Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Regional Management Corp. Announces Third Quarter 2023 Results By: Regional Management Corp. via Business Wire November 01, 2023 at 16:15 PM EDT - Net income of $8.8 million and diluted earnings per share of $0.91 - - 30+ day contractual delinquency rate of 7.3% as of September 30, 2023 - - Third quarter ending net receivables of $1.8 billion - Regional Management Corp. (NYSE: RM), a diversified consumer finance company, today announced results for the third quarter ended September 30, 2023. “With a high-quality portfolio, prudent expense management, and solid execution of our core business, we delivered another set of strong results in the third quarter,” said Robert W. Beck, President and Chief Executive Officer of Regional Management Corp. “We generated $8.8 million of net income and $0.91 of diluted EPS. Strong loan demand and our conservative underwriting criteria led to high-quality portfolio growth of $62 million, record revenue of $141 million, and a sequential increase in revenue yields of 80 basis points. We also continued to manage our expenses closely while furthering our strategic initiatives, driving a 50 basis point improvement in our operating expense ratio from the prior year. We are pleased with our team’s ability to deliver consistent, predictable, and superior results for our shareholders.” “We remain well-positioned to operate effectively in the current economic cycle,” added Mr. Beck. “We ended the quarter with a 30+ day delinquency rate of 7.3%, up 40 basis points from the second quarter, consistent with normal seasonal trends. Our higher-quality originations from credit tightening have kept our first payment default and early-stage delinquency rates below 2019 levels. Recent data indicates a strong labor market, moderating inflation, and real wage growth, but we remain selective in making loans within our tightened credit box. However, with ample liquidity, significant borrowing capacity, and a large addressable market, we stand ready to lean back into growth when justified by the economic conditions and the overall performance of our loan portfolio.” Third Quarter 2023 Highlights Net income for the third quarter of 2023 was $8.8 million and diluted earnings per share was $0.91. Net finance receivables as of September 30, 2023 were $1.8 billion, an increase of $143.4 million, or 8.9%, from the prior-year period. Large loan net finance receivables of $1.3 billion increased $155.4 million, or 13.9%, from the prior-year period and represented 72.6% of the total loan portfolio, compared to 69.4% in the prior-year period. Small loan net finance receivables were $474.2 million, a decrease of 1.3% from the prior-year period. Total loan originations were $425.1 million in the third quarter of 2023, an increase of $6.4 million, or 1.5%, from the prior-year period. Total revenue for the third quarter of 2023 was $140.9 million, an increase of $9.4 million, or 7.2%, from the prior-year period. Interest and fee income increased $9.0 million, or 7.8%, primarily due to higher average net finance receivables. Insurance income, net decreased $0.6 million, or 5.0%, due to lower premiums. Provision for credit losses for the third quarter of 2023 was $50.9 million, an increase of $2.9 million, or 5.9%, from the prior-year period. Annualized net credit losses as a percentage of average net finance receivables for the third quarter of 2023 were 11.0%, compared to 9.1% in the prior-year period. The provision for credit losses for the third quarter of 2023 included a reserve increase of $3.5 million primarily due to portfolio growth during the quarter, partially offset by changes in estimated future macroeconomic impacts on credit losses. Allowance for credit losses was $184.9 million as of September 30, 2023, or 10.6% of net finance receivables. As of September 30, 2023, 30+ day contractual delinquencies totaled $128.4 million, or 7.3% of net finance receivables, an increase of 10 basis points compared to September 30, 2022. The 30+ day contractual delinquency compares favorably to the company’s $184.9 million allowance for credit losses as of September 30, 2023. General and administrative expenses for the third quarter of 2023 were $62.1 million, an increase of $3.9 million, or 6.8%, from the prior-year period. The operating expense ratio (annualized general and administrative expenses as a percentage of average net finance receivables) for the third quarter of 2023 was 14.4%, a 50 basis point improvement compared to the prior-year period. Fourth Quarter 2023 Dividend The company’s Board of Directors has declared a dividend of $0.30 per common share for the fourth quarter of 2023. The dividend will be paid on December 13, 2023 to shareholders of record as of the close of business on November 22, 2023. 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 September 30, 2023, the company had net finance receivables of $1.8 billion and debt of $1.4 billion. The debt consisted of: $131.3 million on the company’s $420 million senior revolving credit facility, $52.2 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 September 30, 2023, the company’s unused capacity to fund future growth on its revolving credit facilities (subject to the borrowing base) was $613 million, or 77.1%, and the company had available liquidity of $179.2 million, including unrestricted cash on hand and immediate availability to draw down cash from its revolving credit facilities. As of September 30, 2023, the company’s fixed-rate debt as a percentage of total debt was 87%, with a weighted-average coupon of 3.6% and a weighted-average revolving duration of 1.3 years. The company had a funded debt-to-equity ratio of 4.2 to 1.0 and a stockholders’ equity ratio of 18.7%, each as of September 30, 2023. On a non-GAAP basis, the company had a funded debt-to-tangible equity ratio of 4.4 to 1.0, as of September 30, 2023. 