.0 million, up 7.1% from the prior-year period
- 30+ day contractual delinquency rate of 6.9% as of June 30, 2024
- Operating expense ratio of 13.8%
- Declared a dividend of $0.30 per common share for Q3 2024

The company maintains a strong liquidity position with $149.4 million available and a funded debt-to-equity ratio of 4.0 to 1.0.

Positive

• Net income increased by 40% compared to Q2 2023, reaching $8.4 million
• Diluted EPS grew 37% year-over-year to $0.86
• Total revenue increased by 7.1% to $143.0 million
• Net finance receivables grew by 5.0% to $1.8 billion
• Interest and fee yield increased by 110 basis points year-over-year
• Small loan portfolio grew by $61 million, or 14% year-over-year
• Net credit loss rate improved by 40 basis points from the prior year
• 30+ day delinquency rate remained stable at 6.9%, improving 20 basis points sequentially

Negative

• Provision for credit losses increased by $1.3 million, or 2.4%, from the prior-year period
• General and administrative expenses increased by $3.2 million from the prior-year period

Insights

Financial Analyst

Regional Management Corp.'s Q2 2024 results demonstrate solid financial performance and strategic growth. The company reported $8.4 million in net income, translating to a diluted EPS of $0.86, a 37% increase year-over-year. This growth is primarily driven by a 5% increase in net receivables and an 80 basis point improvement in total revenue yield.

Key highlights include:

• Net finance receivables grew to $1.8 billion, up 5.0% year-over-year
• Total revenue increased by 7.1% to $143.0 million
• Interest and fee yield improved by 110 basis points
• 30+ day contractual delinquency rate remained stable at 6.9%
• Operating expense ratio was contained at 13.8%

The company's strategic focus on small loans and higher APR products is paying off, with small loan net finance receivables growing by 13.7% year-over-year. This shift in portfolio composition, along with improved pricing and credit performance, has contributed to the yield improvement.

While the provision for credit losses increased slightly, the net credit loss rate improved by 40 basis points year-over-year, indicating better overall credit quality. The company's liquidity position remains strong, with $564 million in unused capacity on its revolving credit facilities.

Overall, Regional Management Corp. appears well-positioned to navigate the current economic environment, with a focus on controlled growth and credit quality management. The declared dividend of $0.30 per share for Q3 2024 further underscores the company's financial stability and commitment to shareholder returns.

Credit Risk Analyst

From a credit risk perspective, Regional Management Corp.'s Q2 2024 results present a mixed but generally positive picture. The 6.9% 30+ day contractual delinquency rate, while stable year-over-year, shows a 20 basis point improvement sequentially. This suggests that the company's credit risk management strategies are effective in the face of ongoing inflationary pressures.

The 40 basis point improvement in the annualized net credit loss rate (now at 12.7%) is particularly noteworthy. This improvement comes despite the expansion of the higher-risk small loan portfolio, which typically carries higher delinquency and loss rates. The company's ability to reduce overall credit losses while growing this segment indicates strong underwriting and collection practices.

However, investors should note that the allowance for credit losses, at 10.5% of net finance receivables, has decreased by 20 basis points sequentially. While this reflects improved portfolio quality and expectations of better macroeconomic conditions, it also slightly reduces the buffer against potential future losses.

The growth in loans with APRs above 36% (now 17.2% of the portfolio, up from 13.9%) warrants attention. While these higher-rate loans can boost profitability, they also typically come with increased credit risk. The company's ability to manage this risk will be important for maintaining credit quality as this segment grows.

Overall, the credit risk profile appears manageable, with the company demonstrating its ability to balance growth in higher-margin products with prudent risk management. However, continued vigilance will be necessary, particularly if economic conditions deteriorate.

Market Research Analyst

Regional Management Corp.'s Q2 2024 results reflect a strategic positioning that's paying off in the current market environment. The company's focus on small loans and higher APR products is a savvy move, capitalizing on a segment of the market that larger lenders often overlook.

The 13.7% year-over-year growth in small loan net finance receivables, now comprising 28.5% of the total portfolio, indicates strong demand in this segment. This shift towards smaller, higher-yield loans is likely driven by consumers seeking alternatives to traditional bank loans in a tight credit environment.

The increase in loans with APRs above 36%, now at 17.2% of the portfolio, suggests that Regional Management is successfully targeting a higher-risk, higher-reward market segment. This strategy appears to be working, as evidenced by the 110 basis point improvement in interest and fee yield.

The company's controlled growth approach, with total loan originations up 6.8% year-over-year, demonstrates a balance between expansion and risk management. This cautious stance is prudent given the uncertain economic outlook and ongoing inflationary pressures.

