Regional Management(RM) - 2025 Q2 - Quarterly Results

Executive Summary Second Quarter 2025 Performance Overview Regional Management Corp. reported record Q2 2025 originations and revenue, with net income up 20% and improved credit performance - Regional Management Corp. delivered a very strong second quarter, marked by record originations and revenue, improving credit performance, and an all-time best operating expense ratio[3] Key Financial Highlights (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change ($) | Change (%) | | :-------------------------------- | :------ | :------ | :--------- | :--------- | | Net Income | $10.1 million | $8.4 million | $1.7 million | 20.1% | | Diluted EPS | $1.03 | $0.86 | $0.17 | 19.8% | | Net Finance Receivables | $2.0 billion | $1.8 billion | $186.6 million | 10.5% | | Total Originations | $510.3 million | $426.1 million | $84.2 million | 19.8% | | Total Revenue | $157.4 million | $143.0 million | $14.4 million | 10.1% | | 30+ Day Delinquency Rate | 6.6% | 6.9% | -0.3% | -4.3% | | Net Credit Loss Rate | 11.9% | 12.7% | -0.8% | -6.3% | | Operating Expense Ratio | 13.2% | 13.8% | -0.6% | -4.3% | - The company returned $17.6 million to shareholders year-to-date through buybacks and dividends, with book value per share increasing to $36.43[3] - The company continues strategic investments in its footprint and innovation, opening 17 new branches and expecting 5 to 10 more[3] Second Quarter 2025 Detailed Financial Highlights Financial Performance Q2 2025 saw significant financial growth, with net income and diluted EPS up over 20% and record revenue from portfolio expansion Net Income and EPS Net income for Q2 2025 increased to $10.1 million, up 20.1% YoY, with diluted EPS rising to $1.03 Net Income and Diluted EPS (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | YoY Change (%) | | :------------------ | :------ | :------ | :------------- | | Net Income | $10.1 million | $8.4 million | 20.1% | | Diluted EPS | $1.03 | $0.86 | 19.8% | Revenue Total revenue reached a record $157.4 million in Q2 2025, up 10.1% YoY, with yield improving to 32.9% Total Revenue and Yield (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | YoY Change ($ million) | YoY Change (%) | | :------------------ | :------ | :------ | :------------- | :------------- | | Total Revenue | $157.4 million | $143.0 million | $14.4 million | 10.1% | | Total Revenue Yield | 32.9% | 32.7% | - | +0.2% | | Interest and Fee Yield | - | - | - | +0.1% | Expenses and Operating Efficiency Operating expense ratio improved to an all-time best of 13.2% in Q2 2025, with revenue growth outpacing G&A by over 5x General and Administrative Expenses & Operating Expense Ratio (Q2 2025 vs. Prior Periods) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | QoQ Change ($ million) | YoY Change ($ million) | | :------------------------------------------------ | :------ | :------ | :------ | :--------------- | :--------------- | | General and Administrative Expenses | $62.9 million | $66.0 million | $60.1 million | -$3.1 million | +$2.8 million | | Operating Expense Ratio (annualized) | 13.2% | 14.0% | 13.8% | -80 bps | -60 bps | - Revenue growth outpaced G&A expense growth by more than 5x in the second quarter[6] Portfolio and Credit Quality Record net finance receivables and originations were achieved, with credit performance improving through lower net credit loss rates and delinquencies Net Finance Receivables and Originations Net finance receivables reached a record $2.0 billion, up 10.5% YoY, with total originations at