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 resurgence of COVID-19), 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) 3Q 23 3Q 22 $ % YTD 23 YTD 22 $ % Revenue Interest and fee income $ 125,018 $ 116,020 $ 8,998 7.8 % $ 363,508 $ 333,422 $ 30,086 9.0 % Insurance income, net 11,382 11,987 (605 ) (5.0 )% 33,544 32,751 793 2.4 % Other income 4,478 3,445 1,033 30.0 % 12,688 8,998 3,690 41.0 % Total revenue 140,878 131,452 9,426 7.2 % 409,740 375,171 34,569 9.2 % Expenses Provision for credit losses 50,930 48,071 (2,859 ) (5.9 )% 151,149 124,329 (26,820 ) (21.6 )% Personnel 39,832 36,979 (2,853 ) (7.7 )% 114,848 106,574 (8,274 ) (7.8 )% Occupancy 6,315 5,848 (467 ) (8.0 )% 18,761 17,812 (949 ) (5.3 )% Marketing 4,077 3,940 (137 ) (3.5 )% 11,300 11,139 (161 ) (1.4 )% Other 11,880 11,397 (483 ) (4.2 )% 33,414 31,860 (1,554 ) (4.9 )% Total general and administrative 62,104 58,164 (3,940 ) (6.8 )% 178,323 167,385 (10,938 ) (6.5 )% Interest expense 16,947 11,863 (5,084 ) (42.9 )% 49,953 19,368 (30,585 ) (157.9 )% Income before income taxes 10,897 13,354 (2,457 ) (18.4 )% 30,315 64,089 (33,774 ) (52.7 )% Income taxes 2,077 3,286 1,209 36.8 % 6,783 15,256 8,473 55.5 % Net income $ 8,820 $ 10,068 $ (1,248 ) (12.4 )% $ 23,532 $ 48,833 $ (25,301 ) (51.8 )% Net income per common share: Basic $ 0.94 $ 1.09 $ (0.15 ) (13.8 )% $ 2.51 $ 5.23 $ (2.72 ) (52.0 )% Diluted $ 0.91 $ 1.06 $ (0.15 ) (14.2 )% $ 2.45 $ 5.01 $ (2.56 ) (51.1 )% Weighted-average common shares outstanding: Basic 9,429 9,195 (234 ) (2.5 )% 9,385 9,329 (56 ) (0.6 )% Diluted 9,650 9,526 (124 ) (1.3 )% 9,613 9,738 125 1.3 % Return on average assets (annualized) 2.0 % 2.5 % 1.8 % 4.3 % Return on average equity (annualized) 10.8 % 13.1 % 9.8 % 21.7 % Regional Management Corp. and Subsidiaries Consolidated Balance Sheets (Unaudited) (dollars in thousands, except par value amounts) Increase (Decrease) 3Q 23 3Q 22 $ % Assets Cash $ 7,413 $ 3,140 $ 4,273 136.1 % Net finance receivables 1,751,009 1,607,598 143,411 8.9 % Unearned insurance premiums (48,764 ) (49,789 ) 1,025 2.1 % Allowance for credit losses (184,900 ) (179,800 ) (5,100 ) (2.8 )% Net finance receivables, less unearned insurance premiums and allowance for credit losses 1,517,345 1,378,009 139,336 10.1 % Restricted cash 117,029 113,865 3,164 2.8 % Lease assets 34,864 30,153 4,711 15.6 % Restricted available-for-sale investments 22,510 20,290 2,220 10.9 % Intangible assets 15,048 11,305 3,743 33.1 % Property and equipment 14,157 12,370 1,787 14.4 % Deferred tax assets, net 14,140 16,836 (2,696 ) (16.0 )% Other assets 22,834 20,582 2,252 10.9 % Total assets $ 1,765,340 $ 1,606,550 $ 158,790 9.9 % Liabilities and Stockholders’ Equity Liabilities: Debt $ 1,372,748 $ 1,241,039 $ 131,709 10.6 % Unamortized debt issuance costs (5,647 ) (9,647 ) 4,000 41.5 % Net debt 1,367,101 1,231,392 135,709 11.0 % Lease liabilities 37,095 32,468 4,627 14.3 % Accounts payable and accrued expenses 30,559 34,237 (3,678 ) (10.7 )% Total liabilities 1,434,755 1,298,097 136,658 10.5 % 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, 14,642 shares issued and 9,835 shares outstanding at September 30, 2023 and 14,391 shares issued and 9,584 shares outstanding at September 30, 2022) 1,464 1,439 25 1.7 % Additional paid-in capital 119,507 111,530 7,977 7.2 % Retained earnings 360,155 346,083 14,072 4.1 % Accumulated other comprehensive loss (398 ) (456 ) 58 12.7 % Treasury stock (4,807 shares at September 30, 2023 and 4,807 shares at September 30, 2022) (150,143 ) (150,143 ) — — Total stockholders’ equity 330,585 308,453 22,132 7.2 % Total liabilities and stockholders’ equity $ 1,765,340 $ 1,606,550 $ 158,790 9.9 % Regional Management Corp. and Subsidiaries Selected Financial Data (Unaudited) (dollars in thousands, except per share amounts) Net Finance Receivables 3Q 23 2Q 23 QoQ $ Inc (Dec) QoQ % Inc (Dec) 3Q 22 YoY $ Inc (Dec) YoY % Inc (Dec) Small loans $ 474,181 $ 444,590 $ 29,591 6.7 % $ 480,199 $ (6,018 ) (1.3 )% Large loans 1,271,891 1,238,031 33,860 2.7 % 1,116,455 155,436 13.9 % Retail loans 4,937 6,316 (1,379 ) (21.8 )% 10,944 (6,007 ) (54.9 )% Total net finance receivables $ 1,751,009 $ 1,688,937 $ 62,072 3.7 % $ 1,607,598 $ 143,411 8.9 % Number of branches at period end 347 347 — — 338 9 2.7 % Net finance receivables per branch $ 5,046 $ 4,867 $ 179 3.7 % $ 4,756 $ 290 6.1 % Averages and Yields 3Q 23 2Q 23 3Q 22 Average Net Finance Receivables Average Yield (1) Average Net Finance Receivables Average Yield (1) Average Net Finance Receivables Average Yield (1) Small loans $ 459,320 36.6 % $ 443,601 34.5 % $ 466,087 35.5 % Large loans 1,257,168 26.3 % 1,223,339 26.0 % 1,089,225 27.2 % Retail loans 5,647 16.9 % 7,191 16.6 % 10,935 18.5 % Total interest and fee yield $ 1,722,135 29.0 % $ 1,674,131 28.2 % $ 1,566,247 29.6 % Total revenue yield $ 1,722,135 32.7 % $ 1,674,131 31.9 % $ 1,566,247 33.6 % (1) Annualized interest and fee income as a percentage of average net finance receivables. Components of Increase in Interest and Fee Income 3Q 23 Compared to 3Q 22 Increase (Decrease) Volume Rate Volume & Rate Total Small loans $ (601 ) $ 1,260 $ (18 ) $ 641 Large loans 11,428 (2,428 ) (375 ) 8,625 Retail loans (245 ) (45 ) 22 (268 ) Product mix 965 (1,106 ) 141 — Total increase in interest and fee income $ 11,547 $ (2,319 ) $ (230 ) $ 8,998 Loans Originated (1) 3Q 23 2Q 23 QoQ $ Inc (Dec) QoQ % Inc (Dec) 3Q 22 YoY $ Inc (Dec) YoY % Inc (Dec) Small loans $ 173,074 $ 149,460 $ 23,614 15.8 % $ 173,269 $ (195 ) (0.1 )% Large loans 251,999 249,514 2,485 1.0 % 243,259 8,740 3.6 % Retail loans — — — — 2,145 (2,145 ) (100.0 )% Total loans originated $ 425,073 $ 398,974 $ 26,099 6.5 % $ 418,673 $ 6,400 1.5 % (1) Represents the principal balance of loan originations and refinancings. Other Key Metrics 3Q 23 2Q 23 3Q 22 Net credit losses $ 47,430 $ 54,951 $ 35,771 Percentage of average net finance receivables (annualized) 11.0 % 13.1 % 9.1 % Provision for credit losses $ 50,930 $ 52,551 $ 48,071 Percentage of average net finance receivables (annualized) 11.8 % 12.6 % 12.3 % Percentage of total revenue 36.2 % 39.4 % 36.6 % General and administrative expenses $ 62,104 $ 56,896 $ 58,164 Percentage of average net finance receivables (annualized) 14.4 % 13.6 % 14.9 % Percentage of total revenue 44.1 % 42.6 % 44.2 % Same store results (1): Net finance receivables at period-end $ 1,684,757 $ 1,636,131 $ 1,552,740 Net finance receivable growth rate 4.9 % 7.2 % 19.2 % Number of branches in calculation 330 329 315 (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 by Aging 3Q 23 2Q 23 3Q 22 Allowance for credit losses $ 184,900 10.6 % $ 181,400 10.7 % $ 179,800 11.2 % Current 1,472,931 84.2 % 1,433,787 84.9 % 1,356,134 84.4 % 1 to 29 days past due 149,648 8.5 % 138,810 8.2 % 135,468 8.4 % Delinquent accounts: 30 to 59 days 36,502 2.1 % 33,676 2.0 % 32,295 2.0 % 60 to 89 days 28,130 1.6 % 24,931 1.5 % 25,375 1.6 % 90 to 119 days 23,420 1.3 % 20,041 1.1 % 21,720 1.3 % 120 to 149 days 21,309 1.2 % 18,087 1.1 % 17,503 1.1 % 150 to 179 days 19,069 1.1 % 19,605 1.2 % 19,103 1.2 % Total contractual delinquency $ 128,430 7.3 % $ 116,340 6.9 % $ 115,996 7.2 % Total net finance receivables $ 1,751,009 100.0 % $ 1,688,937 100.0 % $ 1,607,598 100.0 % 1 day and over past due $ 278,078 15.8 % $ 255,150 15.1 % $ 251,464 15.6 % Contractual Delinquency by Product 3Q 23 2Q 23 3Q 22 Small loans $ 45,438 9.6 % $ 40,894 9.2 % $ 49,906 10.4 % Large loans 82,256 6.5 % 74,637 6.0 % 64,922 5.8 % Retail loans 736 14.9 % 809 12.8 % 1,168 