Regional Management's performance relative to the broader consumer finance sector is strong. The 7.1% revenue growth and 37% increase in diluted EPS outpace many competitors, indicating effective execution of its niche strategy.

Looking ahead, the company's plans to open ten new branch locations and expand its auto-secured loan portfolio suggest confidence in its growth trajectory. However, the success of this expansion will depend on maintaining credit quality while penetrating new markets.

- Net income of $8.4 million and diluted earnings per share of $0.86, up 37% from $0.63 in the prior-year period -

- Year-over-year growth in customer accounts, originations, and revenue of 7%; revenue growth driven by 5% ending net receivables growth and 80 bps increase in total revenue yield -

- 30+ day contractual delinquency rate of 6.9% as of June 30, 2024 -

- Continued expense discipline with operating expense ratio of 13.8% -

GREENVILLE, S.C.--(BUSINESS WIRE)-- Regional Management Corp. (NYSE: RM), a diversified consumer finance company, today announced results for the second quarter ended June 30, 2024.

“We are very pleased with our quarterly and year-to-date results,” said Robert W. Beck, President and Chief Executive Officer of Regional Management Corp. “We delivered $8.4 million of net income in the second quarter, or $0.86 of diluted EPS. We grew our portfolio by $29 million sequentially to $1.8 billion in the quarter, up 5.0% from the prior year. Our interest and fee yield increased 110 basis points year-over-year from a combination of increased pricing, growth of our higher-margin small loan portfolio, and improved credit performance. Our larger portfolio and stronger yield combined to drive total revenue to $143 million in the second quarter, up 7% from last year. At the same time, we have maintained a tight grip on G&A expense while still investing in our growth and strategic initiatives. Together, these strong line item outcomes drove net income up 40% compared to the second quarter of last year.”

“Along with our strong first half results, we continue to carefully manage our portfolio’s credit quality and performance,” added Mr. Beck. “Our 30+ day delinquency rate remained stable at 6.9% at the end of the quarter, 20 basis points better sequentially. Our net credit loss rate improved 40 basis points from the prior year, as the front book continues to perform in line with our expectations and makes up a larger portion of our total portfolio. We grew our small loan portfolio by $61 million, or 14%, year-over-year, representing more than 70% of our total portfolio growth over the past year. Our portfolio of loans with greater than 36% APR grew from 14% to 17% of the total portfolio over that same time period. While these portfolios naturally come with higher delinquencies and credit losses, it is an excellent trade given the stronger margins and bottom-line returns that the portfolios generate.”

“We had a very successful first half of 2024, posting strong top- and bottom-line results despite the continued impacts of inflation on credit performance,” continued Mr. Beck. “We remain well-positioned to operate effectively through the current economic cycle. As we expect credit losses to improve in the second half of the year, we are excited to begin increasing our investment in our strategic initiatives and portfolio growth, including through the opening of ten new branch locations before year-end and continued expansion of our higher-margin and auto-secured loan portfolios. We look forward to continuing to deliver strong returns to our shareholders while also investing in the business in a way that will enable us to achieve additional, sustainable growth, improved credit performance, and greater productivity, operating efficiency, and leverage over the long-term.”

Second Quarter 2024 Highlights

• Net income for the second quarter of 2024 was $8.4 million and diluted earnings per share was $0.86, up 37% from $0.63 in the prior-year period.

• Net finance receivables as of June 30, 2024 were $1.8 billion, an increase of $84.8 million, or 5.0%, from the prior-year period.
  • Large loan net finance receivables of $1.3 billion increased $28.0 million, or 2.3%, from the prior-year period and represented 71.4% of the total loan portfolio, compared to 73.3% in the prior-year period.
  • Small loan net finance receivables of $505.6 million increased $61.1 million, or 13.7%, from the prior-year period and represented 28.5% of the total loan portfolio, compared to 26.3% in the prior-year period.
  • Net finance receivables with annual percentage rates (APRs) above 36% increased to 17.2% of the portfolio from 13.9% in the prior-year period.
  • Total loan originations were $426.1 million in the second quarter of 2024, an increase of $27.1 million, or 6.8%, from the prior-year period, due to controlled growth from credit-tightening actions.

• Total revenue for the second quarter of 2024 was $143.0 million, an increase of $9.5 million, or 7.1%, from the prior-year period, primarily due to an increase in interest and fee income of $9.8 million related to higher average net finance receivables and 110 basis points of higher interest and fee yield compared to the prior-year period.
  • The increase in interest and fee yield is attributable to increased pricing, growth of the higher-margin small loan portfolio, and improved credit performance.
  • Total revenue yield increased 80 basis points year-over-year, 30 basis points lower than the increase in interest and fee yield due to lower insurance revenues.

