Regional Management's Q4 Earnings Beat Estimates, Stock Dips 2%

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].