10.7 % Total contractual delinquency $ 128,430 7.3 % $ 116,340 6.9 % $ 115,996 7.2 % Income Statement Quarterly Trend 3Q 22 4Q 22 1Q 23 2Q 23 3Q 23 QoQ $ B(W) YoY $ B(W) Revenue Interest and fee income $ 116,020 $ 117,432 $ 120,407 $ 118,083 $ 125,018 $ 6,935 $ 8,998 Insurance income, net 11,987 10,751 10,959 11,203 11,382 179 (605 ) Other income 3,445 3,833 4,012 4,198 4,478 280 1,033 Total revenue 131,452 132,016 135,378 133,484 140,878 7,394 9,426 Expenses Provision for credit losses 48,071 60,786 47,668 52,551 50,930 1,621 (2,859 ) Personnel 36,979 34,669 38,597 36,419 39,832 (3,413 ) (2,853 ) Occupancy 5,848 5,997 6,288 6,158 6,315 (157 ) (467 ) Marketing 3,940 4,239 3,379 3,844 4,077 (233 ) (137 ) Other 11,397 10,238 11,059 10,475 11,880 (1,405 ) (483 ) Total general and administrative 58,164 55,143 59,323 56,896 62,104 (5,208 ) (3,940 ) Interest expense 11,863 14,855 16,782 16,224 16,947 (723 ) (5,084 ) Income before income taxes 13,354 1,232 11,605 7,813 10,897 3,084 (2,457 ) Income taxes 3,286 (1,159 ) 2,916 1,790 2,077 (287 ) 1,209 Net income $ 10,068 $ 2,391 $ 8,689 $ 6,023 $ 8,820 $ 2,797 $ (1,248 ) Net income per common share: Basic $ 1.09 $ 0.26 $ 0.93 $ 0.64 $ 0.94 $ 0.30 $ (0.15 ) Diluted $ 1.06 $ 0.25 $ 0.90 $ 0.63 $ 0.91 $ 0.28 $ (0.15 ) Weighted-average shares outstanding: Basic 9,195 9,199 9,325 9,399 9,429 (30 ) (234 ) Diluted 9,526 9,411 9,622 9,566 9,650 (84 ) (124 ) Balance Sheet Quarterly Trend 3Q 22 4Q 22 1Q 23 2Q 23 3Q 23 QoQ $ Inc (Dec) YoY $ Inc (Dec) Total assets $ 1,606,550 $ 1,724,987 $ 1,701,114 $ 1,723,616 $ 1,765,340 $ 41,724 $ 158,790 Net finance receivables $ 1,607,598 $ 1,699,393 $ 1,676,230 $ 1,688,937 $ 1,751,009 $ 62,072 $ 143,411 Allowance for credit losses $ 179,800 $ 178,800 $ 183,800 $ 181,400 $ 184,900 $ 3,500 $ 5,100 Debt $ 1,241,039 $ 1,355,359 $ 1,329,677 $ 1,344,855 $ 1,372,748 $ 27,893 $ 131,709 Other Key Metrics Quarterly Trend 3Q 22 4Q 22 1Q 23 2Q 23 3Q 23 QoQ Inc (Dec) YoY Inc (Dec) Interest and fee yield (annualized) 29.6 % 28.5 % 28.5 % 28.2 % 29.0 % 0.8 % (0.6 )% Efficiency ratio (1) 44.2 % 41.8 % 43.8 % 42.6 % 44.1 % 1.5 % (0.1 )% Operating expense ratio (2) 14.9 % 13.4 % 14.0 % 13.6 % 14.4 % 0.8 % (0.5 )% 30+ contractual delinquency 7.2 % 7.1 % 7.2 % 6.9 % 7.3 % 0.4 % 0.1 % Net credit loss ratio (3) 9.1 % 15.0 % 10.1 % 13.1 % 11.0 % (2.1 )% 1.9 % Book value per share $ 32.18 $ 32.41 $ 33.06 $ 32.71 $ 33.61 $ 0.90 $ 1.43 (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 23 YTD 22 Average Net Finance Receivables Average Yield (1) Average Net Finance Receivables Average Yield (1) Small loans $ 456,893 35.4 % $ 448,175 35.8 % Large loans 1,232,170 26.1 % 1,032,273 27.4 % Retail loans 7,252 17.5 % 10,796 18.4 % Total interest and fee yield $ 1,696,315 28.6 % $ 1,491,244 29.8 % Total revenue yield $ 1,696,315 32.2 % $ 1,491,244 33.5 % (1) Annualized interest and fee income as a percentage of average net finance receivables. Components of Increase in Interest and Fee Income YTD 23 Compared to YTD 22 Increase (Decrease) Volume Rate Volume & Rate Total Small loans $ 2,338 $ (1,208 ) $ (24 ) $ 1,106 Large loans 41,004 (9,624 ) (1,864 ) 29,516 Retail loans (488 ) (71 ) 23 (536 ) Product mix 2,997 (2,956 ) (41 ) — Total increase in interest and fee income $ 45,851 $ (13,859 ) $ (1,906 ) $ 30,086 Loans Originated (1) YTD 23 YTD 22 YTD $ Inc (Dec) YTD % Inc (Dec) Small loans $ 432,018 $ 481,644 $ (49,626 ) (10.3 )% Large loans 695,084 682,110 12,974 1.9 % Retail loans 146 7,206 (7,060 ) (98.0 )% Total loans originated $ 1,127,248 $ 1,170,960 $ (43,712 ) (3.7 )% (1) Represents the principal balance of loan originations and refinancings. Other Key Metrics YTD 23 YTD 22 Net credit losses $ 145,049 $ 103,829 Percentage of average net finance receivables (annualized) 11.4 % 9.3 % Provision for credit losses $ 151,149 $ 124,329 Percentage of average net finance receivables (annualized) 11.9 % 11.1 % Percentage of total revenue 36.9 % 33.1 % General and administrative expenses $ 178,323 $ 167,385 Percentage of average net finance receivables (annualized) 14.0 % 15.0 % Percentage of total revenue 43.5 % 44.6 % 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. 3Q 23 Debt $ 1,372,748 Total stockholders' equity 330,585 Less: Intangible assets 15,048 Tangible equity (non-GAAP) $ 315,537 Funded debt-to-equity ratio 4.2 x Funded debt-to-tangible equity ratio (non-GAAP) 4.4 x View source version on businesswire.com: https://www.businesswire.com/news/home/20231101241638/en/Contacts Investor Relations Garrett Edson, (203) 682-8331 investor.relations@regionalmanagement.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
Regional Management Corp. Announces Third Quarter 2023 Results By: Regional Management Corp. via Business Wire November 01, 2023 at 16:15 PM EDT - Net income of $8.8 million and diluted earnings per share of $0.91 - - 30+ day contractual delinquency rate of 7.3% as of September 30, 2023 - - Third quarter ending net receivables of $1.8 billion - Regional Management Corp. (NYSE: RM), a diversified consumer finance company, today announced results for the third quarter ended September 30, 2023. “With a high-quality portfolio, prudent expense management, and solid execution of our core business, we delivered another set of strong results in the third quarter,” said Robert W. Beck, President and Chief Executive Officer of Regional Management Corp. “We generated $8.8 million of net income and $0.91 of diluted EPS. Strong loan demand and our conservative underwriting criteria led to high-quality portfolio growth of $62 million, record revenue of $141 million, and a sequential increase in revenue yields of 80 basis points. We also continued to manage our expenses closely while furthering our strategic initiatives, driving a 50 basis point improvement in our operating expense ratio from the prior year. We are pleased with our team’s ability to deliver consistent, predictable, and superior results for our shareholders.” “We remain well-positioned to operate effectively in the current economic cycle,” added Mr. Beck. “We ended the quarter with a 30+ day delinquency rate of 7.3%, up 40 basis points from the second quarter, consistent with normal seasonal trends. Our higher-quality originations from credit tightening have kept our first payment default and early-stage delinquency rates below 2019 levels. Recent data indicates a strong labor market, moderating inflation, and real wage growth, but we remain selective in making loans within our tightened credit box. However, with ample liquidity, significant borrowing capacity, and a large addressable market, we stand ready to lean back into growth when justified by the economic conditions and the overall performance of our