Regional Management (RM) Declines 2.5% Despite Q2 Earnings Beat

Core Viewpoint - Regional Management Corp. (RM) reported strong second-quarter 2024 earnings, but shares declined by 2.5% post-results due to higher expenses and lower insurance income [1] Financial Performance - Adjusted earnings per share (EPS) for Q2 2024 were 86 cents, exceeding the Zacks Consensus Estimate by 45.8% and reflecting a 36.5% year-over-year increase [2] - Total revenues increased by 7.1% year over year to $143 million, slightly missing the consensus mark by 0.1% [2] - Interest and fee income rose 8.3% year over year to $127.9 million, beating the consensus estimate by 0.5% [3] - Net insurance income fell 6.2% to $10.5 million, missing the consensus by 8.6% [3] - General and administrative expenses increased by 5.7% to $60.1 million, driven by higher personnel and marketing costs [4] - Net income for Q2 2024 was $8.4 million, up from $6 million a year ago [5] Operational Update - Net finance receivables reached $1.8 billion, a 5% increase from the previous year [6] - Small loans increased by 13.7% to $505.6 million, while large loans rose by 2.3% to $1.3 billion [6] - Total loan originations for the quarter were $426.1 million, a 6.8% year-over-year increase [7] Financial Position - As of June 30, 2024, total assets were $1.79 billion, nearly unchanged from the end of 2023 [8] - Net debt decreased from $1.399 billion at the end of 2023 to $1.378 billion [8] - Total shareholders' equity rose from $322.3 million at the end of 2023 to $344.9 million [8] Dividend Update - A dividend of 30 cents per share was announced for Q3 2024, payable on September 12 to shareholders of record as of August 21 [9] Future Outlook - The company anticipates improved credit losses in the second half of 2024 and plans to open 10 new branch locations by year-end [10] - Expected growth in net finance receivables is around 6% for 2024, with a projected increase of $48 million in Q3 [10] - General and administrative expenses for 2024 are expected to be approximately $250 million, up from $243.1 million in 2023 [10] - The effective tax rate is anticipated to be between 24-25% for the full year [11] - Full-year net income is projected to be in the range of $41-$44 million [11]