UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period ended Commission File Number: 001-35477 Regional Management Corp. (Exact name of registrant as specified in its charter) Delaware 57-0847115 (State or other jurisdiction of in ...

Regional Management Corp. (NYSE:RM) Q1 2022 Results Conference Call May 4, 2022 5:00 PM ET Company Participants Garrett Edson - ICR Inc. Rob Beck - President and CEO Harp Rana - CFO Conference Call Participants David Scharf - JMP Securities John Hecht - Jefferies Steven Kwok - KBW John Rowan - Janney Montgomery Scott Operator Thank you for standing by. This is the conference operator. Welcome to the Regional Management Corp. First Quarter 2022 Earnings Conference Call. [Operator Instructions] I would now li ...

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company's Q1 2022 financial statements reflect asset growth, higher net income, and an increased provision for credit losses [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Total assets grew to nearly $1.5 billion, driven by an increase in net finance receivables and funded by higher debt Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Total Assets** | **$1,497,671** | **$1,459,662** | | Net finance receivables | $1,240,196 | $1,219,120 | | **Total Liabilities** | **$1,198,929** | **$1,176,926** | | Net debt | $1,122,376 | $1,096,943 | | **Total Stockholders' Equity** | **$298,742** | **$282,736** | [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) Revenue grew 23.7% YoY, but a significant increase in the provision for credit losses moderated net income growth Consolidated Income Statement Summary (in thousands, except per share data) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Total Revenue | $120,848 | $97,731 | | Provision for credit losses | $30,858 | $11,362 | | Total general and administrative expenses | $55,100 | $45,843 | | Net Income | $26,783 | $25,522 | | Diluted EPS | $2.67 | $2.31 | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow increased, while investing activities used more cash due to higher loan originations Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $45,787 | $35,012 | | Net cash provided by (used in) investing activities | ($49,355) | $14,851 | | Net cash provided by (used in) financing activities | $10,933 | ($35,501) | | **Net change in cash and restricted cash** | **$7,365** | **$14,362** | [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail the composition of the $1.45 billion loan portfolio, credit loss allowance, debt structure, and capital return activities - The company offers small, large, and retail installment loans, with operations in **354 branches across 14 states** as of March 31, 2022[20](index=20&type=chunk) Net Finance Receivables by Type (in thousands) | Loan Type | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Small loans | $438,153 | $445,023 | | Large loans | $997,226 | $970,694 | | Retail loans | $10,692 | $10,540 | | **Total** | **$1,446,071** | **$1,426,257** | Allowance for Credit Losses Reconciliation - Q1 2022 (in thousands) | Description | Amount | | :--- | :--- | | Beginning balance (Jan 1, 2022) | $159,300 | | Provision for credit losses | $30,858 | | Credit losses | ($32,780) | | Recoveries | $1,422 | | **Ending balance (Mar 31, 2022)** | **$158,800** | - In February 2022, the company completed a **$250 million asset-backed securitization** (RMIT 2022-1) and terminated the RMIT 2019-1 securitization[67](index=67&type=chunk)[73](index=73&type=chunk) - Subsequent to the quarter end, in April 2022, the company sold interest rate cap contracts with a fair value of **$6.7 million** and a notional amount of **$300.0 million**[111](index=111&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses strong portfolio growth, rising credit loss provisions, and the company's solid liquidity position [Outlook](index=28&type=section&id=Outlook) Management acknowledges macroeconomic uncertainties while highlighting the company's strong liquidity and risk management approach - The company's net finance receivables grew by **$340.5 million** compared to the prior-year period, reaching **$1.4 billion** as of March 31, 2022[118](index=118&type=chunk) - As of March 31, 2022, the allowance for credit losses included **$15.9 million in reserves** for potential future macroeconomic impacts[121](index=121&type=chunk) - The company had **$214.6 million of available liquidity** as of March 31, 2022, comprising unrestricted cash and immediate borrowing capacity[122](index=122&type=chunk) [Results of Operations](index=31&type=section&id=Results%20of%20Operations) Q1 2022 net income rose slightly as revenue growth was largely offset by a 171.6% increase in credit loss provisions Net Finance Receivables Growth (YoY) | Loan Type | 1Q 22 (in thousands) | 