• Provision for credit losses for the second quarter of 2024 was $53.8 million, an increase of $1.3 million, or 2.4%, from the prior-year period, due to higher net credit losses from higher average net receivables ($0.6 million) and a lower provision release compared to the prior-year period ($0.7 million).
  • Annualized net credit losses as a percentage of average net finance receivables for the second quarter of 2024 were 12.7%, a 40 basis point improvement compared to 13.1% in the prior-year period. The second quarter 2024 net credit loss rate is inclusive of a 20 basis point impact from growth of the higher-rate, small loan portfolio.
  • The provision for credit losses for the second quarter of 2024 included a reserve reduction of $1.7 million primarily due to changes in estimated future macroeconomic impacts on credit losses, partially offset by portfolio growth during the quarter.
  • Allowance for credit losses was $185.4 million as of June 30, 2024, or 10.5% of net finance receivables, a 20 basis point decrease sequentially from 10.7% due to improved portfolio credit quality and expectations for improving future macroeconomic conditions.

• As of June 30, 2024, 30+ day contractual delinquencies totaled $122.7 million, or 6.9% of net finance receivables, a 20 basis point improvement sequentially and comparable to June 30, 2023. The second quarter 2024 delinquency rate is inclusive of a 10 basis point impact from growth of the higher-rate, small loan portfolio.

• General and administrative expenses for the second quarter of 2024 were $60.1 million, an increase of $3.2 million from the prior-year period. The operating expense ratio (annualized general and administrative expenses as a percentage of average net finance receivables) for the second quarter of 2024 was 13.8%. The prior-year period included an insurance settlement benefit, improving general and administrative expenses and the operating expense ratio in the prior-year period by $1.0 million and 20 basis points, respectively.

Third Quarter 2024 Dividend

The company’s Board of Directors has declared a dividend of $0.30 per common share for the third quarter of 2024. The dividend will be paid on September 12, 2024 to shareholders of record as of the close of business on August 21, 2024. The declaration and payment of any future dividend is subject to the discretion of the Board of Directors and will depend on a variety of factors, including the company’s financial condition and results of operations.

Liquidity and Capital Resources

As of June 30, 2024, the company had net finance receivables of $1.8 billion and debt of $1.4 billion. The debt consisted of:

• $145.7 million on the company’s $355 million senior revolving credit facility,
• $21.4 million on the company’s aggregate $375 million revolving warehouse credit facilities, and
• $1.2 billion through the company’s asset-backed securitizations.

As of June 30, 2024, the company’s unused capacity to fund future growth on its revolving credit facilities (subject to the borrowing base) was $564 million, or 77.3%, and the company had available liquidity of $149.4 million, including unrestricted cash on hand and immediate availability to draw down cash from its revolving credit facilities. As of June 30, 2024, the company’s fixed-rate debt as a percentage of total debt was 88%, with a weighted-average coupon of 4.2% and a weighted-average revolving duration of 1.2 years.

The company had a funded debt-to-equity ratio of 4.0 to 1.0 and a stockholders’ equity ratio of 19.3%, each as of June 30, 2024. On a non-GAAP basis, the company had a funded debt-to-tangible equity ratio of 4.2 to 1.0, as of June 30, 2024. Please refer to the reconciliations of non-GAAP measures to comparable GAAP measures included at the end of this press release.

Conference Call Information

Regional Management Corp. will host a conference call and webcast today at 5:00 PM ET to discuss these results.

The dial-in number for the conference call is (855) 327-6837 (toll-free) or (631) 891-4304 (direct). Please dial the number 10 minutes prior to the scheduled start time.

*** A supplemental slide presentation will be made available on Regional’s website prior to the earnings call at www.RegionalManagement.com. ***

In addition, a live webcast of the conference call will be available on Regional’s website at www.RegionalManagement.com.

A webcast replay of the call will be available at www.RegionalManagement.com for one year following the call.

About Regional Management Corp.

Regional Management Corp. (NYSE: RM) is a diversified consumer finance company that provides attractive, easy-to-understand installment loan products primarily to customers with limited access to consumer credit from banks, thrifts, credit card companies, and other lenders. Regional Management operates under the name “Regional Finance” online and in branch locations in 19 states across the United States. Most of its loan products are secured, and each is structured on a fixed-rate, fixed-term basis with fully amortizing equal monthly installment payments, repayable at any time without penalty. Regional Management sources loans through its multiple channel platform, which includes branches, centrally managed direct mail campaigns, digital partners, and its consumer website. For more information, please visit www.RegionalManagement.com.