loan portfolio.” Third Quarter 2023 Highlights Net income for the third quarter of 2023 was $8.8 million and diluted earnings per share was $0.91. Net finance receivables as of September 30, 2023 were $1.8 billion, an increase of $143.4 million, or 8.9%, from the prior-year period. Large loan net finance receivables of $1.3 billion increased $155.4 million, or 13.9%, from the prior-year period and represented 72.6% of the total loan portfolio, compared to 69.4% in the prior-year period. Small loan net finance receivables were $474.2 million, a decrease of 1.3% from the prior-year period. Total loan originations were $425.1 million in the third quarter of 2023, an increase of $6.4 million, or 1.5%, from the prior-year period. Total revenue for the third quarter of 2023 was $140.9 million, an increase of $9.4 million, or 7.2%, from the prior-year period. Interest and fee income increased $9.0 million, or 7.8%, primarily due to higher average net finance receivables. Insurance income, net decreased $0.6 million, or 5.0%, due to lower premiums. Provision for credit losses for the third quarter of 2023 was $50.9 million, an increase of $2.9 million, or 5.9%, from the prior-year period. Annualized net credit losses as a percentage of average net finance receivables for the third quarter of 2023 were 11.0%, compared to 9.1% in the prior-year period. The provision for credit losses for the third quarter of 2023 included a reserve increase of $3.5 million primarily due to portfolio growth during the quarter, partially offset by changes in estimated future macroeconomic impacts on credit losses. Allowance for credit losses was $184.9 million as of September 30, 2023, or 10.6% of net finance receivables. As of September 30, 2023, 30+ day contractual delinquencies totaled $128.4 million, or 7.3% of net finance receivables, an increase of 10 basis points compared to September 30, 2022. The 30+ day contractual delinquency compares favorably to the company’s $184.9 million allowance for credit losses as of September 30, 2023. General and administrative expenses for the third quarter of 2023 were $62.1 million, an increase of $3.9 million, or 6.8%, from the prior-year period. The operating expense ratio (annualized general and administrative expenses as a percentage of average net finance receivables) for the third quarter of 2023 was 14.4%, a 50 basis point improvement compared to the prior-year period. Fourth Quarter 2023 Dividend The company’s Board of Directors has declared a dividend of $0.30 per common share for the fourth quarter of 2023. The dividend will be paid on December 13, 2023 to shareholders of record as of the close of business on November 22, 2023. 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 September 30, 2023, the company had net finance receivables of $1.8 billion and debt of $1.4 billion. The debt consisted of: $131.3 million on the company’s $420 million senior revolving credit facility, $52.2 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 September 30, 2023, the company’s unused capacity to fund future growth on its revolving credit facilities (subject to the borrowing base) was $613 million, or 77.1%, and the company had available liquidity of $179.2 million, including unrestricted cash on hand and immediate availability to draw down cash from its revolving credit facilities. As of September 30, 2023, the company’s fixed-rate debt as a percentage of total debt was 87%, with a weighted-average coupon of 3.6% and a weighted-average revolving duration of 1.3 years. The company had a funded debt-to-equity ratio of 4.2 to 1.0 and a stockholders’ equity ratio of 18.7%, each as of September 30, 2023. On a non-GAAP basis, the company had a funded debt-to-tangible equity ratio of 4.4 to 1.0, as of September 30, 2023. 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 resurgence of COVID-19), 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) 3Q 23 3Q 22 $ % YTD 23 YTD 22 $ % Revenue Interest and fee income $ 125,018 $ 116,020 $ 8,998 7.8 % $ 363,508 $ 333,422 $ 30,086 9.0 % Insurance income, net 11,382 11,987 (605 ) (5.0 )% 33,544 32,751 793 2.4 % Other income 4,478 3,445 1,033 30.0 % 12,688 8,998 3,690 41.0 % Total revenue 140,878 131,452 9,426 7.2 % 409,740 375,171 34,569 9.2 % Expenses Provision for credit losses 50,930 48,071 (2,859 ) (5.9 )% 151,149 124,329 (26,820 ) (21.6 )% Personnel 39,832 36,979 (2,853 ) (7.7 )% 114,848 106,574 (8,274 ) (7.8 )% Occupancy 6,315 5,848 (467 ) (8.0 )% 18,761 17,812 (949 ) (5.3 )% Marketing 4,077 3,940 (137 ) (3.5 )% 11,300 11,139 (161 ) (1.4 )% Other 11,880 11,397 (483 ) (4.2 )% 33,414 31,860 (1,554 ) (4.9 )% Total general and administrative 62,104 58,164 (3,940 ) (6.8 )% 178,323 167,385 (10,938 ) (6.5 )% Interest expense 16,947 11,863 (5,084 ) (42.9 )% 49,953 19,368 (30,585 ) (157.9 )% Income before income taxes 10,897 13,354 (2,457 ) (18.4 )% 30,315 64,089 (33,774 ) (52.7 )% Income taxes 2,077 3,286 1,209 36.8 % 6,783 15,256 8,473 55.5 % Net income $ 8,820 $ 10,068 $ (1,248 ) (12.4 )% $ 23,532 $ 48,833 $ (25,301 ) (51.8 )% Net income per common share: Basic $ 0.94 $ 1.09 $ (0.15 ) (13.8 )% $ 2.51 $ 5.23 $ (2.72 ) (52.0 )% Diluted $ 0.91 $ 1.06 $ (0.15 ) (14.2 )% $ 2.45 $ 5.01 $ (2.56 ) (51.1 )% Weighted-average common shares outstanding: Basic 9,429 9,195 (234 ) (2.5 )% 9,385 9,329 (56 ) (0.6 )% Diluted 9,650 9,526 (124 ) (1.3 )% 9,613 9,738 125 1.3 % Return on average assets (annualized) 2.0 % 2.5 % 1.8 % 4.3 % Return on average equity (annualized) 10.8 % 13.1 % 9.8 % 21.7 % Regional Management Corp. and Subsidiaries Consolidated Balance Sheets (Unaudited) (dollars in thousands, except par value amounts) Increase (Decrease) 3Q 23 3Q 22 $ % Assets Cash $ 7,413 $ 3,140 $ 4,273 136.1 % Net finance receivables 1,751,009 1,607,598 143,411 8.9 % Unearned insurance premiums (48,764 ) (49,789 ) 1,025 2.1 % Allowance for credit losses (184,900 ) (179,800 ) (5,100 ) (2.8 )% Net finance receivables, less unearned insurance premiums and allowance for credit losses 1,517,345 1,378,009 139,336 10.1 % Restricted cash 117,029 113,865 3,164 2.8 % Lease assets 34,864 30,153 4,711 15.6 % Restricted available-for-sale investments 22,510 20,290 2,220 10.9 % Intangible assets 15,048 11,305 3,743 33.1 % Property and equipment 14,157 12,370 1,787 14.4 % Deferred tax assets, net 14,140 16,836 (2,696 ) (16.0 )% Other assets 22,834 20,582 2,252 10.9 % Total assets $ 1,765,340 $ 1,606,550 $ 158,790 9.9 % Liabilities and Stockholders’ Equity Liabilities: Debt $ 1,372,748 $ 1,241,039 $ 131,709 10.6 % Unamortized debt issuance costs (5,647 ) (9,647 ) 4,000 41.5 % Net debt 1,367,101 1,231,392 135,709 11.0 % Lease liabilities 37,095 32,468 4,627 14.3 % Accounts payable and accrued