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Regional Management Corp. Announces Second Quarter 2024 Results

- Net income of $8.4 million and diluted earnings per share of $0.86, up 37% from $0.63 in the prior-year period -

- Year-over-year growth in customer accounts, originations, and revenue of 7%; revenue growth driven by 5% ending net receivables growth and 80 bps increase in total revenue yield -

- 30+ day contractual delinquency rate of 6.9% as of June 30, 2024 -

- Continued expense discipline with operating expense ratio of 13.8% -

Regional Management Corp. (NYSE: RM), a diversified consumer finance company, today announced results for the second quarter ended June 30, 2024.

“We are very pleased with our quarterly and year-to-date results,” said Robert W. Beck, President and Chief Executive Officer of Regional Management Corp. “We delivered $8.4 million of net income in the second quarter, or $0.86 of diluted EPS. We grew our portfolio by $29 million sequentially to $1.8 billion in the quarter, up 5.0% from the prior year. Our interest and fee yield increased 110 basis points year-over-year from a combination of increased pricing, growth of our higher-margin small loan portfolio, and improved credit performance. Our larger portfolio and stronger yield combined to drive total revenue to $143 million in the second quarter, up 7% from last year. At the same time, we have maintained a tight grip on G&A expense while still investing in our growth and strategic initiatives. Together, these strong line item outcomes drove net income up 40% compared to the second quarter of last year.”

“Along with our strong first half results, we continue to carefully manage our portfolio’s credit quality and performance,” added Mr. Beck. “Our 30+ day delinquency rate remained stable at 6.9% at the end of the quarter, 20 basis points better sequentially. Our net credit loss rate improved 40 basis points from the prior year, as the front book continues to perform in line with our expectations and makes up a larger portion of our total portfolio. We grew our small loan portfolio by $61 million, or 14%, year-over-year, representing more than 70% of our total portfolio growth over the past year. Our portfolio of loans with greater than 36% APR grew from 14% to 17% of the total portfolio over that same time period. While these portfolios naturally come with higher delinquencies and credit losses, it is an excellent trade given the stronger margins and bottom-line returns that the portfolios generate.”

“We had a very successful first half of 2024, posting strong top- and bottom-line results despite the continued impacts of inflation on credit performance,” continued Mr. Beck. “We remain well-positioned to operate effectively through the current economic cycle. As we expect credit losses to improve in the second half of the year, we are excited to begin increasing our investment in our strategic initiatives and portfolio growth, including through the opening of ten new branch locations before year-end and continued expansion of our higher-margin and auto-secured loan portfolios. We look forward to continuing to deliver strong returns to our shareholders while also investing in the business in a way that will enable us to achieve additional, sustainable growth, improved credit performance, and greater productivity, operating efficiency, and leverage over the long-term.”

Second Quarter 2024 Highlights

  • Net income for the second quarter of 2024 was $8.4 million and diluted earnings per share was $0.86, up 37% from $0.63 in the prior-year period.
  • Net finance receivables as of June 30, 2024 were $1.8 billion, an increase of $84.8 million, or 5.0%, from the prior-year period.
    • Large loan net finance receivables of $1.3 billion increased $28.0 million, or 2.3%, from the prior-year period and represented 71.4% of the total loan portfolio, compared to 73.3% in the prior-year period.
    • Small loan net finance receivables of $505.6 million increased $61.1 million, or 13.7%, from the prior-year period and represented 28.5% of the total loan portfolio, compared to 26.3% in the prior-year period.
    • Net finance receivables with annual percentage rates (APRs) above 36% increased to 17.2% of the portfolio from 13.9% in the prior-year period.
    • Total loan originations were $426.1 million in the second quarter of 2024, an increase of $27.1 million, or 6.8%, from the prior-year period, due to controlled growth from credit-tightening actions.
  • Total revenue for the second quarter of 2024 was $143.0 million, an increase of $9.5 million, or 7.1%, from the prior-year period, primarily due to an increase in interest and fee income of $9.8 million related to higher average net finance receivables and 110 basis points of higher interest and fee yield compared to the prior-year period.
    • The increase in interest and fee yield is attributable to increased pricing, growth of the higher-margin small loan portfolio, and improved credit performance.
    • Total revenue yield increased 80 basis points year-over-year, 30 basis points lower than the increase in interest and fee yield due to lower insurance revenues.
  • Provision for credit losses for the second quarter of 2024 was $53.8 million, an increase of $1.3 million, or 2.4%, from the prior-year period, due to higher net credit losses from higher average net receivables ($0.6 million) and a lower provision release compared to the prior-year period ($0.7 million).
    • Annualized net credit losses as a percentage of average net finance receivables for the second quarter of 2024 were 12.7%, a 40 basis point improvement compared to 13.1% in the prior-year period. The second quarter 2024 net credit loss rate is inclusive of a 20 basis point impact from growth of the higher-rate, small loan portfolio.
    • The provision for credit losses for the second quarter of 2024 included a reserve reduction of $1.7 million primarily due to changes in estimated future macroeconomic impacts on credit losses, partially offset by portfolio growth during the quarter.
    • Allowance for credit losses was $185.4 million as of June 30, 2024, or 10.5% of net finance receivables, a 20 basis point decrease sequentially from 10.7% due to improved portfolio credit quality and expectations for improving future macroeconomic conditions.
  • As of June 30, 2024, 30+ day contractual delinquencies totaled $122.7 million, or 6.9% of net finance receivables, a 20 basis point improvement sequentially and comparable to June 30, 2023. The second quarter 2024 delinquency rate is inclusive of a 10 basis point impact from growth of the higher-rate, small loan portfolio.
  • General and administrative expenses for the second quarter of 2024 were $60.1 million, an increase of $3.2 million from the prior-year period. The operating expense ratio (annualized general and administrative expenses as a percentage of average net finance receivables) for the second quarter of 2024 was 13.8%. The prior-year period included an insurance settlement benefit, improving general and administrative expenses and the operating expense ratio in the prior-year period by $1.0 million and 20 basis points, respectively.