a record $510.3 million Net Finance Receivables and Originations (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | YoY Change ($ million) | YoY Change (%) | | :-------------------------------- | :------ | :------ | :------------- | :------------- | | Net Finance Receivables | $2.0 billion | $1.8 billion | $186.6 million | 10.5% | | Total Originations | $510.3 million | $426.1 million | $84.2 million | 19.8% | | Large Loan NFR | $1.4 billion | $1.3 billion | $147.3 million | 11.6% | | Auto-secured NFR | $245.7 million | $179.5 million | $66.2 million | 36.9% | | Small Loan NFR | $547.0 million | $507.7 million | $39.3 million | 7.7% | | NFR with APRs > 36% | - | - | - | 16.3% | | Customer Accounts | - | - | - | 6.1% | - The barbell strategy balances growth in higher-quality, auto-secured products with higher-margin small loan portfolio growth[5] Credit Performance and Delinquencies Net credit loss rate improved by 80 basis points YoY to 11.9%, with 30+ day delinquencies decreasing to 6.6% Credit Performance Metrics (Q2 2025 vs. Prior Periods) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | QoQ Change (bps) | YoY Change (bps) | | :------------------------------------------------ | :------ | :------ | :------ | :--------------- | :--------------- | | Provision for Credit Losses ($ million) | $60.6 | $58.0 | $53.8 | +$2.6 | +$6.8 | | Net Credit Loss Rate (annualized) | 11.9% | 12.4% | 12.7% | -50 bps | -80 bps | | Allowance for Credit Losses (% of NFR) | 10.3% | 10.5% | 10.5% | -20 bps | -20 bps | | 30+ Day Contractual Delinquencies (% of NFR) | 6.6% | 7.1% | 6.9% | -50 bps | -30 bps | | Large Loan Delinquency Rate | 5.4% | 5.9% | 6.0% | -50 bps | -60 bps | | Small Loan Delinquency Rate | 9.6% | 10.0% | 9.1% | -40 bps | +50 bps | - The net credit loss rate included a 40 basis point impact from prior-year hurricane activity losses[6] - The decline in the allowance for credit losses rate was attributable to the release of remaining hurricane reserves[6] Shareholder Returns In Q2 2025, the company repurchased 164,692 shares at $30.36 per share under its $30 million repurchase program Share Repurchase Activity (Q2 2025) | Metric | Value | | :-------------------------- | :---------- | | Shares Repurchased | 164,692 | | Weighted-Average Price | $30.36 | | Program | $30 million stock repurchase program | Capital and Liquidity Third Quarter 2025 Dividend The Board declared a $0.30 per common share dividend for Q3 2025, payable September 10, 2025 Third Quarter 2025 Dividend Details | Metric | Value | | :------------------ | :------ | | Dividend Per Share | $0.30 | | Payment Date | September 10, 2025 | | Record Date | August 20, 2025 | Liquidity and Debt Structure As of June 30, 2025, the company held $2.0 billion in net finance receivables and $1.5 billion in debt, with 84% fixed-rate Liquidity and Debt Metrics (as of June 30, 2025) | Metric | Value | | :------------------------------------ | :---------- | | Net Finance Receivables | $2.0 billion | | Total Debt | $1.5 billion | | Unused Capacity on Revolving Facilities | $534 million (68.4%) | | Available Liquidity | $121.6 million | | Fixed-Rate Debt (% of total debt) | 84% | | Weighted-Average Coupon | 4.5% | | Funded Debt-to-Equity Ratio | 4.2 to 1.0 | | Stockholders' Equity Ratio | 18.5% | | Book Value Per Share | $36.43 | - Debt consisted of $165.5 million on a $355 million senior revolving credit facility, $82.4 million on $425 million warehouse facilities, and $1.3 billion through securitizations[12] Company Information About Regional Management