Core Viewpoint - Regional Management Corp. (RM) reported a mixed performance in its fourth-quarter 2024 results, with earnings exceeding expectations but impacted by high credit loss provisions and increased personnel costs [1][2]. Financial Performance - Adjusted earnings per share (EPS) for Q4 2024 were 98 cents, surpassing the Zacks Consensus Estimate by 11.4%, compared to a loss of 80 cents per share in the same quarter last year [2]. - Total revenues increased by 9.3% year over year to $154.8 million, beating the consensus estimate by 1.8% [2]. - Interest and fee income rose 9.6% year over year to $138.2 million, exceeding the Zacks Consensus Estimate of $136.6 million [3]. - Net insurance income grew 7.3% year over year to $11.8 million, surpassing the consensus mark of $10.8 million [3]. - Provision for credit losses increased by 16.3% year over year to $57.6 million [3]. - General and administrative expenses totaled $64.6 million, a slight increase of 0.2% year over year, primarily due to higher personnel costs [4]. - The efficiency ratio improved by 390 basis points year over year to 41.8% [4]. - Net income for the quarter was $9.9 million, compared to a loss of $7.6 million in the prior-year quarter [4]. Loan and Asset Growth - Net finance receivables reached $1.9 billion at the end of Q4, reflecting a year-over-year growth of 6.8% [5]. - Small loans increased by 12.4% year over year to $554.7 million, while large loans rose by 4.9% to $1.3 billion [5]. - Total loan originations for the December quarter were $475.9 million, marking a 16.7% year-over-year improvement [5]. Financial Position - As of December 31, 2024, cash balance was $4 million, down 12.4% year over year [6]. - Total assets increased by 6.4% year over year to $1.9 billion [6]. - Net debt rose by 5.5% year over year to $1.5 billion, with total liabilities growing by 5.4% to $1.6 billion [6]. - Total shareholders' equity advanced by 10.8% year over year to $357.1 million [6]. Dividend Announcement - For Q1 2025, Regional Management announced a dividend of 30 cents per share, payable on March 13, 2025, to shareholders of record as of February 20 [7]. Full-Year Results - In 2024, total revenues increased by 6.7% to $588.5 million, with adjusted EPS of $4.14 more than doubling year over year [9]. Outlook - Management targets at least 10% portfolio growth and a significant increase in net income for 2025 [10]. - General and administrative expenses for Q1 2025 are expected to be between $65 million and $65.5 million, while interest expenses are estimated to be between $20 million and $20.5 million [10]. - A decrease of 90 basis points in total revenue yield is anticipated for Q1, with net credit losses expected to be around $60 million [11].

Core Viewpoint - The article emphasizes the importance of value investing and highlights Regional Management (RM) as a strong value stock based on various financial metrics [2][7]. Company Overview - Regional Management (RM) has a Zacks Rank of 2 (Buy) and a Value grade of A, indicating strong potential for value investors [4]. - The stock has a Forward P/E ratio of 6.80, significantly lower than the industry average of 10.22, suggesting it may be undervalued [4]. Financial Metrics - RM's P/B ratio is 1.06, which is attractive compared to the industry's average P/B of 1.16. The P/B ratio has fluctuated between 0.64 and 1.06 over the past 52 weeks [5]. - The P/S ratio for RM is 0.62, compared to the industry's average P/S of 1.47, further indicating potential undervaluation [6]. Investment Outlook - The combination of RM's favorable financial metrics and strong earnings outlook positions it as one of the market's strongest value stocks [7].

Company Performance - Regional Management's shares have increased by 10.3% over the past month, reaching a new 52-week high of $37.52 [1] - The company has reported a 6.4% gain since the start of the year, compared to the Zacks Finance sector's 6.6% and the Financial - Consumer Loans industry's 14.2% [1] Earnings and Revenue Expectations - For the current fiscal year, Regional Management is projected to achieve earnings of $5.29 per share on revenues of $625.35 million, reflecting a 27.78% increase in EPS and a 6.26% increase in revenues [3] - For the next fiscal year, earnings are expected to rise to $6.77 per share on $673.86 million in revenues, indicating a year-over-year change of 28.04% in EPS and 7.76% in revenues [3] Valuation Metrics - The stock currently trades at 6.8X current fiscal year EPS estimates, below the peer industry average of 10.6X [7] - On a trailing cash flow basis, the stock trades at 12.5X compared to the peer group's average of 11.2X, suggesting it is not among the top value stocks [7] Zacks Rank and Style Scores - Regional Management holds a Zacks Rank of 2 (Buy) due to rising earnings estimates, meeting the criteria for potential gains [8] - The company has a Value Score of A, a Growth Score of B, and a Momentum Score of D, resulting in a combined VGM Score of A [6] Industry Comparison - The Financial - Consumer Loans industry is positioned in the top 32% of all industries, indicating favorable conditions for both Regional Management and its peers [11] - Discover Financial Services, a competitor, has also shown strong performance with a Zacks Rank of 2 (Buy) and a significant earnings beat of 61.20% in the last quarter [10]