Third Quarter 2024 Dividend

The company’s Board of Directors has declared a dividend of $0.30 per common share for the third quarter of 2024. The dividend will be paid on September 12, 2024 to shareholders of record as of the close of business on August 21, 2024. The declaration and payment of any future dividend is subject to the discretion of the Board of Directors and will depend on a variety of factors, including the company’s financial condition and results of operations.

Liquidity and Capital Resources

As of June 30, 2024, the company had net finance receivables of $1.8 billion and debt of $1.4 billion. The debt consisted of:

  • $145.7 million on the company’s $355 million senior revolving credit facility,
  • $21.4 million on the company’s aggregate $375 million revolving warehouse credit facilities, and
  • $1.2 billion through the company’s asset-backed securitizations.

As of June 30, 2024, the company’s unused capacity to fund future growth on its revolving credit facilities (subject to the borrowing base) was $564 million, or 77.3%, and the company had available liquidity of $149.4 million, including unrestricted cash on hand and immediate availability to draw down cash from its revolving credit facilities. As of June 30, 2024, the company’s fixed-rate debt as a percentage of total debt was 88%, with a weighted-average coupon of 4.2% and a weighted-average revolving duration of 1.2 years.

The company had a funded debt-to-equity ratio of 4.0 to 1.0 and a stockholders’ equity ratio of 19.3%, each as of June 30, 2024. On a non-GAAP basis, the company had a funded debt-to-tangible equity ratio of 4.2 to 1.0, as of June 30, 2024. Please refer to the reconciliations of non-GAAP measures to comparable GAAP measures included at the end of this press release.

Conference Call Information

Regional Management Corp. will host a conference call and webcast today at 5:00 PM ET to discuss these results.

The dial-in number for the conference call is (855) 327-6837 (toll-free) or (631) 891-4304 (direct). Please dial the number 10 minutes prior to the scheduled start time.

*** A supplemental slide presentation will be made available on Regional’s website prior to the earnings call at www.RegionalManagement.com. ***

In addition, a live webcast of the conference call will be available on Regional’s website at www.RegionalManagement.com.

A webcast replay of the call will be available at www.RegionalManagement.com for one year following the call.

About Regional Management Corp.

Regional Management Corp. (NYSE: RM) is a diversified consumer finance company that provides attractive, easy-to-understand installment loan products primarily to customers with limited access to consumer credit from banks, thrifts, credit card companies, and other lenders. Regional Management operates under the name “Regional Finance” online and in branch locations in 19 states across the United States. Most of its loan products are secured, and each is structured on a fixed-rate, fixed-term basis with fully amortizing equal monthly installment payments, repayable at any time without penalty. Regional Management sources loans through its multiple channel platform, which includes branches, centrally managed direct mail campaigns, digital partners, and its consumer website. For more information, please visit www.RegionalManagement.com.

Forward-Looking Statements

This press release may contain various “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical fact but instead represent Regional Management Corp.’s expectations or beliefs concerning future events. Forward-looking statements include, without limitation, statements concerning financial outlooks or future plans, objectives, goals, projections, strategies, events, or performance, and underlying assumptions and other statements related thereto. Words such as “may,” “will,” “should,” “likely,” “anticipates,” “expects,” “intends,” “plans,” “projects,” “believes,” “estimates,” “outlook,” and similar expressions may be used to identify these forward-looking statements. Such forward-looking statements speak only as of the date on which they were made and are about matters that are inherently subject to risks and uncertainties, many of which are outside of the control of Regional Management. As a result, actual performance and results may differ materially from those contemplated by these forward-looking statements. Therefore, investors should not place undue reliance on forward-looking statements.