expenses 30,559 34,237 (3,678 ) (10.7 )% Total liabilities 1,434,755 1,298,097 136,658 10.5 % 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, 14,642 shares issued and 9,835 shares outstanding at September 30, 2023 and 14,391 shares issued and 9,584 shares outstanding at September 30, 2022) 1,464 1,439 25 1.7 % Additional paid-in capital 119,507 111,530 7,977 7.2 % Retained earnings 360,155 346,083 14,072 4.1 % Accumulated other comprehensive loss (398 ) (456 ) 58 12.7 % Treasury stock (4,807 shares at September 30, 2023 and 4,807 shares at September 30, 2022) (150,143 ) (150,143 ) — — Total stockholders’ equity 330,585 308,453 22,132 7.2 % Total liabilities and stockholders’ equity $ 1,765,340 $ 1,606,550 $ 158,790 9.9 % Regional Management Corp. and Subsidiaries Selected Financial Data (Unaudited) (dollars in thousands, except per share amounts) Net Finance Receivables 3Q 23 2Q 23 QoQ $ Inc (Dec) QoQ % Inc (Dec) 3Q 22 YoY $ Inc (Dec) YoY % Inc (Dec) Small loans $ 474,181 $ 444,590 $ 29,591 6.7 % $ 480,199 $ (6,018 ) (1.3 )% Large loans 1,271,891 1,238,031 33,860 2.7 % 1,116,455 155,436 13.9 % Retail loans 4,937 6,316 (1,379 ) (21.8 )% 10,944 (6,007 ) (54.9 )% Total net finance receivables $ 1,751,009 $ 1,688,937 $ 62,072 3.7 % $ 1,607,598 $ 143,411 8.9 % Number of branches at period end 347 347 — — 338 9 2.7 % Net finance receivables per branch $ 5,046 $ 4,867 $ 179 3.7 % $ 4,756 $ 290 6.1 % Averages and Yields 3Q 23 2Q 23 3Q 22 Average Net Finance Receivables Average Yield (1) Average Net Finance Receivables Average Yield (1) Average Net Finance Receivables Average Yield (1) Small loans $ 459,320 36.6 % $ 443,601 34.5 % $ 466,087 35.5 % Large loans 1,257,168 26.3 % 1,223,339 26.0 % 1,089,225 27.2 % Retail loans 5,647 16.9 % 7,191 16.6 % 10,935 18.5 % Total interest and fee yield $ 1,722,135 29.0 % $ 1,674,131 28.2 % $ 1,566,247 29.6 % Total revenue yield $ 1,722,135 32.7 % $ 1,674,131 31.9 % $ 1,566,247 33.6 % (1) Annualized interest and fee income as a percentage of average net finance receivables. Components of Increase in Interest and Fee Income 3Q 23 Compared to 3Q 22 Increase (Decrease) Volume Rate Volume & Rate Total Small loans $ (601 ) $ 1,260 $ (18 ) $ 641 Large loans 11,428 (2,428 ) (375 ) 8,625 Retail loans (245 ) (45 ) 22 (268 ) Product mix 965 (1,106 ) 141 — Total increase in interest and fee income $ 11,547 $ (2,319 ) $ (230 ) $ 8,998 Loans Originated (1) 3Q 23 2Q 23 QoQ $ Inc (Dec) QoQ % Inc (Dec) 3Q 22 YoY $ Inc (Dec) YoY % Inc (Dec) Small loans $ 173,074 $ 149,460 $ 23,614 15.8 % $ 173,269 $ (195 ) (0.1 )% Large loans 251,999 249,514 2,485 1.0 % 243,259 8,740 3.6 % Retail loans — — — — 2,145 (2,145 ) (100.0 )% Total loans originated $ 425,073 $ 398,974 $ 26,099 6.5 % $ 418,673 $ 6,400 1.5 % (1) Represents the principal balance of loan originations and refinancings. Other Key Metrics 3Q 23 2Q 23 3Q 22 Net credit losses $ 47,430 $ 54,951 $ 35,771 Percentage of average net finance receivables (annualized) 11.0 % 13.1 % 9.1 % Provision for credit losses $ 50,930 $ 52,551 $ 48,071 Percentage of average net finance receivables (annualized) 11.8 % 12.6 % 12.3 % Percentage of total revenue 36.2 % 39.4 % 36.6 % General and administrative expenses $ 62,104 $ 56,896 $ 58,164 Percentage of average net finance receivables (annualized) 14.4 % 13.6 % 14.9 % Percentage of total revenue 44.1 % 42.6 % 44.2 % Same store results (1): Net finance receivables at period-end $ 1,684,757 $ 1,636,131 $ 1,552,740 Net finance receivable growth rate 4.9 % 7.2 % 19.2 % Number of branches in calculation 330 329 315 (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 by Aging 3Q 23 2Q 23 3Q 22 Allowance for credit losses $ 184,900 10.6 % $ 181,400 10.7 % $ 179,800 11.2 % Current 1,472,931 84.2 % 1,433,787 84.9 % 1,356,134 84.4 % 1 to 29 days past due 149,648 8.5 % 138,810 8.2 % 135,468 8.4 % Delinquent accounts: 30 to 59 days 36,502 2.1 % 33,676 2.0 % 32,295 2.0 % 60 to 89 days 28,130 1.6 % 24,931 1.5 % 25,375 1.6 % 90 to 119 days 23,420 1.3 % 20,041 1.1 % 21,720 1.3 % 120 to 149 days 21,309 1.2 % 18,087 1.1 % 17,503 1.1 % 150 to 179 days 19,069 1.1 % 19,605 1.2 % 19,103 1.2 % Total contractual delinquency $ 128,430 7.3 % $ 116,340 6.9 % $ 115,996 7.2 % Total net finance receivables $ 1,751,009 100.0 % $ 1,688,937 100.0 % $ 1,607,598 100.0 % 1 day and over past due $ 278,078 15.8 % $ 255,150 15.1 % $ 251,464 15.6 % Contractual Delinquency by Product 3Q 23 2Q 23 3Q 22 Small loans $ 45,438 9.6 % $ 40,894 9.2 % $ 49,906 10.4 % Large loans 82,256 6.5 % 74,637 6.0 % 64,922 5.8 % Retail loans 736 14.9 % 809 12.8 % 1,168 10.7 % Total contractual delinquency $ 128,430 7.3 % $ 116,340 6.9 % $ 115,996 7.2 % Income Statement Quarterly Trend 3Q 22 4Q 22 1Q 23 2Q 23 3Q 23 QoQ $ B(W) YoY $ B(W) Revenue Interest and fee income $ 116,020 $ 117,432 $ 120,407 $ 118,083 $ 125,018 $ 6,935 $ 8,998 Insurance income, net 11,987 10,751 10,959 11,203 11,382 179 (605 ) Other income 3,445 3,833 4,012 4,198 4,478 280 1,033 Total revenue 131,452 132,016 135,378 133,484 140,878 7,394 9,426 Expenses Provision for credit losses 48,071 60,786 47,668 52,551 50,930 1,621 (2,859 ) Personnel 36,979 34,669 38,597 36,419 39,832 (3,413 ) (2,853 ) Occupancy 5,848 5,997 6,288 6,158 6,315 (157 ) (467 ) Marketing 3,940 4,239 3,379 3,844 4,077 (233 ) (137 ) Other 11,397 10,238 11,059 10,475 11,880 (1,405 ) (483 ) Total general and administrative 58,164 55,143 59,323 56,896 62,104 (5,208 ) (3,940 ) Interest expense 11,863 14,855 16,782 16,224 16,947 (723 ) (5,084 ) Income before income taxes 13,354 1,232 11,605 7,813 10,897 3,084 (2,457 ) Income taxes 3,286 (1,159 ) 2,916 1,790 2,077 (287 ) 1,209 Net income $ 10,068 $ 2,391 $ 8,689 $ 6,023 $ 8,820 $ 2,797 $ (1,248 ) Net income per common share: Basic $ 1.09 $ 0.26 $ 0.93 $ 0.64 $ 0.94 $ 0.30 $ (0.15 ) Diluted $ 1.06 $ 0.25 $ 0.90 $ 0.63 $ 0.91 $ 0.28 $ (0.15 ) Weighted-average shares outstanding: Basic 9,195 9,199 9,325 9,399 9,429 (30 ) (234 ) Diluted 9,526 9,411 9,622 9,566 9,650 (84 ) (124 ) Balance Sheet Quarterly Trend 3Q 22 4Q 22 1Q 23 2Q 23 3Q 23 QoQ $ Inc (Dec) YoY $ Inc (Dec) Total assets $ 1,606,550 $ 1,724,987 $ 1,701,114 $ 1,723,616 $ 1,765,340 $ 41,724 $ 158,790 Net finance receivables $ 1,607,598 $ 1,699,393 $ 1,676,230 $ 1,688,937 $ 1,751,009 $ 62,072 $ 143,411 Allowance for credit losses $ 179,800 $ 178,800 $ 183,800 $ 181,400 $ 184,900 $ 3,500 $ 5,100 Debt $ 1,241,039 $ 1,355,359 $ 1,329,677 $ 1,344,855 $ 1,372,748 $ 27,893 $ 131,709 Other Key Metrics Quarterly Trend 3Q 22 4Q 22 1Q 23 2Q 23 3Q 23 QoQ Inc (Dec) YoY Inc (Dec) Interest and fee yield (annualized) 29.6 % 28.5 % 28.5 % 28.2 % 29.0 % 0.8 % (0.6 )% Efficiency ratio (1) 44.2 % 41.8 % 43.8 % 42.6 % 44.1 % 1.5 % (0.1 )% Operating expense ratio (2) 14.9 % 13.4 % 14.0 % 13.6 % 14.4 % 0.8 % (0.5 )% 30+ contractual delinquency 7.2 % 7.1 % 7.2 % 6.9 % 7.3 % 0.4 % 0.1 % Net credit loss ratio (3) 9.1 % 15.0 % 10.1 % 13.1 % 11.0 % (2.1 )% 1.9 % Book value per share $ 32.18 $ 32.41 $ 33.06 $ 32.71 $ 33.61 $ 0.90 $ 1.43 (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 23 YTD 22 Average Net Finance Receivables Average Yield (1) Average Net Finance Receivables Average Yield (1) Small loans $ 456,893 35.4 % $ 448,175 35.8 % Large loans 1,232,170 26.1 % 1,032,273 27.4 % Retail loans 7,252 17.5 % 10,796 18.4 % Total interest and fee yield $ 1,696,315 28.6 % $ 1,491,244 29.8 % Total revenue yield $ 1,696,315 32.2 % $ 1,491,244 33.5 % (1) Annualized interest and fee income as a percentage of average net finance receivables. Components of Increase in Interest and Fee Income YTD 23 Compared to YTD 22 Increase (Decrease) Volume Rate Volume & Rate Total Small loans $ 2,338 $ (1,208 ) $ (24 ) $ 1,106 Large loans 41,004 (9,624 ) (1,864 ) 29,516 Retail loans (488 ) (71 ) 23 (536 ) Product mix 2,997 (2,956 ) (41 ) — Total increase in interest and fee income $ 45,851 $ (13,859 ) $ (1,906 ) $ 30,086 Loans Originated (1) YTD 23 YTD 22 YTD $ Inc (Dec) YTD % Inc (Dec) Small loans $ 432,018 $ 481,644 $ (49,626 ) (10.3 )% Large loans 695,084 682,110 12,974 1.9 % Retail loans 146 7,206 (7,060 ) (98.0 )% Total loans originated $ 1,127,248 $ 1,170,960 $ (43,712 ) (3.7 )% (1) Represents the principal balance of loan originations and refinancings. Other Key Metrics YTD 23 YTD 22 Net credit losses $ 145,049 $ 103,829 Percentage of average net finance receivables (annualized) 11.4 % 9.3 % Provision for credit losses $ 151,149 $ 124,329 Percentage of average net finance receivables (annualized) 11.9 % 11.1 % Percentage of total revenue 36.9 % 33.1 % General and administrative expenses $ 178,323 $ 167,385 Percentage of average net finance receivables (annualized) 14.0 % 15.0 % Percentage of total revenue 43.5 % 44.6 % 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. 3Q 23 Debt $ 1,372,748 Total stockholders' equity 330,585 Less: Intangible assets 15,048 Tangible equity (non-GAAP) $ 315,537 Funded debt-to-equity ratio 4.2 x Funded debt-to-tangible equity ratio (non-GAAP) 4.4 x View source version on businesswire.com: https://www.businesswire.com/news/home/20231101241638/en/Contacts Investor Relations Garrett Edson, (203) 682-8331 investor.relations@regionalmanagement.com
- Net income of $8.8 million and diluted earnings per share of $0.91 - - 30+ day contractual delinquency rate of 7.3% as of September 30, 2023 - - Third quarter ending net receivables of $1.8 billion -
Regional Management Corp. (NYSE: RM), a diversified consumer finance company, today announced results for the third quarter ended September 30, 2023. “With a high-quality portfolio, prudent expense management, and solid execution of our core business, we delivered another set of strong results in the third quarter,” said Robert W. Beck, President and Chief Executive Officer of Regional Management Corp. “We generated $8.8 million of net income and $0.91 of diluted EPS. Strong loan demand and our conservative underwriting criteria led to high-quality portfolio growth of $62 million, record revenue of $141 million, and a sequential increase in revenue yields of 80 basis points. We also continued to manage our expenses closely while furthering our strategic initiatives, driving a 50 basis point improvement in our operating expense ratio from the prior year. We are pleased with our team’s ability to deliver consistent, predictable, and superior results for our shareholders.” “We remain well-positioned to operate effectively in the current economic cycle,” added Mr. Beck. “We ended the quarter with a 30+ day delinquency rate of 7.3%, up 40 basis points from the second quarter, consistent with normal seasonal trends. Our higher-quality originations from credit tightening have kept our first payment default and early-stage delinquency rates below 2019 levels. Recent data indicates a strong labor market, moderating inflation, and real wage growth, but we remain selective in making loans within our tightened credit box. However, with ample liquidity, significant borrowing capacity, and a large addressable market, we stand ready to lean back into growth when justified by the economic conditions and the overall performance of our loan portfolio.” Third Quarter 2023 Highlights Net income for the third quarter of 2023 was $8.8 million and diluted earnings per share was $0.91. Net finance receivables as of September 30, 2023 were $1.8 billion, an increase of $143.4 million, or 8.9%, from the prior-year period. Large loan net finance receivables of $1.3 billion increased $155.4 million, or 13.9%, from the prior-year period and represented 72.6% of the total loan portfolio, compared to 69.4% in the prior-year period. Small loan net finance receivables were $474.2 million, a decrease of 1.3% from the prior-year period. Total loan originations were $425.1 million in the third quarter of 2023, an increase of $6.4 million, or 1.5%, from the prior-year period. Total revenue for the third quarter of 2023 was $140.9 million, an increase of $9.4 million, or 7.2%, from the prior-year period. Interest and fee income increased $9.0 million, or 7.8%, primarily due to higher average net finance receivables. Insurance income, net decreased $0.6 million, or 5.0%, due to lower premiums. Provision for credit losses for the third quarter of 2023 was $50.9 million, an increase of $2.9 million, or 5.9%, from the prior-year period. Annualized net credit losses as a percentage of average net finance receivables for the third quarter of 2023 were 11.0%, compared to 9.1% in the prior-year period. The provision for credit losses for the third quarter of 2023 included a reserve increase of $3.5 million primarily due to portfolio growth during the quarter, partially offset by changes in estimated future macroeconomic impacts on credit losses. Allowance for credit losses was $184.9 million as of September 30, 2023, or 10.6% of net finance receivables. As of September 30, 2023, 30+ day contractual delinquencies totaled $128.4 million, or 7.3% of net finance receivables, an increase of 10 basis points compared to September 30, 2022. The 30+ day contractual delinquency compares favorably to the company’s $184.9 million allowance for credit losses as of September 30, 2023. General and administrative expenses for the third quarter of 2023 were $62.1 million, an increase of $3.9 million, or 6.8%, from the prior-year period. The operating expense ratio (annualized general and administrative expenses as a percentage of average net finance receivables) for the third quarter of 2023 was 14.4%, a 50 basis point improvement compared to the prior-year period. Fourth Quarter 2023 Dividend The company’s Board of Directors has declared a dividend of $0.30 per common share for the fourth quarter of 2023. The dividend will be paid on December 13, 2023 to shareholders of record as of the close of business on November 22, 2023. 