Forward-Looking Statements

This press release may contain various “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical fact but instead represent Regional Management Corp.’s expectations or beliefs concerning future events. Forward-looking statements include, without limitation, statements concerning financial outlooks or future plans, objectives, goals, projections, strategies, events, or performance, and underlying assumptions and other statements related thereto. Words such as “may,” “will,” “should,” “likely,” “anticipates,” “expects,” “intends,” “plans,” “projects,” “believes,” “estimates,” “outlook,” and similar expressions may be used to identify these forward-looking statements. Such forward-looking statements speak only as of the date on which they were made and are about matters that are inherently subject to risks and uncertainties, many of which are outside of the control of Regional Management. As a result, actual performance and results may differ materially from those contemplated by these forward-looking statements. Therefore, investors should not place undue reliance on forward-looking statements.

Factors that could cause actual results or performance to differ from the expectations expressed or implied in forward-looking statements include, but are not limited to, the following: managing growth effectively, implementing Regional Management’s growth strategy, and opening new branches as planned; Regional Management’s convenience check strategy; Regional Management’s policies and procedures for underwriting, processing, and servicing loans; Regional Management’s ability to collect on its loan portfolio; Regional Management’s insurance operations; exposure to credit risk and repayment risk, which risks may increase in light of adverse or recessionary economic conditions; the implementation of evolving underwriting models and processes, including as to the effectiveness of Regional Management's custom scorecards; changes in the competitive environment in which Regional Management operates or a decrease in the demand for its products; the geographic concentration of Regional Management’s loan portfolio; the failure of third-party service providers, including those providing information technology products; changes in economic conditions in the markets Regional Management serves, including levels of unemployment and bankruptcies; the ability to achieve successful acquisitions and strategic alliances; the ability to make technological improvements as quickly as competitors; security breaches, cyber-attacks, failures in information systems, or fraudulent activity; the ability to originate loans; reliance on information technology resources and providers, including the risk of prolonged system outages; changes in current revenue and expense trends, including trends affecting delinquencies and credit losses; any future public health crises, including the impact of such crisis on our operations and financial condition; changes in operating and administrative expenses; the departure, transition, or replacement of key personnel; the ability to timely and effectively implement, transition to, and maintain the necessary information technology systems, infrastructure, processes, and controls to support Regional Management’s operations and initiatives; changes in interest rates; existing sources of liquidity may become insufficient or access to these sources may become unexpectedly restricted; exposure to financial risk due to asset-backed securitization transactions; risks related to regulation and legal proceedings, including changes in laws or regulations or in the interpretation or enforcement of laws or regulations; changes in accounting standards, rules, and interpretations and the failure of related assumptions and estimates; the impact of changes in tax laws and guidance, including the timing and amount of revenues that may be recognized; risks related to the ownership of Regional Management’s common stock, including volatility in the market price of shares of Regional Management’s common stock; the timing and amount of future cash dividend payments; and anti-takeover provisions in Regional Management’s charter documents and applicable state law.

The foregoing factors and others are discussed in greater detail in Regional Management’s filings with the Securities and Exchange Commission. Regional Management will not update or revise forward-looking statements to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events or the non-occurrence of anticipated events, whether as a result of new information, future developments, or otherwise, except as required by law. Regional Management is not responsible for changes made to this document by wire services or Internet services.