Factors that could cause actual results or performance to differ from the expectations expressed or implied in forward-looking statements include, but are not limited to, the following: managing growth effectively, implementing Regional Management’s growth strategy, and opening new branches as planned; Regional Management’s convenience check strategy; Regional Management’s policies and procedures for underwriting, processing, and servicing loans; Regional Management’s ability to collect on its loan portfolio; Regional Management’s insurance operations; exposure to credit risk and repayment risk, which risks may increase in light of adverse or recessionary economic conditions; the implementation of evolving underwriting models and processes, including as to the effectiveness of Regional Management's custom scorecards; changes in the competitive environment in which Regional Management operates or a decrease in the demand for its products; the geographic concentration of Regional Management’s loan portfolio; the failure of third-party service providers, including those providing information technology products; changes in economic conditions in the markets Regional Management serves, including levels of unemployment and bankruptcies; the ability to achieve successful acquisitions and strategic alliances; the ability to make technological improvements as quickly as competitors; security breaches, cyber-attacks, failures in information systems, or fraudulent activity; the ability to originate loans; reliance on information technology resources and providers, including the risk of prolonged system outages; changes in current revenue and expense trends, including trends affecting delinquencies and credit losses; any future public health crises, including the impact of such crisis on our operations and financial condition; changes in operating and administrative expenses; the departure, transition, or replacement of key personnel; the ability to timely and effectively implement, transition to, and maintain the necessary information technology systems, infrastructure, processes, and controls to support Regional Management’s operations and initiatives; changes in interest rates; existing sources of liquidity may become insufficient or access to these sources may become unexpectedly restricted; exposure to financial risk due to asset-backed securitization transactions; risks related to regulation and legal proceedings, including changes in laws or regulations or in the interpretation or enforcement of laws or regulations; changes in accounting standards, rules, and interpretations and the failure of related assumptions and estimates; the impact of changes in tax laws and guidance, including the timing and amount of revenues that may be recognized; risks related to the ownership of Regional Management’s common stock, including volatility in the market price of shares of Regional Management’s common stock; the timing and amount of future cash dividend payments; and anti-takeover provisions in Regional Management’s charter documents and applicable state law.

The foregoing factors and others are discussed in greater detail in Regional Management’s filings with the Securities and Exchange Commission. Regional Management will not update or revise forward-looking statements to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events or the non-occurrence of anticipated events, whether as a result of new information, future developments, or otherwise, except as required by law. Regional Management is not responsible for changes made to this document by wire services or Internet services.

Regional Management Corp. and Subsidiaries

Consolidated Statements of Income

(Unaudited)

(dollars in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

Better (Worse)

 

 

 

 

 

 

 

 

Better (Worse)

 

 

 

2Q 24

 

 

2Q 23

 

 

$

 

 

%

 

 

YTD 24

 

 

YTD 23

 

 

$

 

 

%

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fee income

 

$

127,898

 

 

$

118,083

 

 

$

9,815

 

 

 

8.3

%

 

$

256,716

 

 

$

238,490

 

 

$

18,226

 

 

 

7.6

%

Insurance income, net

 

 

10,507

 

 

 

11,203

 

 

 

(696

)

 

 

(6.2

)%

 

 

21,481

 

 

 

22,162

 

 

 

(681

)

 

 

(3.1

)%

Other income

 

 

4,620

 

 

 

4,198

 

 

 

422

 

 

 

10.1

%

 

 

9,136

 

 

 

8,210

 

 

 

926

 

 

 

11.3

%

Total revenue

 

 

143,025

 

 

 

133,484

 

 

 

9,541

 

 

 

7.1

%

 

 

287,333

 

 

 

268,862

 

 

 

18,471

 

 

 

6.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for credit losses

 

 

53,802

 

 

 

52,551

 

 

 

(1,251

)

 

 

(2.4

)%

 

 

100,225

 

 

 

100,219

 

 

 

(6

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Personnel

 

 

37,097

 

 

 

36,419

 

 

 

(678

)

 

 

(1.9

)%

 

 

74,917

 

 

 

75,016

 

 

 

99

 

 

 

0.1

%

Occupancy

 

 

6,149

 

 

 

6,158

 

 

 

9

 

 

 

0.1

%

 

 

12,524

 

 

 

12,446

 

 

 

(78

)

 

 

(0.6

)%

Marketing

 

 

4,836

 

 

 

3,844

 

 

 

(992

)

 

 

(25.8

)%

 

 

9,151

 

 

 

7,223

 

 

 

(1,928

)

 

 

(26.7

)%

Other

 

 

12,054

 

 

 

10,475

 

 

 

(1,579

)

 

 

(15.1

)%

 

 

23,992

 

 

 

21,534

 

 

 

(2,458

)

 

 

(11.4

)%

Total general and administrative

 

 

60,136

 

 

 

56,896

 

 

 

(3,240

)

 

 

(5.7

)%

 

 

120,584

 

 

 

116,219

 

 

 

(4,365

)

 

 

(3.8

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

17,865

 

 

 

16,224

 

 

 

(1,641

)

 

 

(10.1

)%

 

 

35,369

 

 

 

33,006

 

 

 

(2,363

)

 

 

(7.2

)%

Income before income taxes

 

 

11,222

 

 

 

7,813

 

 

 

3,409

 

 

 

43.6

%

 

 

31,155

 

 

 

19,418

 

 

 

11,737

 

 

 

60.4

%

Income taxes

 

 

2,777

 

 

 

1,790

 

 

 

(987

)

 

 

(55.1

)%

 

 

7,505

 

 