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 September 30, 2023, the company had net finance receivables of $1.8 billion and debt of $1.4 billion. The debt consisted of: $131.3 million on the company’s $420 million senior revolving credit facility, $52.2 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 September 30, 2023, the company’s unused capacity to fund future growth on its revolving credit facilities (subject to the borrowing base) was $613 million, or 77.1%, and the company had available liquidity of $179.2 million, including unrestricted cash on hand and immediate availability to draw down cash from its revolving credit facilities. As of September 30, 2023, the company’s fixed-rate debt as a percentage of total debt was 87%, with a weighted-average coupon of 3.6% and a weighted-average revolving duration of 1.3 years. The company had a funded debt-to-equity ratio of 4.2 to 1.0 and a stockholders’ equity ratio of 18.7%, each as of September 30, 2023. On a non-GAAP basis, the company had a funded debt-to-tangible equity ratio of 4.4 to 1.0, as of September 30, 2023. 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 resurgence of COVID-19), 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) 3Q 23 3Q 22 $ % YTD 23 YTD 22 $ % Revenue Interest and fee income $ 125,018 $ 116,020 $ 8,998 7.8 % $ 363,508 $ 333,422 $ 30,086 9.0 % Insurance income, net 11,382 11,987 (605 ) (5.0 )% 33,544 32,751 793 2.4 % Other income 4,478 3,445 1,033 30.0 % 12,688 8,998 3,690 41.0 % Total revenue 140,878 131,452 9,426 7.2 % 409,740 375,171 34,569 9.2 % Expenses Provision for credit losses 50,930 48,071 (2,859 ) (5.9 )% 151,149 124,329 (26,820 ) (21.6 )% Personnel 39,832 36,979 (2,853 ) (7.7 )% 114,848 106,574 (8,274 ) (7.8 )% Occupancy 6,315 5,848 (467 ) (8.0 )% 18,761 17,812 (949 ) (5.3 )% Marketing 4,077 3,940 (137 ) (3.5 )% 11,300 11,139 (161 ) (1.4 )% Other 11,880 11,397 (483 ) (4.2 )% 33,414 31,860 (1,554 ) (4.9 )% Total general and administrative 62,104 58,164 (3,940 ) (6.8 )% 178,323 167,385 (10,938 ) (6.5 )% Interest expense 16,947 11,863 (5,084 ) (42.9 )% 49,953 19,368 (30,585 ) (157.9 )% Income before income taxes 10,897 13,354 (2,457 ) (18.4 )% 30,315 64,089 (33,774 ) (52.7 )% Income taxes 2,077 3,286 1,209 36.8 % 6,783 15,256 8,473 55.5 % Net income $ 8,820 $ 10,068 $ (1,248 ) (12.4 )% $ 23,532 $ 48,833 $ (25,301 ) (51.8 )% Net income per common share: Basic $ 0.94 $ 1.09 $ (0.15 ) (13.8 )% $ 2.51 $ 5.23 $ (2.72 ) (52.0 )% Diluted $ 0.91 $ 1.06 $ (0.15 ) (14.2 )% $ 2.45 $ 5.01 $ (2.56 ) (51.1 )% Weighted-average common shares outstanding: Basic 9,429 9,195 (234 ) (2.5 )% 9,385 9,329 (56 ) (0.6 )% Diluted 9,650 9,526 (124 ) (1.3 )% 9,613 9,738 125 1.3 % Return on average assets (annualized) 2.0 % 2.5 % 1.8 % 4.3 % Return on average equity (annualized) 10.8 % 13.1 % 9.8 % 21.7 % Regional Management Corp. and Subsidiaries Consolidated Balance Sheets (Unaudited) (dollars in thousands, except par value amounts) Increase (Decrease) 3Q 23 3Q 22 $ % Assets Cash $ 7,413 $ 3,140 $ 4,273 136.1 % Net finance receivables 1,751,009 1,607,598 143,411 8.9 % Unearned insurance premiums (48,764 ) (49,789 ) 1,025 2.1 % Allowance for credit losses (184,900 ) (179,800 ) (5,100 ) (2.8 )% Net finance receivables, less unearned insurance premiums and allowance for credit losses 1,517,345 1,378,009 139,336 10.1 % Restricted cash 117,029 113,865 3,164 2.8 % Lease assets 34,864 30,153 4,711 15.6 % Restricted available-for-sale investments 22,510 20,290 2,220 10.9 % Intangible assets 15,048 11,305 3,743 33.1 % Property and equipment 14,157 12,370 1,787 14.4 % Deferred tax assets, net 14,140 16,836 (2,696 ) (16.0 )% Other assets 22,834 20,582 2,252 10.9 % Total assets $ 1,765,340 $ 1,606,550 $ 158,790 9.9 % Liabilities and Stockholders’ Equity Liabilities: Debt $ 1,372,748 $ 1,241,039 $ 131,709 10.6 % Unamortized debt issuance costs (5,647 ) (9,647 ) 4,000 41.5 % Net debt 1,367,101 1,231,392 135,709 11.0 % Lease liabilities 37,095 32,468 4,627 14.3 % Accounts payable and accrued expenses 30,559 34,237 (3,678 ) (10.7 )% Total liabilities 1,434,755 1,298,097 136,658 10.5 % 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, 14,642 shares issued and 9,835 shares outstanding at September 30, 2023 and 14,391 shares issued and 9,584 shares outstanding at September 30, 2022) 1,464 1,439 25 1.7 % Additional paid-in capital 119,507 111,530 7,977 7.2 % Retained earnings 360,155 346,083 14,072 4.1 % Accumulated other comprehensive loss (398 ) (456 ) 58 12.7 % Treasury stock (4,807 shares at September 30, 2023 and 4,807 shares at September 30, 2022) (150,143 ) (150,143 ) — — Total stockholders’ equity 330,585 308,453 22,132 7.2 % Total liabilities and stockholders’ equity $ 1,765,340 $ 1,606,550 $ 158,790 9.9 % Regional Management Corp. and Subsidiaries Selected Financial Data (Unaudited) (dollars in thousands, except per share amounts) Net Finance Receivables 3Q 23 2Q 23 QoQ $ Inc (Dec) QoQ % Inc (Dec) 3Q 22 YoY $ Inc (Dec) YoY % Inc (Dec) Small loans $ 474,181 $ 444,590 $ 29,591 6.7 % $ 480,199 $ (6,018 ) (1.3 )% Large loans 1,271,891 1,238,031 33,860 2.7 % 1,116,455 155,436 13.9 % Retail loans 4,937 6,316 (1,379 ) (21.8 )% 10,944 (6,007 ) (54.9 )% Total net finance receivables $ 1,751,009 $ 1,688,937 $ 62,072 3.7 % $ 1,607,598 $ 143,411 8.9 % Number of branches at period end 347 347 — — 338 9 2.7 % Net finance receivables per branch $ 5,046 $ 4,867 $ 179 3.7 % $ 4,756 $ 290 6.1 % Averages and Yields 3Q 23 2Q 23 3Q 22 Average Net Finance Receivables Average Yield (1) Average Net Finance Receivables Average Yield (1) Average Net Finance Receivables Average Yield (1) Small loans $ 459,320 36.6 % $ 443,601 34.5 % $ 466,087 35.5 % Large loans 1,257,168 26.3 % 1,223,339 26.0 % 1,089,225 27.2 % Retail loans 5,647 16.9 % 7,191 16.6 % 10,935 18.5 % Total interest and fee yield $ 1,722,135 29.0 % $ 1,674,131 28.2 % $ 1,566,247 29.6 % Total revenue yield $ 1,722,135 32.7 % $ 1,674,131 31.9 % $ 1,566,247 33.6 % (1) Annualized interest and fee income as a percentage of average net finance receivables. Components of Increase in Interest and Fee Income 3Q 23 Compared to 3Q 22 Increase (Decrease) Volume Rate Volume & Rate Total Small loans $ (601 ) $ 1,260 $ (18 ) $ 641 Large loans 11,428 (2,428 ) (375 ) 8,625 Retail loans (245 ) (45 ) 22 (268 ) Product mix 965 (1,106 ) 141 — Total increase in interest