Regional Management Corp. and Subsidiaries Consolidated Statements of Income (Unaudited) (dollars in thousands, except per share amounts)
										Better (Worse)																Better (Worse)
		2Q 24				2Q 23				$				%				YTD 24				YTD 23				$				%
Revenue
Interest and fee income		$	127,898			$	118,083			$	9,815				8.3	%		$	256,716			$	238,490			$	18,226				7.6	%
Insurance income, net			10,507				11,203				(696	)			(6.2	)%			21,481				22,162				(681	)			(3.1	)%
Other income			4,620				4,198				422				10.1	%			9,136				8,210				926				11.3	%
Total revenue			143,025				133,484				9,541				7.1	%			287,333				268,862				18,471				6.9	%
Expenses
Provision for credit losses			53,802				52,551				(1,251	)			(2.4	)%			100,225				100,219				(6	)			—
Personnel			37,097				36,419				(678	)			(1.9	)%			74,917				75,016				99				0.1	%
Occupancy			6,149				6,158				9				0.1	%			12,524				12,446				(78	)			(0.6	)%
Marketing			4,836				3,844				(992	)			(25.8	)%			9,151				7,223				(1,928	)			(26.7	)%
Other			12,054				10,475				(1,579	)			(15.1	)%			23,992				21,534				(2,458	)			(11.4	)%
Total general and administrative			60,136				56,896				(3,240	)			(5.7	)%			120,584				116,219				(4,365	)			(3.8	)%
Interest expense			17,865				16,224				(1,641	)			(10.1	)%			35,369				33,006				(2,363	)			(7.2	)%
Income before income taxes			11,222				7,813				3,409				43.6	%			31,155				19,418				11,737				60.4	%
Income taxes			2,777				1,790				(987	)			(55.1	)%			7,505				4,706				(2,799	)			(59.5	)%
Net income		$	8,445			$	6,023			$	2,422				40.2	%		$	23,650			$	14,712			$	8,938				60.8	%
Net income per common share:
Basic		$	0.88			$	0.64			$	0.24				37.5	%		$	2.47			$	1.57			$	0.90				57.3	%
Diluted		$	0.86			$	0.63			$	0.23				36.5	%		$	2.41			$	1.53			$	0.88				57.5	%
Weighted-average common shares outstanding:
Basic			9,613				9,399				(214	)			(2.3	)%			9,591				9,363				(228	)			(2.4	)%
Diluted			9,863				9,566				(297	)			(3.1	)%			9,805				9,595				(210	)			(2.2	)%
Return on average assets (annualized)			1.9	%			1.4	%											2.7	%			1.7	%
Return on average equity (annualized)			10.0	%			7.6	%											14.1	%			9.3	%

Regional Management Corp. and Subsidiaries Consolidated Balance Sheets (Unaudited) (dollars in thousands, except par value amounts)
										Increase (Decrease)
		2Q 24				2Q 23				$				%
Assets
Cash		$	4,323			$	10,330			$	(6,007	)			(58.2	)%
Net finance receivables			1,773,743				1,688,937				84,806				5.0	%
Unearned insurance premiums			(46,081	)			(49,059	)			2,978				6.1	%
Allowance for credit losses			(185,400	)			(181,400	)			(4,000	)			(2.2	)%
Net finance receivables, less unearned insurance premiums and allowance for credit losses			1,542,262				1,458,478				83,784				5.7	%
Restricted cash			138,891				131,132				7,759				5.9	%
Lease assets			35,144				34,996				148				0.4	%
Intangible assets			19,264				13,949				5,315				38.1	%
Property and equipment			13,411				14,689				(1,278	)			(8.7	)%
Deferred tax assets, net			12,376				15,278				(2,902	)			(19.0	)%
Restricted available-for-sale investments			2,157				20,298				(18,141	)			(89.4	)%
Other assets			21,224				24,466				(3,242	)			(13.3	)%
Total assets		$	1,789,052			$	1,723,616			$	65,436				3.8	%
Liabilities and Stockholders’ Equity
Liabilities:
Debt		$	1,378,449			$	1,344,855			$	33,594				2.5	%
Unamortized debt issuance costs			(5,616	)			(6,923	)			1,307				18.9	%
Net debt			1,372,833				1,337,932				34,901				2.6	%
Lease liabilities			37,286				37,150				136				0.4	%
Accounts payable and accrued expenses			34,030				27,032				6,998				25.9	%
Total liabilities			1,444,149				1,402,114				42,035				3.0	%
Stockholders’ equity:
Preferred stock ($0.10 par value, 100,000 shares authorized, none issued or outstanding)			—				—				—				—
Common stock ($0.10 par value, 1,000,000 shares authorized, 14,962 shares issued and 10,156 shares outstanding at June 30, 2024 and 14,636 shares issued and 9,829 shares outstanding at June 30, 2023)			1,496				1,464				32				2.2	%
Additional paid-in capital			126,373				116,202				10,171				8.8	%
Retained earnings			367,216				354,346				12,870				3.6	%
Accumulated other comprehensive loss			(39	)			(367	)			328				89.4	%
Treasury stock (4,807 shares at June 30, 2024 and June 30, 2023)			(150,143	)			(150,143	)			—				—
Total stockholders’ equity			344,903				321,502				23,401				7.3	%
Total liabilities and stockholders’ equity		$	1,789,052			$	1,723,616			$	65,436				3.8	%