 

4,706

 

 

 

(2,799

)

 

 

(59.5

)%

Net income

 

$

8,445

 

 

$

6,023

 

 

$

2,422

 

 

 

40.2

%

 

$

23,650

 

 

$

14,712

 

 

$

8,938

 

 

 

60.8

%

Net income per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.88

 

 

$

0.64

 

 

$

0.24

 

 

 

37.5

%

 

$

2.47

 

 

$

1.57

 

 

$

0.90

 

 

 

57.3

%

Diluted

 

$

0.86

 

 

$

0.63

 

 

$

0.23

 

 

 

36.5

%

 

$

2.41

 

 

$

1.53

 

 

$

0.88

 

 

 

57.5

%

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

9,613

 

 

 

9,399

 

 

 

(214

)

 

 

(2.3

)%

 

 

9,591

 

 

 

9,363

 

 

 

(228

)

 

 

(2.4

)%

Diluted

 

 

9,863

 

 

 

9,566

 

 

 

(297

)

 

 

(3.1

)%

 

 

9,805

 

 

 

9,595

 

 

 

(210

)

 

 

(2.2

)%

Return on average assets (annualized)

 

 

1.9

%

 

 

1.4

%

 

 

 

 

 

 

 

 

2.7

%

 

 

1.7

%

 

 

 

 

 

 

Return on average equity (annualized)

 

 

10.0

%

 

 

7.6

%

 

 

 

 

 

 

 

 

14.1

%

 

 

9.3

%

 

 

 

 

 

 

Regional Management Corp. and Subsidiaries

Consolidated Balance Sheets

(Unaudited)

(dollars in thousands, except par value amounts)

 

 

 

 

 

 

 

 

 

Increase (Decrease)

 

 

 

2Q 24

 

 

2Q 23

 

 

$

 

 

%

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash

 

$

4,323

 

 

$

10,330

 

 

$

(6,007

)

 

 

(58.2

)%

Net finance receivables

 

 

1,773,743

 

 

 

1,688,937

 

 

 

84,806

 

 

 

5.0

%

Unearned insurance premiums

 

 

(46,081

)

 

 

(49,059

)

 

 

2,978

 

 

 

6.1

%

Allowance for credit losses

 

 

(185,400

)

 

 

(181,400

)

 

 

(4,000

)

 

 

(2.2

)%

Net finance receivables, less unearned insurance premiums and allowance for credit losses

 

 

1,542,262

 

 

 

1,458,478

 

 

 

83,784

 

 

 

5.7

%

Restricted cash

 

 

138,891

 

 

 

131,132

 

 

 

7,759

 

 

 

5.9

%

Lease assets

 

 

35,144

 

 

 

34,996

 

 

 

148

 

 

 

0.4

%

Intangible assets

 

 

19,264

 

 

 

13,949

 

 

 

5,315

 

 

 

38.1

%

Property and equipment

 

 

13,411

 

 

 

14,689

 

 

 

(1,278

)

 

 

(8.7

)%

Deferred tax assets, net

 

 

12,376

 

 

 

15,278

 

 

 

(2,902

)

 

 

(19.0

)%

Restricted available-for-sale investments

 

 

2,157

 

 

 

20,298

 

 

 

(18,141

)

 

 

(89.4

)%

Other assets

 

 

21,224

 

 

 

24,466

 

 

 

(3,242

)

 

 

(13.3

)%

Total assets

 

$

1,789,052

 

 

$

1,723,616

 

 

$

65,436

 

 

 

3.8

%

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Debt

 

$

1,378,449

 

 

$

1,344,855

 

 

$

33,594

 

 

 

2.5

%

Unamortized debt issuance costs

 

 

(5,616

)

 

 

(6,923

)

 

 

1,307

 

 

 

18.9

%

Net debt

 

 

1,372,833

 

 

 

1,337,932

 

 

 

34,901

 

 

 

2.6

%

Lease liabilities

 

 

37,286

 

 

 

37,150

 

 

 

136

 

 

 

0.4

%

Accounts payable and accrued expenses

 

 

34,030

 

 

 

27,032

 

 

 

6,998

 

 

 

25.9

%

Total liabilities

 

 

1,444,149

 

 

 

1,402,114

 

 

 

42,035

 

 

 

3.0

%

Stockholders’ equity:

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock ($0.10 par value, 100,000 shares authorized, none issued or outstanding)

 

 

 

 

 

 

 

 

 

 

 

 

Common stock ($0.10 par value, 1,000,000 shares authorized, 14,962 shares issued and 10,156 shares outstanding at June 30, 2024 and 14,636 shares issued and 9,829 shares outstanding at June 30, 2023)

 

 

1,496

 

 

 

1,464

 

 

 

32

 

 

 

2.2

%

Additional paid-in capital

 

 

126,373

 

 

 

116,202

 

 

 

10,171

 

 

 

8.8

%

Retained earnings

 

 

367,216

 

 

 

354,346

 

 

 

12,870

 

 

 

3.6

%

Accumulated other comprehensive loss

 

 

(39

)

 

 

(367

)

 

 

328

 

