Regional Management Q4 Earnings Call Highlights

Core Insights - The company reported a strong finish to 2025, with fourth-quarter net income of $12.9 million, or $1.30 in diluted earnings per share, representing a 33% year-over-year increase [1][3] - The results exceeded guidance despite a larger provision for credit losses due to stronger-than-expected portfolio growth [1] - Management emphasized investments in technology, data analytics, and credit risk management to enhance digital origination and servicing [1] Financial Performance - Fourth-quarter revenue reached a record $170 million, up 10% year-over-year, with net receivables increasing by $87 million [5][4] - Full-year net income was $44.4 million, an 8% increase from 2024, with ending net receivables rising 13% to $2.1 billion [6][3] - Originations for the fourth quarter totaled a record $537 million, up 13% year-over-year, contributing to a full-year total of $2.0 billion, a 19% increase from 2024 [5][7] Credit Metrics - Credit metrics showed improvement, with the 30+ day delinquency rate at 7.5%, a 20 basis point improvement year-over-year [9] - The annualized net credit loss rate improved by 30 basis points year-over-year in Q4, and by 70 basis points for the full year [9][10] - The allowance for credit losses increased by $8.9 million in Q4 to support portfolio growth, maintaining an allowance rate of 10.3% [10] 2026 Outlook - For 2026, the company targets at least 10% growth in ending net receivables and 20-25% growth in net income [3][12] - Management expects net income to be significantly higher in the second half of 2026 compared to the first half, consistent with seasonal patterns [12] - The impact of higher tax refunds is anticipated to improve collections and delinquencies in Q1, although ending net receivables may contract sequentially [13] Capital Returns - The board declared a $0.30 per share dividend for the first quarter and repurchased approximately 197,000 shares in Q4 at an average price of $38.07 [15] - For the full year, about 702,000 shares were repurchased at an average price of $34.12 [15] Operational Efficiency - The annualized operating expense ratio was 12.4% in Q4, an improvement of 160 basis points year-over-year, while the full-year ratio was 13.1%, improving 70 basis points [8] - Management maintained discipline on expenses while continuing to invest in growth initiatives [8]