Regional Management Corp. and Subsidiaries Selected Financial Data (Unaudited) (dollars in thousands, except per share amounts)
		Net Finance Receivables
		2Q 24				1Q 24				QoQ $ Inc (Dec)				QoQ % Inc (Dec)				2Q 23				YoY $ Inc (Dec)				YoY % Inc (Dec)
Large loans		$	1,266,032			$	1,250,647			$	15,385				1.2	%		$	1,238,031			$	28,001				2.3	%
Small loans			505,640				490,830				14,810				3.0	%			444,590				61,050				13.7	%
Retail loans			2,071				2,809				(738	)			(26.3	)%			6,316				(4,245	)			(67.2	)%
Total net finance receivables		$	1,773,743			$	1,744,286			$	29,457				1.7	%		$	1,688,937			$	84,806				5.0	%
Number of branches at period end			343				343				—				—				347				(4	)			(1.2	)%
Net finance receivables per branch		$	5,171			$	5,085			$	86				1.7	%		$	4,867			$	304				6.2	%

		Averages and Yields
		2Q 24								1Q 24								2Q 23
		Average Net Finance Receivables				Average Yield (1)				Average Net Finance Receivables				Average Yield (1)				Average Net Finance Receivables				Average Yield (1)
Large loans		$	1,255,729				26.1	%		$	1,263,491				26.0	%		$	1,223,339				26.0	%
Small loans			490,615				37.3	%			491,911				37.8	%			443,601				34.5	%
Retail loans			2,433				16.6	%			3,341				15.8	%			7,191				16.6	%
Total interest and fee yield		$	1,748,777				29.3	%		$	1,758,743				29.3	%		$	1,674,131				28.2	%
Total revenue yield		$	1,748,777				32.7	%		$	1,758,743				32.8	%		$	1,674,131				31.9	%

(1) Annualized interest and fee income as a percentage of average net finance receivables.

		Components of Increase in Interest and Fee Income
		2Q 24 Compared to 2Q 23
		Increase (Decrease)
		Volume				Rate				Volume & Rate				Total
Large loans		$	2,105			$	380			$	10			$	2,495
Small loans			4,057				3,129				331				7,517
Retail loans			(197	)			1				(1	)			(197	)
Product mix			(700	)			846				(146	)			—
Total increase in interest and fee income		$	5,265			$	4,356			$	194			$	9,815

		Loans Originated (1)
		2Q 24				1Q 24				QoQ $ Inc (Dec)				QoQ % Inc (Dec)				2Q 23				YoY $ Inc (Dec)				YoY % Inc (Dec)
Large loans		$	254,779			$	185,074			$	69,705				37.7	%		$	249,514			$	5,265				2.1	%
Small loans			171,282				141,281				30,001				21.2	%			149,460				21,822				14.6	%
Total loans originated		$	426,061			$	326,355			$	99,706				30.6	%		$	398,974			$	27,087				6.8	%

(1) Represents the principal balance of loan originations and refinancings.

		Other Key Metrics
		2Q 24				1Q 24				2Q 23
Net credit losses		$	55,502			$	46,723			$	54,951
Percentage of average net finance receivables (annualized)			12.7	%			10.6	%			13.1	%
Provision for credit losses		$	53,802			$	46,423			$	52,551
Percentage of average net finance receivables (annualized)			12.3	%			10.6	%			12.6	%
Percentage of total revenue			37.6	%			32.2	%			39.4	%
General and administrative expenses		$	60,136			$	60,448			$	56,896
Percentage of average net finance receivables (annualized)			13.8	%			13.7	%			13.6	%
Percentage of total revenue			42.0	%			41.9	%			42.6	%
Same store results (1):
Net finance receivables at period-end		$	1,759,075			$	1,733,237			$	1,636,131
Net finance receivable growth rate			4.5	%			3.4	%			7.2	%
Number of branches in calculation			338				340				329

(1) Same store sales reflect the change in year-over-year sales for the comparable branch base. The comparable branch base includes those branches open for at least one year.

		Contractual Delinquency
		2Q 24								1Q 24								2Q 23
Allowance for credit losses		$	185,400				10.5	%		$	187,100				10.7	%		$	181,400				10.7	%
Current			1,497,219				84.4	%			1,489,510				85.4	%			1,433,787				84.9	%
1 to 29 days past due			153,788				8.7	%			130,578				7.5	%			138,810				8.2	%
Delinquent accounts:
30 to 59 days			34,924				1.9	%			30,020				1.7	%			33,676				2.0	%
60 to 89 days			27,689				1.6	%			25,409				1.5	%			24,931				1.5	%
90 to 119 days			21,607				1.2	%			23,460				1.3	%			20,041				1.1	%
120 to 149 days			19,333				1.1	%			22,163				1.3	%			18,087				1.1	%
150 to 179 days			19,183				1.1	%			23,146				1.3	%			19,605				1.2	%
Total contractual delinquency		$	122,736				6.9	%		$	124,198				7.1	%		$	116,340				6.9	%
Total net finance receivables		$	1,773,743				100.0	%		$	1,744,286				100.0	%		$	1,688,937				100.0	%
1 day and over past due		$	276,524				15.6	%		$	254,776				14.6	%		$	255,150				15.1	%