 

 

89.4

%

Treasury stock (4,807 shares at June 30, 2024 and June 30, 2023)

 

 

(150,143

)

 

 

(150,143

)

 

 

 

 

 

 

Total stockholders’ equity

 

 

344,903

 

 

 

321,502

 

 

 

23,401

 

 

 

7.3

%

Total liabilities and stockholders’ equity

 

$

1,789,052

 

 

$

1,723,616

 

 

$

65,436

 

 

 

3.8

%

Regional Management Corp. and Subsidiaries

Selected Financial Data

(Unaudited)

(dollars in thousands, except per share amounts)

 

 

 

Net Finance Receivables

 

 

 

2Q 24

 

 

1Q 24

 

 

QoQ $

Inc (Dec)

 

 

QoQ %

Inc (Dec)

 

 

2Q 23

 

 

YoY $

Inc (Dec)

 

 

YoY %

Inc (Dec)

 

Large loans

 

$

1,266,032

 

 

$

1,250,647

 

 

$

15,385

 

 

 

1.2

%

 

$

1,238,031

 

 

$

28,001

 

 

 

2.3

%

Small loans

 

 

505,640

 

 

 

490,830

 

 

 

14,810

 

 

 

3.0

%

 

 

444,590

 

 

 

61,050

 

 

 

13.7

%

Retail loans

 

 

2,071

 

 

 

2,809

 

 

 

(738

)

 

 

(26.3

)%

 

 

6,316

 

 

 

(4,245

)

 

 

(67.2

)%

Total net finance receivables

 

$

1,773,743

 

 

$

1,744,286

 

 

$

29,457

 

 

 

1.7

%

 

$

1,688,937

 

 

$

84,806

 

 

 

5.0

%

Number of branches at period end

 

 

343

 

 

 

343

 

 

 

 

 

 

 

 

 

347

 

 

 

(4

)

 

 

(1.2

)%

Net finance receivables per branch

 

$

5,171

 

 

$

5,085

 

 

$

86

 

 

 

1.7

%

 

$

4,867

 

 

$

304

 

 

 

6.2

%

 

 

Averages and Yields

 

 

 

2Q 24

 

 

1Q 24

 

 

2Q 23

 

 

 

Average Net Finance Receivables

 

 

Average

Yield (1)

 

 

Average Net Finance Receivables

 

 

Average

Yield (1)

 

 

Average Net Finance Receivables

 

 

Average

Yield (1)

 

Large loans

 

$

1,255,729

 

 

 

26.1

%

 

$

1,263,491

 

 

 

26.0

%

 

$

1,223,339

 

 

 

26.0

%

Small loans

 

 

490,615

 

 

 

37.3

%

 

 

491,911

 

 

 

37.8

%

 

 

443,601

 

 

 

34.5

%

Retail loans

 

 

2,433

 

 

 

16.6

%

 

 

3,341

 

 

 

15.8

%

 

 

7,191

 

 

 

16.6

%

Total interest and fee yield

 

$

1,748,777

 

 

 

29.3

%

 

$

1,758,743

 

 

 

29.3

%

 

$

1,674,131

 

 

 

28.2

%

Total revenue yield

 

$

1,748,777

 

 

 

32.7

%

 

$

1,758,743

 

 

 

32.8

%

 

$

1,674,131

 

 

 

31.9

%

(1) Annualized interest and fee income as a percentage of average net finance receivables.

 

 

Components of Increase in Interest and Fee Income

 

 

 

2Q 24 Compared to 2Q 23

 

 

 

Increase (Decrease)

 

 

 

Volume

 

 

Rate

 

 

Volume & Rate

 

 

Total

 

Large loans

 

$

2,105

 

 

$

380

 

 

$

10

 

 

$

2,495

 

Small loans

 

 

4,057

 

 

 

3,129

 

 

 

331

 

 

 

7,517

 

Retail loans

 

 

(197

)

 

 

1

 

 

 

(1

)

 

 

(197

)

Product mix

 

 

(700

)

 

 

846

 

 

 

(146

)

 

 

 

Total increase in interest and fee income

 

$

5,265

 

 

$

4,356

 

 

$

194

 

 

$

9,815

 

 

 

Loans Originated (1)

 

 

 

2Q 24

 

 

1Q 24

 

 

QoQ $

Inc (Dec)

 

 

QoQ %

Inc (Dec)

 

 

2Q 23

 

 

YoY $

Inc (Dec)

 

 

YoY %

Inc (Dec)

 

Large loans

 

$

254,779

 

 

$

185,074

 

 

$

69,705

 

 

 

37.7

%

 

$

249,514

 

 

$

5,265

 

 

 

2.1

%

Small loans

 

 

171,282

 

 

 

141,281

 

 

 

30,001

 

 

 

21.2

%

 

 

149,460

 

 

 

21,822

 

 

 

14.6

%

Total loans originated

 

$

426,061

 

 

$

326,355

 

 

$

99,706

 

 

 

30.6

%

 

$

398,974

 

 

$

27,087

 

 

 

6.8

%

(1) Represents the principal balance of loan originations and refinancings.