Corp. Regional Management Corp. is a diversified consumer finance company operating as 'Regional Finance' in 19 states, providing secured installment loans - Regional Management Corp. (NYSE: RM) is a diversified consumer finance company providing installment loan products to customers with limited traditional credit access[14] - The company operates as 'Regional Finance' online and in branch locations across 19 states[14] - Most loan products are secured, fixed-rate, fixed-term, and fully amortizing, sourced via branches, direct mail, digital partners, and its website[14] Forward-Looking Statements and Risk Factors This section disclaims forward-looking statements, noting actual results may differ due to risks like growth, credit, economic, and regulatory changes - Forward-looking statements are subject to inherent risks and uncertainties, many outside the company's control[15] - Factors causing actual results to differ include managing growth, underwriting, loan collection, credit risk, competition, and economic conditions[16][17] - Additional risks include third-party failures, security breaches, IT reliance, revenue/expense trends, public health crises, interest rates, liquidity, and regulatory changes[16][17] Contact Information Investor relations contact details are provided for inquiries - For investor relations inquiries, contact Garrett Edson at (203) 682-8331 or investor.relations@regionalmanagement.com[19] Consolidated Financial Statements Consolidated Statements of Income Consolidated statements show strong YoY growth in total revenue and net income for Q2 and YTD, despite increased credit loss provision Consolidated Statements of Income (Q2 2025 & YTD 2025 vs. Prior Year) | Metric (dollars in thousands) | 2Q 25 | 2Q 24 | 2Q $ Change | 2Q % Change | YTD 25 | YTD 24 | YTD $ Change | YTD % Change | | :---------------------------- | :---- | :---- | :---------- | :---------- | :----- | :----- | :----------- | :----------- | | Revenue | | | | | | | | | | Interest and fee income | $140,695 | $127,898 | $12,797 | 10.0% | $277,248 | $256,716 | $20,532 | 8.0% | | Insurance income, net | 11,499 | 10,507 | 992 | 9.4% | 22,796 | 21,481 | 1,315 | 6.1% | | Other income | 5,248 | 4,620 | 628 | 13.6% | 10,365 | 9,136 | 1,229 | 13.5% | | Total revenue | 157,442 | 143,025 | 14,417 | 10.1% | 310,409 | 287,333 | 23,076 | 8.0% | | Expenses | | | | | | | | | | Provision for credit losses | 60,587 | 53,802 | (6,785) | (12.6)% | 118,579 | 100,225 | (18,354) | (18.3)% | | Total general and administrative | 62,945 | 60,136 | (2,809) | (4.7)% | 128,988 | 120,584 | (8,404) | (7.0)% | | Interest expense | 20,426 | 17,865 | (2,561) | (14.3)% | 40,197 | 35,369 | (4,828) | (13.7)% | | Income before income taxes | 13,484 | 11,222 | 2,262 | 20.2% | 22,645 | 31,155 | (8,510) | (27.3)% | | Income taxes | 3,344 | 2,777 | (567) | (20.4)% | 5,498 | 7,505 | 2,007 | 26.7% | | Net income | $10,140 | $8,445 | $1,695 | 20.1% | $17,147 | $23,650 | $(6,503) | (27.5)% | | Net income per common share: | | | | | | | | | | Basic | $1.07 | $0.88 | $0.19 | 21.6% | $1.79 | $2.47 | $(0.68) | (27.5)% | | Diluted | $1.03 | $0.86 | $0.17 | 19.8% | $1.73 | $2.41 | $(0.68) | (28.2)% | | Return on average assets (annualized) | 2.1% | 1.9% | | | 1.8% | 2.7% | | | | Return on average equity (annualized) | 11.3% | 10.0% | | | 9.6% | 14.1% | | | Consolidated Balance Sheets The balance sheet as of June 30, 2025, shows a 10.0% YoY increase in total assets, driven by net finance receivables growth Consolidated Balance Sheets (as of June 30, 2025 vs. June 30, 2024) | Metric (dollars in thousands) | 2Q 25 | 2Q 24 | $ Change | % Change | | :---------------------------------------------------- | :------ | :------ | :------- | :------- | | Assets | | | | | | Cash | $4,272 | $4,323 | $(51) | (1.2)% | | Net finance receivables | 1,960,364 | 1,773,743 | 186,621 | 10.5% | | Allowance for credit losses | (202,800) | (185,400) | (17,400) | (9.4)% | | Restricted cash | 117,658 | 138,891 | (21,233) | (15.3)% | | Restricted available-for-sale investments | 22,122 | 2,157 | 19,965 | 925.6% | | Total assets | $1,967,131 | $1,789,052 | $178,079 | 10.0% | | Liabilities and Stockholders' Equity | | | | | | Debt | $1,509,133 | $1,378,449 | $130,684 | 9.5% | | Other liabilities | 57,141 | 34,030 | 23,111 | 67.9% | | Total liabilities | 1,604,180 | 1,444,149 | 160,031 | 11.1% | | Total stockholders' equity | 362,951 | 344,903 | 18,048 | 5.2% | | Total liabilities and stockholders' equity | $1,967,131 | $1,789,052 | $178,079 | 10.0% | Selected Financial Data & Trends Net Finance Receivables and Originations Data Net finance receivables grew 10.5% YoY to $1.96 billion, with total originations up 19.8%, driven by large loans Net Finance Receivables (Q2 2025 vs. Prior Periods) | Metric (dollars in thousands) | 2Q 25 | 1Q 25 | QoQ $ Inc (Dec) | QoQ % Inc (Dec) | 2Q 24 | YoY $ Inc (Dec) | YoY % Inc (Dec) | | :---------------------------- | :---- | :---- | :-------------- | :-------------- | :---- | :-------------- | :-------------- | | Large loans | $1,413,367 | $1,345,825 | $67,542 | 5.0% | $1,266,032 | $147,335 | 11.6% | | Small loans | 546,997 | 544,526 | 2,471 | 0.5% | 507,711 | 39,286 | 7.7% | | Total | $1,960,364 | $1,890,351 | $70,013 | 3.7% | $1,773,743 | $186,621 | 10.5% | | Number of branches | 352 | 353 | (1) | (0.3)% | 343 | 9 | 2.6% | | Net finance receivables per branch | $5,569 | $5,355 | $214 | 4.0% | $5,171 | $398 | 7.7% | Loans Originated (Q2 2025 vs. Prior Periods) | Metric (dollars in thousands) | 2Q 25 | 1Q 25 | QoQ $ Inc (Dec) | QoQ % Inc (Dec) | 2Q 24 | YoY $ Inc (Dec) | YoY % Inc (Dec) | | :---------------------------- | :---- | :---- | :-------------- | :-------------- | :---- | :-------------- | :-------------- | | Large loans | $336,473 | $241,809 | $94,664 | 39.1% | $254,779 | $81,694 | 32.1% | | Small loans | 173,856 | 150,311 | 23,545 | 15.7% | 171,282 | 2,574 | 1.5% | | Total | $510,329 | $392,120 | $118,209 | 30.1% | $426,061 | $84,268 | 19.8% | Revenue Yields Analysis Total revenue yield improved to 32.9% in Q2 2025, up 0.2% YoY, driven by large loan yield increases Revenue Yields (Annualized as % of Average Net Finance Receivables) | Metric | 2Q 25 | 1Q 25 | QoQ Inc (Dec) | 2Q 24 | YoY Inc (Dec) | | :------------------------ | :---- | :---- | :------------ | :---- | :------------ | | Large loans | 26.6% | 26.1% | 0.5% | 26.1% | 0.5% | | Small loans | 36.5% | 35.9% | 0.6% | 37.2% | (0.7)% | | Total interest and fee yield | 29.4% | 28.9% | 0.5% | 29.3% | 0.1% | | Total revenue yield | 32.9% | 32.4% | 0.5% | 32.7% | 0.2% | Components of Increase in Interest and Fee Income (Q2 2025 vs. Q2 2024) | Component (dollars in thousands) | Volume | Rate | Volume & Rate | Total | | :------------------------------- | :----- | :--- | :------------ | :---- | | Large loans | $7,644 | $1,654 | $154 | $9,452 | | Small loans | 4,380 | (945) | (90) | 3,345 | | Product mix | (22) | 17 | 5 | — | | Total | $12,002 | $726 | $69 | $12,797 | Revenue Yields (YTD 2025 vs. YTD 2024) | Metric | YTD 25 | YTD 24 | YoY Inc (Dec) | | :------------------------ | :----- | :----- | :------------ | | Large