1Q 21 (in thousands) | YoY % Inc (Dec) | | :--- | :--- | :--- | :--- | | Small loans | $438,153 | $371,188 | 18.0% | | Large loans | $997,226 | $722,474 | 38.0% | | **Total** | **$1,446,071** | **$1,105,603** | **30.8%** | - Interest and fee income increased **23.3% YoY to $107.6 million**, driven by a 27.7% increase in average net finance receivables[153](index=153&type=chunk) - The provision for credit losses increased by **$19.5 million (171.6%) YoY**, due to a $9.6 million increase in net credit losses and a smaller reserve release[160](index=160&type=chunk) - Contractual delinquency (30+ days past due) increased to **5.7%** as of March 31, 2022, compared to 4.3% in the prior-year period, indicating credit normalization[163](index=163&type=chunk) - Interest expense decreased by **$7.2 million YoY**, primarily due to a significant increase in the fair value of the company's interest rate caps[170](index=170&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong liquidity position and continues its capital return program through share repurchases and dividends - The company's funded debt-to-equity ratio was **3.8 to 1.0**, and its stockholders' equity ratio was **19.9%** as of March 31, 2022[172](index=172&type=chunk) - In February 2022, the Board authorized a new **$20.0 million stock repurchase program**, extending through February 2024, with $8.4 million used as of March 31, 2022[179](index=179&type=chunk) - A quarterly cash dividend of **$0.30 per share** was declared and paid during Q1 2022, totaling **$3.0 million**[180](index=180&type=chunk) - In February 2022, the company completed a **$250 million asset-backed securitization** (RMIT 2022-1) with a revolving period ending in February 2025[199](index=199&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=43&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate risk, which is managed through fixed-rate debt and interest rate caps - As of March 31, 2022, **88.6% of the company's debt carried a fixed interest rate**[226](index=226&type=chunk) Variable-Rate Debt Summary (as of March 31, 2022) | Facility | Balance (in thousands) | Rate Type | | :--- | :--- | :--- | | Senior | $44,919 | 1-mo LIBOR | | RMR II Warehouse | $33,536 | 3-mo LIBOR | | RMR IV Warehouse | $31,618 | 1-mo LIBOR | | RMR V Warehouse | $19,406 | Conduit | | **Total** | **$129,479** | | - The company utilizes interest rate cap contracts with an aggregate notional amount of **$550.0 million** to manage interest rate risk on its LIBOR-based borrowings[226](index=226&type=chunk) [Item 4. Controls and Procedures](index=44&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective with no material changes to internal controls - The Chief Executive Officer and Chief Financial Officer concluded that the company's **disclosure controls and procedures were effective** as of March 31, 2022[229](index=229&type=chunk) - **No changes in internal control over financial reporting** occurred during the quarter that materially affected, or are reasonably likely to materially affect, these controls[230](index=230&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=45&type=section&id=Item%201.%20Legal%20Proceedings) Ongoing legal proceedings are not expected to have a material adverse effect on the company's financial condition - The company is involved in various legal proceedings from the ordinary course of business, which are **not expected to have a material adverse effect** on its financial condition[232](index=232&type=chunk) [Item 1A. Risk Factors](index=45&type=section&id=Item%201A.%20Risk%20Factors) No material changes were reported to the risk factors previously disclosed in the company's Form 10-K - **No material changes** have been made to the risk factors disclosed in the Annual Report on Form 10-K for the fiscal year ended December 31, 2021[233](index=233&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=45&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased 184,169 shares during the quarter under a new $20.0 million stock repurchase program Issuer Purchases of Equity Securities (Q1 2022) | Period | Total Shares Purchased | Weighted-Average Price Paid per Share | | :--- | :--- | :--- | | Jan 2022 | 11,393 | $52.67 | | Feb 2022 | 39,006 | $52.12 | | Mar 2022 | 133,770 | $47.79 | | **Total** | **184,169** | **$49.00** | - On February 9, 2022, the Board authorized a new **$20.0 million stock repurchase program**, effective immediately and extending through February 23, 2024[235](index=235&type=chunk) [Item 6. Exhibits](index=46&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including agreements, plan amendments, and officer certifications

n RM LISTED NYSE 1Q 2022 Earnings Presentation May 4th, 2022 Legal Disclosures 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 ...