 

 

Other Key Metrics

 

 

 

2Q 24

 

 

1Q 24

 

 

2Q 23

 

Net credit losses

 

$

55,502

 

 

$

46,723

 

 

$

54,951

 

Percentage of average net finance receivables (annualized)

 

 

12.7

%

 

 

10.6

%

 

 

13.1

%

Provision for credit losses

 

$

53,802

 

 

$

46,423

 

 

$

52,551

 

Percentage of average net finance receivables (annualized)

 

 

12.3

%

 

 

10.6

%

 

 

12.6

%

Percentage of total revenue

 

 

37.6

%

 

 

32.2

%

 

 

39.4

%

General and administrative expenses

 

$

60,136

 

 

$

60,448

 

 

$

56,896

 

Percentage of average net finance receivables (annualized)

 

 

13.8

%

 

 

13.7

%

 

 

13.6

%

Percentage of total revenue

 

 

42.0

%

 

 

41.9

%

 

 

42.6

%

Same store results (1):

 

 

 

 

 

 

 

 

 

Net finance receivables at period-end

 

$

1,759,075

 

 

$

1,733,237

 

 

$

1,636,131

 

Net finance receivable growth rate

 

 

4.5

%

 

 

3.4

%

 

 

7.2

%

Number of branches in calculation

 

 

338

 

 

 

340

 

 

 

329

 

(1) Same store sales reflect the change in year-over-year sales for the comparable branch base. The comparable branch base includes those branches open for at least one year.

 

 

Contractual Delinquency

 

 

 

2Q 24

 

 

1Q 24

 

 

2Q 23

 

Allowance for credit losses

 

$

185,400

 

 

 

10.5

%

 

$

187,100

 

 

 

10.7

%

 

$

181,400

 

 

 

10.7

%

 

 

 

Current

 

 

1,497,219

 

 

 

84.4

%

 

 

1,489,510

 

 

 

85.4

%

 

 

1,433,787

 

 

 

84.9

%

1 to 29 days past due

 

 

153,788

 

 

 

8.7

%

 

 

130,578

 

 

 

7.5

%

 

 

138,810

 

 

 

8.2

%

Delinquent accounts:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30 to 59 days

 

 

34,924

 

 

 

1.9

%

 

 

30,020

 

 

 

1.7

%

 

 

33,676

 

 

 

2.0

%

60 to 89 days

 

 

27,689

 

 

 

1.6

%

 

 

25,409

 

 

 

1.5

%

 

 

24,931

 

 

 

1.5

%

90 to 119 days

 

 

21,607

 

 

 

1.2

%

 

 

23,460

 

 

 

1.3

%

 

 

20,041

 

 

 

1.1

%

120 to 149 days

 

 

19,333

 

 

 

1.1

%

 

 

22,163

 

 

 

1.3

%

 

 

18,087

 

 

 

1.1

%

150 to 179 days

 

 

19,183

 

 

 

1.1

%

 

 

23,146

 

 

 

1.3

%

 

 

19,605

 

 

 

1.2

%

Total contractual delinquency

 

$

122,736

 

 

 

6.9

%

 

$

124,198

 

 

 

7.1

%

 

$

116,340

 

 

 

6.9

%

Total net finance receivables

 

$

1,773,743

 

 

 

100.0

%

 

$

1,744,286

 

 

 

100.0

%

 

$

1,688,937

 

 

 

100.0

%

1 day and over past due

 

$

276,524

 

 

 

15.6

%

 

$

254,776

 

 

 

14.6

%

 

$

255,150

 

 

 

15.1

%

 

 

Contractual Delinquency by Product

 

 

 

2Q 24

 

 

1Q 24

 

 

2Q 23

 

Large loans

 

$

76,432

 

 

 

6.0

%

 

$

78,055

 

 

 

6.2

%

 

$

74,637

 

 

 

6.0

%

Small loans

 

 

46,015

 

 

 

9.1

%

 

 

45,804

 

 

 

9.3

%

 

 

40,894

 

 

 

9.2

%

Retail loans

 

 

289

 

 

 

14.0

%

 

 

339

 

 

 

12.1

%

 

 

809

 

 

 

12.8

%

Total contractual delinquency

 

$

122,736

 

 

 

6.9

%

 

$

124,198

 

 

 

7.1

%

 

$

116,340

 

 

 

6.9

%

 

 

Income Statement Quarterly Trend

 

 

 

2Q 23

 

 

3Q 23

 

 

4Q 23

 

 

1Q 24

 

 

2Q 24

 

 

QoQ $

B(W)

 

 

YoY $

B(W)

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fee income

 

$

118,083

 

 

$

125,018

 

 

$

126,190

 

 

$

128,818

 

 

$

127,898

 

 

$

(920

)

 

$

9,815

 

Insurance income, net

 

 

11,203

 

 

 

11,382

 

 

 

10,985

 

 

 

10,974

 

 

 

10,507

 

 

 

(467

)

 

 

(696

)

Other income

 

 

4,198

 

 

 

4,478

 

 

 

4,484

 

 

 

4,516

 

 

 