		Contractual Delinquency by Product
		2Q 24								1Q 24								2Q 23
Large loans		$	76,432				6.0	%		$	78,055				6.2	%		$	74,637				6.0	%
Small loans			46,015				9.1	%			45,804				9.3	%			40,894				9.2	%
Retail loans			289				14.0	%			339				12.1	%			809				12.8	%
Total contractual delinquency		$	122,736				6.9	%		$	124,198				7.1	%		$	116,340				6.9	%

		Income Statement Quarterly Trend
		2Q 23				3Q 23				4Q 23				1Q 24				2Q 24				QoQ $ B(W)				YoY $ B(W)
Revenue
Interest and fee income		$	118,083			$	125,018			$	126,190			$	128,818			$	127,898			$	(920	)		$	9,815
Insurance income, net			11,203				11,382				10,985				10,974				10,507				(467	)			(696	)
Other income			4,198				4,478				4,484				4,516				4,620				104				422
Total revenue			133,484				140,878				141,659				144,308				143,025				(1,283	)			9,541
Expenses
Provision for credit losses			52,551				50,930				68,885				46,423				53,802				(7,379	)			(1,251	)
Personnel			36,419				39,832				42,024				37,820				37,097				723				(678	)
Occupancy			6,158				6,315				6,268				6,375				6,149				226				9
Marketing			3,844				4,077				4,474				4,315				4,836				(521	)			(992	)
Other			10,475				11,880				12,030				11,938				12,054				(116	)			(1,579	)
Total general and administrative			56,896				62,104				64,796				60,448				60,136				312				(3,240	)
Interest expense			16,224				16,947				17,510				17,504				17,865				(361	)			(1,641	)
Income before income taxes			7,813				10,897				(9,532	)			19,933				11,222				(8,711	)			3,409
Income taxes			1,790				2,077				(1,958	)			4,728				2,777				1,951				(987	)
Net income (loss)		$	6,023			$	8,820			$	(7,574	)		$	15,205			$	8,445			$	(6,760	)		$	2,422
Net income (loss) per common share:
Basic		$	0.64			$	0.94			$	(0.80	)		$	1.59			$	0.88			$	(0.71	)		$	0.24
Diluted		$	0.63			$	0.91			$	(0.80	)		$	1.56			$	0.86			$	(0.70	)		$	0.23
Weighted-average shares outstanding:
Basic			9,399				9,429				9,437				9,569				9,613				(44	)			(214	)
Diluted			9,566				9,650				9,437				9,746				9,863				(117	)			(297	)
		Balance Sheet Quarterly Trend
		2Q 23				3Q 23				4Q 23				1Q 24				2Q 24				QoQ $ Inc (Dec)				YoY $ Inc (Dec)
Total assets		$	1,723,616			$	1,765,340			$	1,794,527			$	1,756,748			$	1,789,052			$	32,304			$	65,436
Net finance receivables		$	1,688,937			$	1,751,009			$	1,771,410			$	1,744,286			$	1,773,743			$	29,457			$	84,806
Allowance for credit losses		$	181,400			$	184,900			$	187,400			$	187,100			$	185,400			$	(1,700	)		$	4,000
Debt		$	1,344,855			$	1,372,748			$	1,399,814			$	1,358,795			$	1,378,449			$	19,654			$	33,594
		Other Key Metrics Quarterly Trend
		2Q 23				3Q 23				4Q 23				1Q 24				2Q 24				QoQ Inc (Dec)				YoY Inc (Dec)
Interest and fee yield (annualized)			28.2	%			29.0	%			28.8	%			29.3	%			29.3	%			—				1.1	%
Efficiency ratio (1)			42.6	%			44.1	%			45.7	%			41.9	%			42.0	%			0.1	%			(0.6	)%
Operating expense ratio (2)			13.6	%			14.4	%			14.8	%			13.7	%			13.8	%			0.1	%			0.2	%
30+ contractual delinquency			6.9	%			7.3	%			6.9	%			7.1	%			6.9	%			(0.2	)%			—
Net credit loss ratio (3)			13.1	%			11.0	%			15.1	%			10.6	%			12.7	%			2.1	%			(0.4	)%
Book value per share		$	32.71			$	33.61			$	33.02			$	34.10			$	33.96			$	(0.14	)		$	1.25

(1) General and administrative expenses as a percentage of total revenue.
(2) Annualized general and administrative expenses as a percentage of average net finance receivables.
(3) Annualized net credit losses as a percentage of average net finance receivables.