Part I [Business](index=4&type=section&id=ITEM%201%2E%20BUSINESS%2E) Regional Management Corp. is a diversified consumer finance company providing installment loans to customers with limited access to traditional credit Overview and Products - As of December 31, 2021, the company operated **350 branch locations** in 13 states, serving **460,600 active accounts**[15](index=15&type=chunk) - The company ceased originating automobile purchase loans in November 2017 but continues to service the existing portfolio, which had **$1.3 million** in finance receivables as of December 31, 2021[17](index=17&type=chunk) Loan Portfolio and Revenue Contribution by Product (2021) | Product Type | Finance Receivables (Dec 31, 2021) | Number of Loans (Dec 31, 2021) | Average Loan Size | 2021 Interest & Fee Income | | :--- | :--- | :--- | :--- | :--- | | **Small Loans** | $445.0 million | 269,500 | ~$1,700 | $150.6 million | | **Large Loans** | $969.4 million | 184,100 | ~$5,300 | $229.5 million | | **Retail Loans** | $10.5 million | 6,700 | ~$1,600 | $2.1 million | | **Insurance** | N/A | N/A | N/A | $35.5 million (Net Income) | Business Model and Strategies - The company utilizes a multiple channel platform including branches, direct mail, digital partners, and its website, with nearly **77% of 2021 loan originations** facilitated by a branch location[24](index=24&type=chunk)[26](index=26&type=chunk) - Total finance receivables grew at a **14.4% CAGR** from **$729.2 million** in 2016 to **$1.4 billion** in 2021, with core small and large loan receivables growing at an **18.5% CAGR** over the same period[29](index=29&type=chunk) - Key growth strategies include expanding its geographic presence into at least five additional states by the end of 2022, leveraging direct mail marketing, and improving digital capabilities, with digitally sourced volumes reaching over **28% of new customer volumes** in Q4 2021[31](index=31&type=chunk)[32](index=32&type=chunk)[34](index=34&type=chunk) - The company plans to introduce a next-generation custom credit model in 2022, expected to provide significant advancements in underwriting by leveraging new alternative data sources[36](index=36&type=chunk) Loan Portfolio Details - Loan renewals are an important part of the business, allowing existing customers to extend and expand their lending relationships, with over **41,000 small loans** refinanced into large loans in 2021, reducing customers' average APR from **42.8% to 30.7%**[22](index=22&type=chunk)[42](index=42&type=chunk) Small Loan Portfolio Details (2021) | Metric | Value | | :--- | :--- | | Average Originated Principal | $2,032 | | Average Originated Term | 22 months | | Average Portfolio Yield | 38.2% | Large Loan Portfolio Details (2021) | Metric | Value | | :--- | :--- | | Average Originated Principal | $6,134 | | Average Originated Term | 46 months | | Average Portfolio Yield | 28.5% | Human Capital and Operations - As of December 31, 2021, the company had **1,691 employees**, with **1,332** in field operations and **359** in headquarters, and established a company minimum wage of **$15 per hour** in 2021[62](index=62&type=chunk) - The company is committed to Diversity, Equity, and Inclusion (DE&I), appointing its first Director of DE&I in 2020 and adopting a strategic plan in 2021[63](index=63&type=chunk) - In Q4 2021, over **80% of customer payments** were made by debit card or ACH, indicating a strong shift towards digital payment methods[68](index=68&type=chunk) - The company utilizes a customized loan origination and servicing platform from Nortridge Software, LLC, to automate underwriting decisions and manage the loan portfolio[72](index=72&type=chunk) Regulation and Competition - The consumer finance industry is highly fragmented and competitive, with the company competing against large national companies, smaller regional operators, independent lenders, online lenders, and alternative financial service providers[75](index=75&type=chunk)[76](index=76&type=chunk) - The business is subject to extensive regulation at federal, state, and local levels, with the Dodd-Frank Act establishing the Consumer Financial Protection Bureau (CFPB), which has significant supervisory and enforcement power over consumer financial products[80](index=80&type=chunk)[83](index=83&type=chunk) - The business experiences seasonality, with loan demand typically highest in the second, third, and fourth quarters and lowest in the first quarter, while delinquencies tend to be lowest in the first half and rise in the second half[78](index=78&type=chunk) [Risk Factors](index=15&type=section&id=ITEM%201A%2E%20Risk%20Factors) The company faces diverse risks including operational, credit, regulatory, and