- Net income of $7.5 million and diluted
earnings per share of $0.68 -
- 6.6% year-over-year revenue growth and 9.9%
average net finance receivables growth -
- Historical low 30+ day contractual
delinquencies of 4.5% as of July 31, 2020 -
- Available liquidity of $162 million as of
July 31, 2020 -
Regional Management Corp. (NYSE: RM), a diversified consumer
finance company, today announced results for the second quarter
ended June 30, 2020.
“Our omni-channel capabilities and proactive credit initiatives
have successfully supported our customers and enabled us to
navigate through this challenging period,” said Robert W. Beck,
President and Chief Executive Officer of Regional Management Corp.
“Our customers have accessed our borrower assistance programs as
needed, and along with the government stimulus, these programs have
enabled us to maintain a low 30+ day delinquency rate during the
crisis. In addition, demand for loan originations continues to
rebound steadily from the low point in April, and our new remote
loan closing capabilities have provided our customers with a safe
and effective way to access our responsible and affordable credit
solutions.”
“Additionally, we continue to maintain a strong liquidity
profile, buoyed by the work we accomplished over the past several
years to strengthen our balance sheet,” added Mr. Beck. “As of July
31, 2020, we had $162 million of available liquidity and $486
million of unused capacity on our revolving credit facilities.
Looking ahead, we expect to remain focused in the coming months on
further enhancing our digital capabilities, gradually relaunching
additional marketing initiatives as demand returns, and continuing
to originate loans that meet our advanced and measured underwriting
criteria. With a proven operating model, a strong balance sheet,
and ample liquidity, we remain well positioned to manage through
the current environment and are prepared to return to strong growth
as the economy rebounds.”
Second Quarter 2020 Highlights
- Net income for the second quarter of 2020 was $7.5 million and
diluted earnings per share was $0.68, compared to net income of
$8.4 million and diluted earnings per share of $0.70 in the
prior-year period.
- Net finance receivables as of June 30, 2020 were $1.0 billion,
an increase of 2.8%, or $27.7 million, from the prior-year
period.
- Total core small and large loan net finance
receivables increased $46.7 million, or 4.9%, compared to the
prior-year period.
- Large loan net finance receivables of
$618.1 million increased $102.1 million, or 19.8%, from the
prior-year period and represented 60.4% of the total loan
portfolio. Small loan net finance receivables as of June 30, 2020
were $380.1 million, a decrease of 12.7% from the prior-year
period.
- Total revenue for the second quarter of 2020 was $89.9 million,
a $5.6 million, or 6.6%, increase from the prior-year period.
- Interest and fee income increased 5.4%,
primarily attributable to a 9.9% increase in average net finance
receivables compared to the prior-year period.
- Insurance income, net increased $2.6
million, driven by an increase in premium revenue and a decrease in
non-file insurance claims expense.
- Provision for credit losses for the second quarter of 2020 was
$27.5 million, an increase of $1.8 million, or 6.9%, from the
prior-year period. The provision for credit losses includes an
incremental build in the allowance for credit losses of $9.5
million related to the expected economic impact of the COVID-19
pandemic, offset by a $9.9 million base reserve release related to
portfolio liquidation.
- Annualized net credit losses as a percentage of average net
finance receivables were 10.6%, a 20 basis point increase from
10.4% in the prior-year period.
- 30+ day contractual delinquencies as of June 30, 2020 were
4.8%, compared to 6.3% in the prior-year period. 30+ day
contractual delinquencies stood at 4.5% as of July 31, 2020, an
additional improvement of 30 basis points from June 30, 2020. In
June, 2.3% of customer accounts were renewed or deferred under
internal borrower assistance programs, which is consistent with the
average of 2.2% over the twelve months preceding the pandemic.
- General and administrative expenses for the second quarter of
2020 were $41.5 million, an increase of $3.8 million, or 10.0%,
from the prior-year period. The company deferred $2.0 million less
in loan origination costs on reduced loan volume in the second
quarter of 2020, which increased personnel expense from the
prior-year period. The second quarter of 2020 included $0.9 million
of incremental costs related to new branches that opened since the
prior-year period and $0.6 million of COVID-19 expenses for
customer communications and protective measures in our
branches.
- The operating expense ratio (annualized general and
administrative expenses as a percentage of average net finance
receivables) was 15.8%, comparable with the prior-year period.
Reduced deferred loan origination costs and direct COVID-19
expenses impacted the operating expense ratio by 100 basis points
in the second quarter of 2020 compared to the prior-year
period.
- As of June 30, 2020, the company had total unused capacity on
its revolving credit facilities of $493 million, subject to the
borrowing base.
- As of July 31, 2020, the company had available liquidity of
$162 million, including unrestricted cash on hand and immediate
availability to draw down cash from its revolving credit
facilities.
2020 De Novo Outlook
As of June 30, 2020, the company’s branch network consisted of
368 locations. During the second half of 2020, subject to the
changing economic environment, the company plans to open
approximately three de novo branches where it sees clear expansion
opportunities in its current footprint.
Liquidity and Capital Resources
As of June 30, 2020, the company had net finance receivables of
$1.0 billion and outstanding long-term debt of $683.9 million
($682.0 million of outstanding debt and $1.8 million of interest
payable), consisting of:
- $246.3 million on its $640.0 million senior revolving credit
facility,
- $26.8 million on its $125.0 million revolving warehouse credit
facility, and
- $410.8 million through its asset-backed securitizations.
The company’s unused capacity on its revolving credit facilities
(subject to the borrowing base) was $493 million, or 64.5%, as of
June 30, 2020.