		Averages and Yields
		YTD 24								YTD 23
		Average Net Finance Receivables				Average Yield (1)				Average Net Finance Receivables				Average Yield (1)
Large loans		$	1,259,611				26.1	%		$	1,219,464				26.0	%
Small loans			491,262				37.6	%			455,659				34.8	%
Retail loans			2,887				16.1	%			8,068				17.7	%
Total interest and fee yield		$	1,753,760				29.3	%		$	1,683,191				28.3	%
Total revenue yield		$	1,753,760				32.8	%		$	1,683,191				31.9	%

		Components of Increase in Interest and Fee Income
		YTD 24 Compared to YTD 23
		Increase (Decrease)
		Volume				Rate				Volume & Rate				Total
Large loans		$	5,219			$	407			$	13			$	5,639
Small loans			6,193				6,378				498				13,069
Retail loans			(459	)			(64	)			41				(482	)
Product mix			(954	)			1,175				(221	)			—
Total increase in interest and fee income		$	9,999			$	7,896			$	331			$	18,226

		Loans Originated (1)
		YTD 24				YTD 23				YTD $ Inc (Dec)				YTD % Inc (Dec)
Large loans		$	439,853			$	443,085			$	(3,232	)			(0.7	)%
Small loans			312,563				258,944				53,619				20.7	%
Retail loans			—				146				(146	)			(100.0	)%
Total loans originated		$	752,416			$	702,175			$	50,241				7.2	%

(1) Represents the principal balance of loan originations and refinancings.

		Other Key Metrics
		YTD 24				YTD 23
Net credit losses		$	102,225			$	97,619
Percentage of average net finance receivables (annualized)			11.7	%			11.6	%
Provision for credit losses		$	100,225			$	100,219
Percentage of average net finance receivables (annualized)			11.4	%			11.9	%
Percentage of total revenue			34.9	%			37.3	%
General and administrative expenses		$	120,584			$	116,219
Percentage of average net finance receivables (annualized)			13.8	%			13.8	%
Percentage of total revenue			42.0	%			43.2	%

Non-GAAP Financial Measures

In addition to financial measures presented in accordance with generally accepted accounting principles (“GAAP”), this press release contains certain non-GAAP financial measures. The company’s management utilizes non-GAAP measures as additional metrics to aid in, and enhance, its understanding of the company’s financial results. Tangible equity and the funded debt-to-tangible equity ratio are non-GAAP measures that adjust GAAP measures to exclude intangible assets. Management uses these equity measures to evaluate and manage the company’s capital and leverage position. The company also believes that these equity measures are commonly used in the financial services industry and provide useful information to users of the company’s financial statements in the evaluation of its capital and leverage position.

This non-GAAP financial information should be considered in addition to, not as a substitute for or superior to, measures of financial performance prepared in accordance with GAAP. In addition, the company’s non-GAAP measures may not be comparable to similarly titled non-GAAP measures of other companies. The following tables provide a reconciliation of GAAP measures to non-GAAP measures.

		2Q 24
Debt		$	1,378,449
Total stockholders' equity			344,903
Less: Intangible assets			19,264
Tangible equity (non-GAAP)		$	325,639
Funded debt-to-equity ratio			4.0	x
Funded debt-to-tangible equity ratio (non-GAAP)			4.2	x

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240731871271/en/

Investor Relations

Garrett Edson, (203) 682-8331

investor.relations@regionalmanagement.com

Source: Regional Management Corp.

FAQ

What was Regional Management Corp's net income for Q2 2024?

Regional Management Corp. reported a net income of $8.4 million for Q2 2024.

How much did Regional Management's (RM) diluted EPS grow in Q2 2024 compared to the prior year?

Regional Management's diluted EPS grew by 37%, from $0.63 in Q2 2023 to $0.86 in Q2 2024.

What was the total revenue for Regional Management (RM) in Q2 2024?

Regional Management's total revenue for Q2 2024 was $143.0 million, an increase of 7.1% from the prior-year period.

How much did Regional Management's (RM) net finance receivables grow year-over-year as of June 30, 2024?

Regional Management's net finance receivables grew by 5.0% year-over-year, reaching $1.8 billion as of June 30, 2024.

What was Regional Management's (RM) 30+ day contractual delinquency rate as of June 30, 2024?

Regional Management's 30+ day contractual delinquency rate was 6.9% as of June 30, 2024.