stock ownership factors that could impact its business Risks Related to Business and Operations - The COVID-19 pandemic continues to pose risks, including potential impacts on loan growth, collections, credit losses, and disruptions from branch closures or increased operating costs[95](index=95&type=chunk)[96](index=96&type=chunk)[97](index=97&type=chunk) - The convenience check strategy, which accounted for **22.8% of originated loan value** in 2021, carries risks such as higher default rates, fraud, and potential regulatory changes that could prohibit the practice[106](index=106&type=chunk) - The company is exposed to credit risk from its non-prime borrowers, who are more likely to be severely affected by adverse macroeconomic conditions, potentially leading to higher default rates[105](index=105&type=chunk)[108](index=108&type=chunk) - Significant reliance on third-party IT providers, including Nortridge for its loan management system and Amazon Web Services (AWS) for infrastructure, exposes the company to risks of system failures or service disruptions[137](index=137&type=chunk)[144](index=144&type=chunk) - Employee turnover is a notable risk, with branch employee turnover at **52%** in 2021, increasing operational costs and making it more difficult to maintain service and underwriting standards[159](index=159&type=chunk) Risks Related to Regulation and Legal Proceedings - The business is strictly regulated at federal, state, and local levels, governing interest rates, fees, collection practices, and licensing, with non-compliance potentially leading to significant fines, penalties, and license revocation[198](index=198&type=chunk)[200](index=200&type=chunk)[205](index=205&type=chunk) - The Dodd-Frank Act and the Consumer Financial Protection Bureau (CFPB) create significant regulatory uncertainty, as the CFPB has broad authority to regulate consumer financial products and prohibit "unfair, deceptive or abusive" practices, which could increase compliance costs and restrict product offerings[217](index=217&type=chunk)[220](index=220&type=chunk)[222](index=222&type=chunk) - Potential legislative changes pose a material risk, such as proposed federal legislation seeking to extend the Military Lending Act's **36% interest rate cap** to all consumers, which, if enacted, would materially and adversely affect the business[213](index=213&type=chunk) Risks Related to the Ownership of Our Common Stock - The market price of the company's common stock has been highly volatile and could be subject to wide fluctuations due to market conditions, operating results, or changes in regulations[237](index=237&type=chunk) - Future cash dividends are not guaranteed and are at the discretion of the Board of Directors, with the ability to pay dividends potentially limited by financial performance and covenants in debt agreements[238](index=238&type=chunk) - Anti-takeover provisions in the company's charter documents and Delaware law could discourage or delay acquisition attempts that stockholders might consider favorable[240](index=240&type=chunk)[242](index=242&type=chunk) [Unresolved Staff Comments](index=43&type=section&id=ITEM%201B%2E%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the Securities and Exchange Commission - None[245](index=245&type=chunk) [Properties](index=43&type=section&id=ITEM%202%2E%20Properties) The company's headquarters and all 354 branches are leased properties, considered well-maintained and adequate for operations - The company's headquarters is located in a leased facility of approximately **51,700 square feet** in Greer, South Carolina[246](index=246&type=chunk) - As of March 1, 2022, each of the **354 branches** is leased, with an average size of about **1,604 square feet**[246](index=246&type=chunk) [Legal Proceedings](index=43&type=section&id=ITEM%203%2E%20Legal%20Proceedings) The company is involved in various legal proceedings but does not expect a material adverse effect on its financials - The company is involved in various legal proceedings from the ordinary course of business but does not expect them to have a material adverse effect on its financial condition[247](index=247&type=chunk) [Mine Safety Disclosures](index=43&type=section&id=ITEM%204%2E%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[248](index=248&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=44&type=section&id=ITEM%205%2E%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities%2E) The company's common stock trades on NYSE, with active quarterly dividends and ongoing stock repurchase programs Dividends Declared Per Common Share (2021) | Quarter Ended | Dividends Declared Per Share | | :--- | :--- | | March 31, 2021 | $0.20 | | June 30, 2021 | $0.25 | | September 30, 2021 | $0.25 | | December 31, 2021 | $0.25 | | **Total** | **$0.95** | - On February 9, 2022, the Board of Directors declared a quarterly dividend of **$0.30 per share**, an increase from the previous **$0.25 per share**[252](index=252&type=chunk) Issuer Purchases of Equity Securities (Q4 2021) | Period | Total Shares Purchased | Weighted Average Price Paid per Share | | :--- | :--- | :--- | | Oct 2021 | 75,893 | $56.31 | | Nov 2021 | 96,942 | $58.34 | | Dec 2021 | 26,320 | $56.98 | | **Total** | **199,155** | **$57.38** | - In January 2022, the company completed its **$50.0 million** stock repurchase program, and on February 9, 2022, the Board authorized a new stock repurchase program for up to **$20.0 million** of its common stock, extending through February 3, 2024[255](index=255&type=chunk)[256](index=256&type=chunk) [Reserved](index=47&type=section&id=ITEM%206%2E%20Reserved) This item is not applicable [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=48&type=section&id=ITEM%207%2E%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Net income surged 231.8% to $88.7 million in 2021, driven by revenue growth, reduced credit loss provision, and strong liquidity Results of Operations (2021 vs. 2020) Key Financial Results (2021 vs. 2020) | Metric (in millions) | 2021 | 2020 | % Change | | :--- | :--- | :--- | :--- | | Total Revenue | $428.4 | $373.9 | 14.6% | | Provision for Credit Losses | $89.0 | $123.8 | (28.1)% | | General & Admin Expenses | $195.5 | $176.3 | 10.9% | | Interest Expense | $31.3 | $37.9 | (17.2)% | | **Net Income** | **$88.7** | **$26.7** | **231.8%** | - Total net finance receivables grew **25.5%** to **$1.43 billion** at year-end 2021, driven by a **35.5% increase** in the large loan portfolio to **$969.4 million**[300](index=300&type=chunk) - The provision for credit losses decreased by **$34.8 million**, primarily due to the release of COVID-19 reserves and a **$16.4 million decrease** in net credit losses compared to the prior year[308](index=308&type=chunk) - Contractual delinquency as a percentage of net finance receivables increased to **6.0%** as of December 31, 2021, from **5.3%** a year prior, as delinquency levels began to normalize[311](index=311&type=chunk) Liquidity and Capital Resources - As of December 31, 2021, the company had a funded debt-to-equity ratio of **3.9 to 1.0** and total debt of **$1.1 billion**[323](index=323&type=chunk) - The company had **$556.8 million** of unused capacity on its revolving credit facilities (subject to borrowing base) and **$209.7 million** of immediate liquidity (unrestricted cash plus immediate availability) as of December 31, 2021[272](index=272&type=chunk)[324](index=324&type=chunk) Future Material Financial Obligations (as of Dec 31, 2021) | Obligation Type (in thousands) | Next Twelve Months | Beyond Twelve Months | Total | | :--- | :--- | :--- | :--- | | Principal payments on debt | $74,703 | $1,033,250 | $1,107,953 | | Interest payments on debt | $28,635 | $60,710 | $89,345 | | Operating lease obligations | $7,248 | $28,068 | $35,316 | | **Total** | **$110,586** | **$1,122,028** | **$1,232,614** | Critical Accounting Policies and Estimates - The most critical accounting policy involves the Allowance for Credit Losses, which is estimated using the CECL model, requiring significant judgment based on historical experience, current conditions, and reasonable economic forecasts, particularly unemployment rates[366](index=366&type=chunk)[371](index=371&type=chunk) - The company uses a static pool Probability of Default (PD) / Loss Given Default (LGD) model to estimate its base allowance, segmenting its portfolio by product type, FICO score, and delinquency status[367](index=367&type=chunk)[368](index=368&type=chunk) - As of December 31, 2021, the allowance included **$14.4 million** in reserves related to the economic impact of the COVID-19 pandemic, down from **$30.4 million** at the end of 2020[373](index=373&type=chunk)[470](index=470&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=64&type=section&id=ITEM%207A%2E%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate risk, mitigated by interest rate cap contracts covering $550.0 million notional amount - The company's primary market risk is interest rate risk, as its finance receivables are fixed-rate, while borrowings under its senior revolving credit facility and three warehouse facilities are variable-rate[378](index=378&type=chunk)[379](index=379&type=chunk) - To mitigate interest rate risk, the company has purchased interest rate caps with an aggregate notional amount of **$550.0 million** as of December 31, 2021[379](index=379&type=chunk) - A hypothetical **100 basis point increase** in