Financial Data and Key Metrics Changes - The company reported a net income of $9.9 million and diluted earnings per share of $0.98, a significant improvement from a net loss of $7.6 million in the prior year [7][17] - Total revenue for 2024 increased by 7% compared to 2023, with total revenue yields improving by 70 basis points year-over-year [16][17] - The net credit loss rate improved by 120 basis points in 2024, and the operating expense ratio improved by 40 basis points year-over-year [16] Business Line Data and Key Metrics Changes - The loan portfolio grew by $120 million in 2024, with record quarterly revenue of $155 million in Q4, up 9% from the prior year [9][36] - The auto-secured portfolio grew by 34% in 2024, now representing 10.9% of the total portfolio, while the small loan portfolio increased by 12% year-over-year [32] - Approximately 19% of the portfolio carried an APR greater than 36%, up from 16% a year ago, reflecting a 26% balance increase in 2024 [32] Market Data and Key Metrics Changes - The company experienced strong loan demand in Q4, with total originations up 17% year-over-year [30] - The 30-plus-day delinquency rate was 7.7%, up 80 basis points year-over-year, but 10 basis points better than the prior year when adjusted for a special loan sale [13][37] - The company expects to originate higher loan volumes in the first quarter, although it is typically the softest quarter due to seasonal impacts [34] Company Strategy and Development Direction - The company plans to pursue a minimum of 10% portfolio growth in 2025 while continuing to invest in strategic initiatives [57] - The barbell strategy of balancing low-risk auto-secured loans with higher-rate small loans is expected to drive returns [62][121] - The company is focused on maintaining expense discipline while investing in growth capabilities and technology [45][121] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in improving consumer health, citing low unemployment and real wage growth as positive indicators [72][76] - The company anticipates continued improvement in portfolio quality and credit loss performance in 2025, assuming stable economic conditions [15][17] - Management acknowledged the challenges posed by inflation but remains optimistic about the potential for growth in 2025 [76] Other Important Information - The company declared a dividend of $0.30 per common share for the first quarter, to be paid on March 13, 2025 [54] - The company repurchased over 100,000 shares of common stock in Q4 at a weighted average price of $33.83 per share [55] - The effective tax rate for Q4 was 22.3%, with an expected rate of approximately 24.5% for the first quarter of 2025 [50] Q&A Session Summary Question: Product mix between large and smaller installment loans - Management will continue to lean into the auto-secured business while balancing growth in higher-rate small loans [62] Question: Performance of the 2024 vintage versus the 2023 vintage - Newer originations are performing in line with expectations, with delinquencies on the front book at 7.2% compared to 11.9% on the back book [64] Question: Impact of potential interest rate cuts - Management has calculated the potential impact of rate cuts but will not disclose specifics [67] Question: Indicators of improving consumer health - Management cited low unemployment, real wage growth, and a strong job market as indicators of improving consumer health [72][76] Question: Competitive dynamics in the small loan category - Management does not see significant changes in competitive dynamics and believes they can grow in this space as needed [78] Question: Clarification on net income guidance - Management confirmed that net income is expected to be higher than the $41 million reported in 2024 [88][96] Question: G&A expenses guidance - Management provided guidance of $65 million to $65.5 million for the first quarter [100] Question: Cost of funds outlook - Management indicated that while some older securitizations will reset at higher rates, variable rates may decrease if interest rate cuts occur [104][106] Question: Credit reserve rate expectations - Management expects the credit reserve rate to remain flat in the first quarter, with potential improvements as the year progresses [110] Question: Tax refunds impact - Management stated it is too early to determine the impact of tax refunds for the current year [117]

This document contains summarized information concerning Regional Management Corp. (the "Company") and the Company's business, operations, financial performance, and trends. No representation is made that the information in this document is complete. For additional financial, statistical, and business information, please see the Company's most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the U.S. Securities and Exchange Commission (the "SEC"), as well as the Company's othe ...

Group 1: Earnings Performance - Regional Management reported quarterly earnings of $0.98 per share, exceeding the Zacks Consensus Estimate of $0.88 per share, and up from $0.54 per share a year ago, representing an earnings surprise of 11.36% [1] - The company posted revenues of $154.83 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 1.75% and increasing from $141.66 million year-over-year [2] Group 2: Stock Performance and Outlook - Regional Management shares have increased approximately 7.4% since the beginning of the year, compared to the S&P 500's gain of 2.7% [3] - The current consensus EPS estimate for the upcoming quarter is $1.48 on revenues of $155.74 million, and for the current fiscal year, it is $5.29 on revenues of $625.35 million [7] Group 3: Industry Context - The Financial - Consumer Loans industry, to which Regional Management belongs, is currently in the top 35% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8]

Execution Version Second Amendment to Credit Agreement and Consent This Second Amendment to Credit Agreement and Consent, dated as of January 31, 2025 (this "Amendment"), is entered into by and among Regional Management Receivables VI, LLC, a Delaware limited liability company (the "Borrower"), Regional Management Corp., a Delaware corporation, as servicer (the "Servicer"), the Lenders party hereto, and Regions Bank ("Regions"), as administrative agent (the "Administrative Agent"). Capitalized terms used an ...

Regional Management Corp. (RM) recently launched a $30 million stock buyback program authorized by its board of directors. The company aims to opportunistically repurchase shares when it believes the stock is undervalued, leveraging its financial position and liquidity.The buyback program is effective immediately and will run through Dec. 31, 2026. It reflects the company’s confidence in its financial health and aims to enhance shareholder value. Earlier, Regional Management announced a dividend of 30 cents ...

Regional Management Corp. (RM) announced the launch of a stock repurchase program. It has also outlined growth expectations for 2025.Details of RM’s Share Repurchase ProgramThe company’s board of directors authorized a stock repurchase program for its outstanding common stock worth up to $30 million. The authorization is effective immediately and will continue through Dec. 31, 2026.The timing and volume of the repurchases under the stock buyback program will depend on various factors, including market condi ...

Shares of Regional Management Corp. (RM) have lost 9.3% since it reported third-quarter 2024 results on Nov. 6, after the closing bell. Despite an earnings beat, investors might be concerned about the impact of Hurricane Helene and rising provision for credit losses on the company’s earnings. Higher interest and fee income and net financial receivables partially offset the negatives.It reported third-quarter 2024 adjusted earnings per share (EPS) of $1.18, which beat the Zacks Consensus Estimate by 12.4%. T ...