and fee income $ 11,547 $ (2,319 ) $ (230 ) $ 8,998 Loans Originated (1) 3Q 23 2Q 23 QoQ $ Inc (Dec) QoQ % Inc (Dec) 3Q 22 YoY $ Inc (Dec) YoY % Inc (Dec) Small loans $ 173,074 $ 149,460 $ 23,614 15.8 % $ 173,269 $ (195 ) (0.1 )% Large loans 251,999 249,514 2,485 1.0 % 243,259 8,740 3.6 % Retail loans — — — — 2,145 (2,145 ) (100.0 )% Total loans originated $ 425,073 $ 398,974 $ 26,099 6.5 % $ 418,673 $ 6,400 1.5 % (1) Represents the principal balance of loan originations and refinancings. Other Key Metrics 3Q 23 2Q 23 3Q 22 Net credit losses $ 47,430 $ 54,951 $ 35,771 Percentage of average net finance receivables (annualized) 11.0 % 13.1 % 9.1 % Provision for credit losses $ 50,930 $ 52,551 $ 48,071 Percentage of average net finance receivables (annualized) 11.8 % 12.6 % 12.3 % Percentage of total revenue 36.2 % 39.4 % 36.6 % General and administrative expenses $ 62,104 $ 56,896 $ 58,164 Percentage of average net finance receivables (annualized) 14.4 % 13.6 % 14.9 % Percentage of total revenue 44.1 % 42.6 % 44.2 % Same store results (1): Net finance receivables at period-end $ 1,684,757 $ 1,636,131 $ 1,552,740 Net finance receivable growth rate 4.9 % 7.2 % 19.2 % Number of branches in calculation 330 329 315 (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 by Aging 3Q 23 2Q 23 3Q 22 Allowance for credit losses $ 184,900 10.6 % $ 181,400 10.7 % $ 179,800 11.2 % Current 1,472,931 84.2 % 1,433,787 84.9 % 1,356,134 84.4 % 1 to 29 days past due 149,648 8.5 % 138,810 8.2 % 135,468 8.4 % Delinquent accounts: 30 to 59 days 36,502 2.1 % 33,676 2.0 % 32,295 2.0 % 60 to 89 days 28,130 1.6 % 24,931 1.5 % 25,375 1.6 % 90 to 119 days 23,420 1.3 % 20,041 1.1 % 21,720 1.3 % 120 to 149 days 21,309 1.2 % 18,087 1.1 % 17,503 1.1 % 150 to 179 days 19,069 1.1 % 19,605 1.2 % 19,103 1.2 % Total contractual delinquency $ 128,430 7.3 % $ 116,340 6.9 % $ 115,996 7.2 % Total net finance receivables $ 1,751,009 100.0 % $ 1,688,937 100.0 % $ 1,607,598 100.0 % 1 day and over past due $ 278,078 15.8 % $ 255,150 15.1 % $ 251,464 15.6 % Contractual Delinquency by Product 3Q 23 2Q 23 3Q 22 Small loans $ 45,438 9.6 % $ 40,894 9.2 % $ 49,906 10.4 % Large loans 82,256 6.5 % 74,637 6.0 % 64,922 5.8 % Retail loans 736 14.9 % 809 12.8 % 1,168 10.7 % Total contractual delinquency $ 128,430 7.3 % $ 116,340 6.9 % $ 115,996 7.2 % Income Statement Quarterly Trend 3Q 22 4Q 22 1Q 23 2Q 23 3Q 23 QoQ $ B(W) YoY $ B(W) Revenue Interest and fee income $ 116,020 $ 117,432 $ 120,407 $ 118,083 $ 125,018 $ 6,935 $ 8,998 Insurance income, net 11,987 10,751 10,959 11,203 11,382 179 (605 ) Other income 3,445 3,833 4,012 4,198 4,478 280 1,033 Total revenue 131,452 132,016 135,378 133,484 140,878 7,394 9,426 Expenses Provision for credit losses 48,071 60,786 47,668 52,551 50,930 1,621 (2,859 ) Personnel 36,979 34,669 38,597 36,419 39,832 (3,413 ) (2,853 ) Occupancy 5,848 5,997 6,288 6,158 6,315 (157 ) (467 ) Marketing 3,940 4,239 3,379 3,844 4,077 (233 ) (137 ) Other 11,397 10,238 11,059 10,475 11,880 (1,405 ) (483 ) Total general and administrative 58,164 55,143 59,323 56,896 62,104 (5,208 ) (3,940 ) Interest expense 11,863 14,855 16,782 16,224 16,947 (723 ) (5,084 ) Income before income taxes 13,354 1,232 11,605 7,813 10,897 3,084 (2,457 ) Income taxes 3,286 (1,159 ) 2,916 1,790 2,077 (287 ) 1,209 Net income $ 10,068 $ 2,391 $ 8,689 $ 6,023 $ 8,820 $ 2,797 $ (1,248 ) Net income per common share: Basic $ 1.09 $ 0.26 $ 0.93 $ 0.64 $ 0.94 $ 0.30 $ (0.15 ) Diluted $ 1.06 $ 0.25 $ 0.90 $ 0.63 $ 0.91 $ 0.28 $ (0.15 ) Weighted-average shares outstanding: Basic 9,195 9,199 9,325 9,399 9,429 (30 ) (234 ) Diluted 9,526 9,411 9,622 9,566 9,650 (84 ) (124 ) Balance Sheet Quarterly Trend 3Q 22 4Q 22 1Q 23 2Q 23 3Q 23 QoQ $ Inc (Dec) YoY $ Inc (Dec) Total assets $ 1,606,550 $ 1,724,987 $ 1,701,114 $ 1,723,616 $ 1,765,340 $ 41,724 $ 158,790 Net finance receivables $ 1,607,598 $ 1,699,393 $ 1,676,230 $ 1,688,937 $ 1,751,009 $ 62,072 $ 143,411 Allowance for credit losses $ 179,800 $ 178,800 $ 183,800 $ 181,400 $ 184,900 $ 3,500 $ 5,100 Debt $ 1,241,039 $ 1,355,359 $ 1,329,677 $ 1,344,855 $ 1,372,748 $ 27,893 $ 131,709 Other Key Metrics Quarterly Trend 3Q 22 4Q 22 1Q 23 2Q 23 3Q 23 QoQ Inc (Dec) YoY Inc (Dec) Interest and fee yield (annualized) 29.6 % 28.5 % 28.5 % 28.2 % 29.0 % 0.8 % (0.6 )% Efficiency ratio (1) 44.2 % 41.8 % 43.8 % 42.6 % 44.1 % 1.5 % (0.1 )% Operating expense ratio (2) 14.9 % 13.4 % 14.0 % 13.6 % 14.4 % 0.8 % (0.5 )% 30+ contractual delinquency 7.2 % 7.1 % 7.2 % 6.9 % 7.3 % 0.4 % 0.1 % Net credit loss ratio (3) 9.1 % 15.0 % 10.1 % 13.1 % 11.0 % (2.1 )% 1.9 % Book value per share $ 32.18 $ 32.41 $ 33.06 $ 32.71 $ 33.61 $ 0.90 $ 1.43 (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 23 YTD 22 Average Net Finance Receivables Average Yield (1) Average Net Finance Receivables Average Yield (1) Small loans $ 456,893 35.4 % $ 448,175 35.8 % Large loans 1,232,170 26.1 % 1,032,273 27.4 % Retail loans 7,252 17.5 % 10,796 18.4 % Total interest and fee yield $ 1,696,315 28.6 % $ 1,491,244 29.8 % Total revenue yield $ 1,696,315 32.2 % $ 1,491,244 33.5 % (1) Annualized interest and fee income as a percentage of average net finance receivables. Components of Increase in Interest and Fee Income YTD 23 Compared to YTD 22 Increase (Decrease) Volume Rate Volume & Rate Total Small loans $ 2,338 $ (1,208 ) $ (24 ) $ 1,106 Large loans 41,004 (9,624 ) (1,864 ) 29,516 Retail loans (488 ) (71 ) 23 (536 ) Product mix 2,997 (2,956 ) (41 ) — Total increase in interest and fee income $ 45,851 $ (13,859 ) $ (1,906 ) $ 30,086 Loans Originated (1) YTD 23 YTD 22 YTD $ Inc (Dec) YTD % Inc (Dec) Small loans $ 432,018 $ 481,644 $ (49,626 ) (10.3 )% Large loans 695,084 682,110 12,974 1.9 % Retail loans 146 7,206 (7,060 ) (98.0 )% Total loans originated $ 1,127,248 $ 1,170,960 $ (43,712 ) (3.7 )% (1) Represents the principal balance of loan originations and refinancings. Other Key Metrics YTD 23 YTD 22 Net credit losses $ 145,049 $ 103,829 Percentage of average net finance receivables (annualized) 11.4 % 9.3 % Provision for credit losses $ 151,149 $ 124,329 Percentage of average net finance receivables (annualized) 11.9 % 11.1 % Percentage of total revenue 36.9 % 33.1 % General and administrative expenses $ 178,323 $ 167,385 Percentage of average net finance receivables (annualized) 14.0 % 15.0 % Percentage of total revenue 43.5 % 44.6 % 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. 3Q 23 Debt $ 1,372,748 Total stockholders' equity 330,585 Less: Intangible assets 15,048 Tangible equity (non-GAAP) $ 315,537 Funded debt-to-equity ratio 4.2 x Funded debt-to-tangible equity ratio (non-GAAP) 4.4 x View source version on businesswire.com: https://www.businesswire.com/news/home/20231101241638/en/