LIBOR and conduit rates would result in approximately **$2.0 million** of increased annual interest expense, which would be reduced by approximately **$2.6 million** due to the company's interest rate cap coverage[379](index=379&type=chunk) [Financial Statements and Supplementary Data](index=65&type=section&id=ITEM%208%2E%20Financial%20Statements%20and%20Supplementary%20Data) This section presents audited consolidated financial statements for 2021, including balance sheets, income statements, and cash flows Consolidated Financial Highlights (Year Ended Dec 31) | Metric (in thousands) | 2021 | 2020 | | :--- | :--- | :--- | | **Assets** | | | | Total Assets | $1,459,662 | $1,103,856 | | Net Finance Receivables | $1,219,120 | $951,714 | | **Liabilities & Equity** | | | | Total Liabilities | $1,176,926 | $831,733 | | Net Debt | $1,096,943 | $762,248 | | Total Stockholders' Equity | $282,736 | $272,123 | | **Income Statement** | | | | Total Revenue | $428,351 | $373,906 | | Net Income | $88,687 | $26,730 | | Diluted EPS | $8.33 | $2.40 | - The company adopted the CECL accounting standard for credit losses on January 1, 2020, which requires estimating lifetime expected credit losses and resulted in an initial increase to the allowance for credit losses of **$60.1 million**[428](index=428&type=chunk)[466](index=466&type=chunk) - Subsequent to year-end, in February 2022, the company completed a new **$250 million** asset-backed securitization (RMIT 2022-1) and redeemed its RMIT 2019-1 securitization[550](index=550&type=chunk)[551](index=551&type=chunk) [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=100&type=section&id=ITEM%209%2E%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) This item is not applicable to the company - Not applicable[553](index=553&type=chunk) [Controls and Procedures](index=100&type=section&id=ITEM%209A%2E%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2021 - Based on their evaluation as of December 31, 2021, the chief executive officer and chief financial officer concluded that the company's disclosure controls and procedures were effective[555](index=555&type=chunk) - Management assessed the effectiveness of internal control over financial reporting and concluded that it was effective as of December 31, 2021, with the independent registered public accounting firm, RSM US LLP, issuing an unqualified opinion on its effectiveness[386](index=386&type=chunk)[559](index=559&type=chunk) [Other Information](index=100&type=section&id=ITEM%209B%2E%20Other%20Information) This item is not applicable to the company - Not applicable[561](index=561&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=101&type=section&id=ITEM%209C%2E%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - Not applicable[563](index=563&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=102&type=section&id=ITEM%2010%2E%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2022 Proxy Statement - Information is incorporated by reference to the Proxy Statement for the registrant's 2022 Annual Meeting of Stockholders[566](index=566&type=chunk) [Executive Compensation](index=102&type=section&id=ITEM%2011%2E%20Executive%20Compensation) Executive compensation details are incorporated by reference from the company's 2022 Annual Meeting Proxy Statement - Information is incorporated by reference to the Proxy Statement for the registrant's 2022 Annual Meeting of Stockholders[568](index=568&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=102&type=section&id=ITEM%2012%2E%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Security ownership information for beneficial owners and management is incorporated by reference from the 2022 Proxy Statement - Information is incorporated by reference to the Proxy Statement for the registrant's 2022 Annual Meeting of Stockholders[569](index=569&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=102&type=section&id=ITEM%2013%2E%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information on related party transactions and director independence is incorporated by reference from the 2022 Proxy Statement - Information is incorporated by reference to the Proxy Statement for the registrant's 2022 Annual Meeting of Stockholders[570](index=570&type=chunk) [Principal Accounting Fees and Services](index=102&type=section&id=ITEM%2014%2E%20Principal%20Accounting%20Fees%20and%20Services) This section details fees paid to the independent registered public accounting firm, totaling $1.12 million in 2021 Accountant Fees (Fiscal Years 2021 & 2020) | Fee Type | 2021 | 2020 | | :--- | :--- | :--- | | Audit Fees | $1,105,936 | $894,826 | | Audit-Related Fees | $13,910 | $40,125 | | Tax Fees | $0 | $0 | | All Other Fees | $0 | $0 | | **Total** | **$1,119,846** | **$934,951** | Part IV [Exhibits, Financial Statement Schedules](index=104&type=section&id=ITEM%2015%2E%20Exhibits%2C%20Financial%20Statement%20Schedules) This item lists all financial statements and exhibits filed with the Form 10-K, with schedules omitted as information is included in consolidated financials - This item lists all financial statements and exhibits filed with the Form 10-K, with financial statement schedules omitted because the necessary information is included in the consolidated financial statements[580](index=580&type=chunk) [Form 10-K Summary](index=111&type=section&id=ITEM%2016%2E%20Form%2010-K%20Summary) The company has elected not to provide a summary of the Form 10-K - None[587](index=587&type=chunk)

Financial Data and Key Metrics Changes - The company generated $20.8 million of net income or $2.04 of diluted EPS, representing a 45% and 59% increase year-over-year respectively [7][34] - The return on assets (ROA) was 6% and return on equity (ROE) was 29.5% for the fourth quarter, with full year ROA at 7.2% and ROE at 31.6% [7][34] - Net finance receivables increased by 26% year-over-year, while quarterly revenue grew by 23% [8][34] Business Line Data and Key Metrics Changes - Branch originations increased by 7% year-over-year, totaling $287 million, while direct mail and digital originations rose by 55% to $148 million [35] - Total originations reached a record $434 million, up 19% from the prior year [35] - The core loan portfolio grew by $112 million sequentially and $296 million year-over-year, with large loans and small loans increasing by 10% and 6% respectively [36] Market Data and Key Metrics Changes - The company has taken market share, with its core loan portfolio growing at 26.5% compared to the broader market growth of 5% to 6% [78] - The 30-plus day delinquency rate was 6%, which is 70 basis points higher than the previous year but still 100 basis points below pre-pandemic levels [10][42] Company Strategy and Development Direction - The company plans to continue investing heavily in technology and digital capabilities, aiming to enhance customer experience and operational efficiency [14][24] - Geographic expansion is a priority, with plans to enter at least five new states and open approximately 25 new branches [26] - The company is shifting towards a lighter branch model while maintaining a strong digital presence to improve efficiency and productivity [84] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the economy and a positive macroeconomic outlook, despite challenges from the pandemic [12] - The company anticipates robust loan demand in 2022, supported by a strong portfolio and strategic investments made during the pandemic [23][30] - Management expects net credit loss rates to normalize but remain below pre-pandemic levels, projecting a full year loss rate of approximately 8.5% [41][102] Other Important Information - The company announced a 20% increase in its quarterly dividend to $0.30 per share and authorized a new $20 million stock repurchase program [22][54] - The allowance for credit losses increased to $159.3 million, representing 11.2% of net finance receivables, with a portion related to the expected economic impact of COVID-19 [44][45] Q&A Session Summary Question: Trends in subprime and near-prime consumer borrowing - Management noted a bifurcation in delinquencies, with higher increases in the greater than 36% APR portfolio compared to the sub-36% portfolio, indicating expected normalization trends [61][62] Question: Customer acquisition costs and credit performance across channels - Direct mail remains the most efficient channel for customer acquisition, while digital channels are slightly more expensive but still yield attractive risk-adjusted returns [64][66] Question: Market share growth and future potential - Management attributed market share gains to strategic growth initiatives and investments made during the pandemic, with expectations for continued expansion and innovation [78][79] Question: Guidance on G&A expenses for 2022 - Management indicated that while G&A expenses are expected to be around $55 million for Q1, heavy investments will continue throughout the year to support growth initiatives [80][81] Question: Sustainability of ROA and interest rate impacts - Management suggested that a normalized ROA could be around 4.5% to 5%, with interest rate caps in place to mitigate potential impacts from rising rates [90][92]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period ended Commission File Number: 001-35477 Regional Management Corp. (Exact name of registrant as specified in its charter) 979 Batesville Road, Suite B Greer, South Carolin ...