4,620

 

 

 

104

 

 

 

422

 

Total revenue

 

 

133,484

 

 

 

140,878

 

 

 

141,659

 

 

 

144,308

 

 

 

143,025

 

 

 

(1,283

)

 

 

9,541

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for credit losses

 

 

52,551

 

 

 

50,930

 

 

 

68,885

 

 

 

46,423

 

 

 

53,802

 

 

 

(7,379

)

 

 

(1,251

)

 

 

 

 

 

 

 

Personnel

 

 

36,419

 

 

 

39,832

 

 

 

42,024

 

 

 

37,820

 

 

 

37,097

 

 

 

723

 

 

 

(678

)

Occupancy

 

 

6,158

 

 

 

6,315

 

 

 

6,268

 

 

 

6,375

 

 

 

6,149

 

 

 

226

 

 

 

9

 

Marketing

 

 

3,844

 

 

 

4,077

 

 

 

4,474

 

 

 

4,315

 

 

 

4,836

 

 

 

(521

)

 

 

(992

)

Other

 

 

10,475

 

 

 

11,880

 

 

 

12,030

 

 

 

11,938

 

 

 

12,054

 

 

 

(116

)

 

 

(1,579

)

Total general and administrative

 

 

56,896

 

 

 

62,104

 

 

 

64,796

 

 

 

60,448

 

 

 

60,136

 

 

 

312

 

 

 

(3,240

)

 

 

 

 

 

 

 

Interest expense

 

 

16,224

 

 

 

16,947

 

 

 

17,510

 

 

 

17,504

 

 

 

17,865

 

 

 

(361

)

 

 

(1,641

)

Income before income taxes

 

 

7,813

 

 

 

10,897

 

 

 

(9,532

)

 

 

19,933

 

 

 

11,222

 

 

 

(8,711

)

 

 

3,409

 

Income taxes

 

 

1,790

 

 

 

2,077

 

 

 

(1,958

)

 

 

4,728

 

 

 

2,777

 

 

 

1,951

 

 

 

(987

)

Net income (loss)

 

$

6,023

 

 

$

8,820

 

 

$

(7,574

)

 

$

15,205

 

 

$

8,445

 

 

$

(6,760

)

 

$

2,422

 

Net income (loss) per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.64

 

 

$

0.94

 

 

$

(0.80

)

 

$

1.59

 

 

$

0.88

 

 

$

(0.71

)

 

$

0.24

 

Diluted

 

$

0.63

 

 

$

0.91

 

 

$

(0.80

)

 

$

1.56

 

 

$

0.86

 

 

$

(0.70

)

 

$

0.23

 

Weighted-average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

9,399

 

 

 

9,429

 

 

 

9,437

 

 

 

9,569

 

 

 

9,613

 

 

 

(44

)

 

 

(214

)

Diluted

 

 

9,566

 

 

 

9,650

 

 

 

9,437

 

 

 

9,746

 

 

 

9,863

 

 

 

(117

)

 

 

(297

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet Quarterly Trend

 

 

 

2Q 23

 

 

3Q 23

 

 

4Q 23

 

 

1Q 24

 

 

2Q 24

 

 

QoQ $

Inc (Dec)

 

 

YoY $

Inc (Dec)

 

Total assets

 

$

1,723,616

 

 

$

1,765,340

 

 

$

1,794,527

 

 

$

1,756,748

 

 

$

1,789,052

 

 

$

32,304

 

 

$

65,436

 

Net finance receivables

 

$

1,688,937

 

 

$

1,751,009

 

 

$

1,771,410

 

 

$

1,744,286

 

 

$

1,773,743

 

 

$

29,457

 

 

$

84,806

 

Allowance for credit losses

 

$

181,400

 

 

$

184,900

 

 

$

187,400

 

 

$

187,100

 

 

$

185,400

 

 

$

(1,700

)

 

$

4,000

 

Debt

 

$

1,344,855

 

 

$

1,372,748

 

 

$

1,399,814

 

 

$

1,358,795

 

 

$

1,378,449

 

 

$

19,654

 

 

$

33,594

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Key Metrics Quarterly Trend

 

 

 

2Q 23

 

 

3Q 23

 

 

4Q 23

 

 

1Q 24

 

 

2Q 24

 

 

QoQ

Inc (Dec)

 

 

YoY

Inc (Dec)

 

Interest and fee yield (annualized)

 

 

28.2

%

 

 

29.0

%

 

 

28.8

%

 

 

29.3

%

 

 

29.3

%

 

 

 

 

 

1.1

%

Efficiency ratio (1)

 

 

42.6

%

 

 

44.1

%

 

 

45.7

%

 

 

41.9

%

 

 

42.0

%

 

 

0.1

%

 

 

(0.6

)%

Operating expense ratio (2)

 

 

13.6

%

 

 

14.4

%

 

 

14.8

%

 

 

13.7

%

 

 

13.8

%

 

 

0.1

%

 

 

0.2

%

30+ contractual delinquency

 

 

6.9

%

 

 

7.3

%

 

 

6.9

%

 

 

7.1

%

 

 

6.9

%

 

 

(0.2

)%

 

 

 

Net credit loss ratio (3)

 

 

13.1

%

 

 

11.0

%

 

 

15.1

%

 

 

10.6

%

 

 

12.7

%

 

 

2.1

%

 

 

(0.4

)%

Book value per share

 

$

32.71

 

 

$

33.61

 

 

$

33.02

 

 

$

34.10

 

 

$

33.96

 

 

$

(0.14

)

 

$

1.25

 

(1) General and administrative expenses as a percentage of total revenue.