loans | 26.4% | 26.1% | 0.3% | | Small loans | 36.2% | 37.5% | (1.3)% | | Total interest and fee yield | 29.2% | 29.3% | (0.1)% | | Total revenue yield | 32.7% | 32.8% | (0.1)% | Credit Quality Metrics Net credit loss rate improved to 11.9% in Q2 2025, down 80 basis points YoY, with total delinquency decreasing to 6.6% Credit Loss and Delinquency Metrics (Q2 2025 vs. Prior Periods) | Metric | 2Q 25 | 1Q 25 | 2Q 24 | | :------------------------------------------------ | :---- | :---- | :---- | | Net credit losses ($ thousands) | $56,887 | $58,392 | $55,502 | | Percentage of average net finance receivables (annualized) | 11.9% | 12.4% | 12.7% | | Provision for credit losses ($ thousands) | $60,587 | $57,992 | $53,802 | | Percentage of average net finance receivables (annualized) | 12.7% | 12.3% | 12.3% | | Allowance for credit losses ($ thousands) | $202,800 | $199,100 | $185,400 | | Allowance for credit losses (% of NFR) | 10.3% | 10.5% | 10.5% | | Total delinquency (% of NFR) | 6.6% | 7.1% | 6.9% | | Large loans delinquency (% of NFR) | 5.4% | 5.9% | 6.0% | | Small loans delinquency (% of NFR) | 9.6% | 10.0% | 9.1% | Other Key Metrics (YTD 2025 vs. YTD 2024) | Metric | YTD 25 | YTD 24 | | :------------------------------------------------ | :----- | :----- | | Net credit losses ($ thousands) | $115,279 | $102,225 | | Percentage of average net finance receivables (annualized) | 12.1% | 11.7% | | Provision for credit losses ($ thousands) | $118,579 | $100,225 | | Percentage of average net finance receivables (annualized) | 12.5% | 11.4% | | Percentage of total revenue (Provision for credit losses) | 38.2% | 34.9% | General and Administrative Expenses Operating expense ratio improved to 13.2% in Q2 2025, down 0.6% YoY, with efficiency ratio improving to 40.0% General and Administrative Expenses & Ratios (Q2 2025 vs. Prior Periods) | Metric | 2Q 25 | 1Q 25 | 2Q 24 | | :------------------------------------------------ | :---- | :---- | :---- | | General and administrative expenses ($ thousands) | $62,945 | $66,043 | $60,136 | | Percentage of average net finance receivables (annualized) | 13.2% | 14.0% | 13.8% | | Percentage of total revenue | 40.0% | 43.2% | 42.0% | General and Administrative Expenses & Ratios (YTD 2025 vs. YTD 2024) | Metric | YTD 25 | YTD 24 | | :------------------------------------------------ | :----- | :----- | | General and administrative expenses ($ thousands) | $128,988 | $120,584 | | Percentage of average net finance receivables (annualized) | 13.6% | 13.8% | | Percentage of total revenue | 41.6% | 42.0% | Quarterly Financial Trends Quarterly trends show consistent total revenue growth to $157.4 million in Q2 2025, with improving operating expense and delinquency rates Income Statement Quarterly Trend (Q2 2024 - Q2 2025) | Metric (dollars in thousands) | 2Q 24 | 3Q 24 | 4Q 24 | 1Q 25 | 2Q 25 | QoQ $ B(W) | YoY $ B(W) | | :---------------------------- | :---- | :---- | :---- | :---- | :---- | :--------- | :--------- | | Total revenue | 143,025 | 146,338 | 154,832 | 152,967 | 157,442 | 4,475 | 14,417 | | Provision for credit losses | 53,802 | 54,349 | 57,626 | 57,992 | 60,587 | (2,595) | (6,785) | | Total general and administrative | 60,136 | 62,468 | 64,646 | 66,043 | 62,945 | 3,098 | (2,809) | | Interest expense | 17,865 | 19,356 | 19,805 | 19,771 | 20,426 | (655) | (2,561) | | Net income | $8,445 | $7,663 | $9,914 | $7,007 | $10,140 | $3,133 | $1,695 | | Diluted EPS | $0.86 | $0.76 | $0.98 | $0.70 | $1.03 | $0.33 | $0.17 | Balance Sheet & Other Key Metrics Quarterly Trends (Q2 2024 - Q2 2025) | Metric | 2Q 24 | 3Q 24 | 4Q 24 | 1Q 25 | 2Q 25 | QoQ $ Inc (Dec) | YoY $ Inc (Dec) | | :-------------------------------- | :---- | :---- | :---- | :---- | :---- | :-------------- | :-------------- | | Total assets ($ thousands) | $1,789,052 | $1,821,831 | $1,909,109 | $1,900,683 | $1,967,131 | $66,448 | $178,079 | | Net finance receivables ($ thousands) | $1,773,743 | $1,819,756 | $1,892,535 | $1,890,351 | $1,960,364 | $70,013 | $186,621 | | Allowance for credit losses ($ thousands) | $185,400 | $192,100 | $199,500 | $199,100 | $202,800 | $3,700 | $17,400 | | Debt ($ thousands) | $1,378,449 | $1,395,892 | $1,478,336 | $1,477,860 | $1,509,133 | $31,273 | $130,684 | | Interest and fee yield (annualized) | 29.3% | 29.9% | 29.8% | 28.9% | 29.4% | 0.5% | 0.1% | | Efficiency ratio | 42.0% | 42.7% | 41.8% | 43.2% | 40.0% | (3.2)% | (2.0)% | | Operating expense ratio | 13.8% | 13.9% | 14.0% | 14.0% | 13.2% | (0.8)% | (0.6)% | | Delinquency rate | 6.9% | 6.9% | 7.7% | 7.1% | 6.6% | (0.5)% | (0.3)% | | Net credit loss rate | 12.7% | 10.6% | 10.8% | 12.4% | 11.9% | (0.5)% | (0.8)% | | Book value per share | $33.96 | $34.72 | $35.67 | $35.48 | $36.43 | $0.95 | $2.47 | Year-to-Date Financial Data YTD 2025 data shows average net finance receivables up 8.4% YoY, total originations up 19.9%, and net credit loss rate at 12.1% Average Net Finance Receivables (YTD 2025 vs. YTD 2024) | Metric (dollars in thousands) | YTD 25 | YTD 24 | YoY $ Inc (Dec) | YoY % Inc (Dec) | | :---------------------------- | :----- | :----- | :-------------- | :-------------- | | Large loans | $1,356,543 | $1,259,611 | $96,932 | 7.7% | | Small loans | 544,520 | 494,149 | 50,371 | 10.2% | | Total | $1,901,063 | $1,753,760 | $147,303 | 8.4% | Loans Originated (YTD 2025 vs. YTD 2024) | Metric (dollars in thousands) | YTD 25 | YTD 24 | YTD $ Inc (Dec) | YTD % Inc (Dec) | | :---------------------------- | :----- | :----- | :-------------- | :-------------- | | Large loans | $578,282 | $439,853 | $138,429 | 31.5% | | Small loans | 324,167 | 312,563 | 11,604 | 3.7% | | Total | $902,449 | $752,416 | $150,033 | 19.9% | Other Key Metrics (YTD 2025 vs. YTD 2024) | Metric | YTD 25 | YTD 24 | | :------------------------------------------------ | :----- | :----- | | Net credit losses ($ thousands) | $115,279 | $102,225 | | Percentage of average net finance receivables (annualized) | 12.1% | 11.7% | | Provision for credit losses ($ thousands) | $118,579 | $100,225 | | Percentage of average net finance receivables (annualized) | 12.5% | 11.4% | | Percentage of total revenue (Provision for credit losses) | 38.2% | 34.9% | | General and administrative expenses ($ thousands) | $128,988 | $120,584 | | Percentage of average net finance receivables (annualized) | 13.6% | 13.8% | | Percentage of total revenue (G&A) | 41.6% | 42.0% | Non-GAAP Financial Measures Reconciliation of Non-GAAP Measures Non-GAAP measures, including tangible equity and funded debt-to-tangible equity ratio, provide additional insights into capital and leverage - Non-GAAP measures like tangible equity and funded debt-to-tangible equity ratio provide additional metrics for evaluating capital and leverage[36] Non-GAAP Reconciliation (Q2 2025) | Metric | 2Q 25 (dollars in thousands) | | :------------------------------------ | :--------------------------- | | Debt | $1,509,133 | | Total stockholders' equity | 362,951 | | Less: Intangible assets | 28,810 | | Tangible equity (non-GAAP) | $334,141 | | Funded debt-to-equity ratio | 4.2x | | Funded debt-to-tangible equity ratio (non-GAAP) | 4.5x |