3Q 2021 Earnings Call Supplemental Presentation November 2, 2021 Legal Disclosures 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 ...

Financial Data and Key Metrics Changes - The company reported a net income of $22.2 million, translating to diluted EPS of $2.11, with a return on assets (ROA) of 7.1% and return on equity (ROE) of 31.6% [5][25] - Net finance receivables increased by 24% year-over-year, reaching record levels, while quarterly revenue grew by 23% [5][21] - The net credit loss (NCL) rate was 5%, marking a 280 basis point improvement from the previous year [8][30] Business Line Data and Key Metrics Changes - Branch originations totaled $268 million, an 18% increase year-over-year, while direct mail and digital originations rose to $152 million, up 80% from the prior year [26] - Total loan originations reached a record $421 million, a 35% increase from the previous year [26] - Digitally sourced loans accounted for 28% of new borrower volume, with large loans making up 57% of these originations [10][28] Market Data and Key Metrics Changes - The company expanded its geographic footprint by entering Utah and Illinois, with strong early performance in Illinois [13][50] - The allowance for credit losses increased to $150.1 million, representing 11.4% of net finance receivables, which is favorable compared to the 30-plus day delinquency of $61.3 million [19][34] Company Strategy and Development Direction - The company is focused on an omnichannel strategy, investing in digital initiatives, geographic expansion, and product development [6][12] - A significant portion of the portfolio (82%) is now comprised of higher-quality loans at or below 36% APR, which helps maintain a stable credit profile [6][18] - The company plans to optimize its branch network by closing 31 branches, which is expected to generate approximately $2.2 million in annual savings [14][35] Management's Comments on Operating Environment and Future Outlook - Management anticipates that NCL rates will remain below 7% for the full year 2021, with expectations for a return to pre-pandemic reserve levels by mid-2022 [20][34] - The company remains optimistic about strong portfolio growth and loan demand as the economy recovers [21][23] - Management noted that delinquencies are expected to normalize gradually, with a potential NCL rate of 8.5% for 2022 [20][32] Other Important Information - The company closed a $125 million private securitization transaction, increasing fixed-rate debt as a percentage of total debt from 78% to 87% [15][40] - The effective tax rate for the third quarter was 23%, with a dividend of $0.25 per common share declared for the fourth quarter [41][42] Q&A Session Summary Question: Growth in digital channels and loan sizes - Management noted that 57% of digital loans were large loans, indicating a healthy mix and strong performance in digital channels [48] Question: Impact of branch optimization on expenses - Management explained that branch optimization is expected to lead to savings while continuing to invest in digital initiatives [49] Question: Consumer health and delinquency rates - Management indicated that consumer balance sheets are strong post-stimulus, and delinquencies are expected to normalize over the next 12 months [54]

Start Time: 17:00 January 1, 0000 5:41 PM ET Regional Management Corp. (NYSE:RM) Q2 2021 Earnings Conference Call August 03, 2021, 17:00 PM ET Company Participants Rob Beck - President and CEO Harp Rana - EVP and CFO Garrett Edson - IR, ICR Conference Call Participants David Scharf - JMP Securities John Rowan - Janney Montgomery Scott Bill Dezellem - Tieton Capital Kyle Joseph - Jefferies Operator Thank you for standing by. This is the conference operator. Welcome to the Regional Management Corp. Second Qua ...