(2) Annualized general and administrative expenses as a percentage of average net finance receivables.

(3) Annualized net credit losses as a percentage of average net finance receivables.

 

 

Averages and Yields

 

 

 

YTD 24

 

 

YTD 23

 

 

 

Average Net Finance Receivables

 

 

Average

Yield (1)

 

 

Average Net Finance Receivables

 

 

Average

Yield (1)

 

Large loans

 

$

1,259,611

 

 

 

26.1

%

 

$

1,219,464

 

 

 

26.0

%

Small loans

 

 

491,262

 

 

 

37.6

%

 

 

455,659

 

 

 

34.8

%

Retail loans

 

 

2,887

 

 

 

16.1

%

 

 

8,068

 

 

 

17.7

%

Total interest and fee yield

 

$

1,753,760

 

 

 

29.3

%

 

$

1,683,191

 

 

 

28.3

%

Total revenue yield

 

$

1,753,760

 

 

 

32.8

%

 

$

1,683,191

 

 

 

31.9

%

 

 

Components of Increase in Interest and Fee Income

 

 

 

YTD 24 Compared to YTD 23

 

 

 

Increase (Decrease)

 

 

 

Volume

 

 

Rate

 

 

Volume & Rate

 

 

Total

 

Large loans

 

$

5,219

 

 

$

407

 

 

$

13

 

 

$

5,639

 

Small loans

 

 

6,193

 

 

 

6,378

 

 

 

498

 

 

 

13,069

 

Retail loans

 

 

(459

)

 

 

(64

)

 

 

41

 

 

 

(482

)

Product mix

 

 

(954

)

 

 

1,175

 

 

 

(221

)

 

 

 

Total increase in interest and fee income

 

$

9,999

 

 

$

7,896

 

 

$

331

 

 

$

18,226

 

 

 

Loans Originated (1)

 

 

 

YTD 24

 

 

YTD 23

 

 

YTD $

Inc (Dec)

 

 

YTD %

Inc (Dec)

 

Large loans

 

$

439,853

 

 

$

443,085

 

 

$

(3,232

)

 

 

(0.7

)%

Small loans

 

 

312,563

 

 

 

258,944

 

 

 

53,619

 

 

 

20.7

%

Retail loans

 

 

 

 

 

146

 

 

 

(146

)

 

 

(100.0

)%

Total loans originated

 

$

752,416

 

 

$

702,175

 

 

$

50,241

 

 

 

7.2

%

(1) Represents the principal balance of loan originations and refinancings.

 

 

Other Key Metrics

 

 

 

YTD 24

 

 

YTD 23

 

Net credit losses

 

$

102,225

 

 

$

97,619

 

Percentage of average net finance receivables (annualized)

 

 

11.7

%

 

 

11.6

%

Provision for credit losses

 

$

100,225

 

 

$

100,219

 

Percentage of average net finance receivables (annualized)

 

 

11.4

%

 

 

11.9

%

Percentage of total revenue

 

 

34.9

%

 

 

37.3

%

General and administrative expenses

 

$

120,584

 

 

$

116,219

 

Percentage of average net finance receivables (annualized)

 

 

13.8

%

 

 

13.8

%

Percentage of total revenue

 

 

42.0

%

 

 

43.2

%

Non-GAAP Financial Measures

In addition to financial measures presented in accordance with generally accepted accounting principles (“GAAP”), this press release contains certain non-GAAP financial measures. The company’s management utilizes non-GAAP measures as additional metrics to aid in, and enhance, its understanding of the company’s financial results. Tangible equity and the funded debt-to-tangible equity ratio are non-GAAP measures that adjust GAAP measures to exclude intangible assets. Management uses these equity measures to evaluate and manage the company’s capital and leverage position. The company also believes that these equity measures are commonly used in the financial services industry and provide useful information to users of the company’s financial statements in the evaluation of its capital and leverage position.

This non-GAAP financial information should be considered in addition to, not as a substitute for or superior to, measures of financial performance prepared in accordance with GAAP. In addition, the company’s non-GAAP measures may not be comparable to similarly titled non-GAAP measures of other companies. The following tables provide a reconciliation of GAAP measures to non-GAAP measures.

 

 

2Q 24

 

Debt

 

$

1,378,449

 

 

Total stockholders' equity

 

 

344,903

 

Less: Intangible assets

 

 

19,264

 

Tangible equity (non-GAAP)

 

$

325,639

 

 

Funded debt-to-equity ratio

 

 

4.0

x

Funded debt-to-tangible equity ratio (non-GAAP)

 

 

4.2

x

 

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