The company had a funded debt-to-equity ratio of 2.6 to 1.0 and
a stockholders’ equity ratio of 26.0% as of June 30, 2020. On a
non-GAAP basis, the company had a funded debt-to-tangible equity
ratio of 2.7 to 1.0 as of June 30, 2020. 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 replay will be available following the end of the call through
Wednesday, August 12, 2020, by telephone at (844) 512-2921
(toll-free) or (412) 317-6671 (international), passcode 10010118. 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” in 368 branch locations across 11
states in the Southeastern, Southwestern, Mid-Atlantic, and
Midwestern United States, as of June 30, 2020. 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, retailers, 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 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: changes
in general economic conditions, including levels of unemployment
and bankruptcies; the impact of the recent outbreak of a novel
coronavirus (COVID-19), including on Regional Management’s access
to liquidity and the credit risk of Regional Management’s finance
receivable portfolio; risks associated with Regional Management’s
ability to timely and effectively implement, transition to, and
maintain the necessary information technology systems,
infrastructure, processes, and controls to support its operations
and initiatives; risks associated with Regional Management’s loan
origination and servicing software system, including the risk of
prolonged system outages; risks related to opening new branches,
including the ability or inability to open new branches as planned;
risks inherent in making loans, including credit risk, repayment
risk, and value of collateral, which risks may increase in light of
adverse or recessionary economic conditions; risks associated with
the implementation of new underwriting models and processes,
including as to the effectiveness of new custom scorecards; risks
relating to Regional Management’s asset-backed securitization
transactions; changes in interest rates; the risk that Regional
Management’s existing sources of liquidity become insufficient to
satisfy its needs or that its access to these sources becomes
unexpectedly restricted; changes in federal, state, or local laws,
regulations, or regulatory policies and practices, and risks
associated with the manner in which laws and regulations are
interpreted, implemented, and enforced; changes in accounting
standards, rules, and interpretations, and the failure of related
assumptions and estimates, including those associated with the
implementation of current expected credit loss (CECL) accounting;
the impact of changes in tax laws, guidance, and interpretations;
the timing and amount of revenues that may be recognized by
Regional Management; changes in current revenue and expense trends
(including trends affecting delinquencies and credit losses);
changes in Regional Management’s markets and general changes in the
economy (particularly in the markets served by Regional
Management); changes in the competitive environment in which
Regional Management operates or a decrease in the demand for its
products; risks related to acquisitions; changes in operating and
administrative expenses; and the departure, transition, or
replacement of key personnel. The COVID-19 pandemic may also
magnify many of these risks and uncertainties.
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)
(in thousands, except per
share amounts)
Better (Worse)
Better (Worse)
2Q 20
2Q 19
$
%
YTD 20
YTD 19
$
%
Revenue
Interest and fee income
$
80,067
$
75,974
$
4,093
5.4
%
$
167,064
$
150,296
$
16,768
11.2
%
Insurance income, net
7,650
5,066
2,584
51.0
%
13,599
9,179
4,420
48.2
%
Other income
2,133
3,234
(1,101
)
(34.0
) %
5,261
6,547
(1,286
)
(19.6
) %
Total revenue
89,850
84,274
5,576
6.6
%
185,924
166,022
19,902
12.0
%
Expenses
Provision for credit losses
27,499
25,714
(1,785
)
(6.9
) %
77,021
49,057
(27,964
)
(57.0
) %
Personnel
26,863
22,511
(4,352
)
(19.3
) %
56,374
44,904
(11,470
)
(25.5
) %
Occupancy
6,253
6,210
(43
)
(0.7
) %
12,024
12,375
351
2.8
%
Marketing
1,438
2,261
823
36.4
%
3,124
3,912
788
20.1
%
Other
6,971
6,761
(210
)
(3.1
) %
16,246
14,735
(1,511
)
(10.3
) %
Total general and administrative
41,525
37,743
(3,782
)
(10.0
) %
87,768
75,926
(11,842
)
(15.6
) %
Interest expense
9,137
9,771
634
6.5
%
19,296
19,492
196
1.0
%
Income before income taxes
11,689
11,046
643
5.8
%
1,839
21,547
(19,708
)
(91.5
) %
Income taxes
4,219
2,677
(1,542
)
(57.6
) %
694
5,070
4,376
86.3
%
Net income
$
7,470
$
8,369
$
(899
)
(10.7
)%
$
1,145
$
16,477
$
(15,332
)
(93.1
) %
Net income per common share:
Basic
$
0.68
$
0.71
$
(0.03
)
(4.2
) %
$
0.10
$
1.41
$
(1.31
)
(92.9
) %
Diluted
$
0.68
$
0.70
$
(0.02
)
(2.9
) %
$
0.10
$
1.37
$
(1.27
)
(92.7
) %
Weighted-average shares outstanding:
Basic
10,962
11,706
744
6.4
%
10,929
11,709
780
6.7
%
Diluted
11,013
12,022
1,009
8.4
%
11,130
12,049
919
7.6
%
Return on average assets (annualized)
2.9
%
3.4
%
0.2
%
3.4
%
Return on average equity (annualized)
11.7
%
11.5
%
0.9
%
11.5
%
Regional Management Corp. and
Subsidiaries
Consolidated Balance
Sheets
(Unaudited)
(in thousands, except par
value amounts)
Increase (Decrease)
2Q 20
2Q 19
$
%
Assets
Cash
$
8,973
$
694
$
8,279
1,192.9
%
Net finance receivables
1,022,635
994,980
27,655
2.8
%
Unearned insurance premiums
(27,016
)
(21,546
)
(5,470
)
(25.4
) %
Allowance for credit losses
(142,000
)
(57,200
)
(84,800
)
(148.3
) %
Net finance receivables, less unearned
insurance premiums and allowance for credit losses
853,619
916,234
(62,615
)
(6.8
) %
Restricted cash
54,423
41,803
12,620
30.2
%
Lease assets
27,177
25,575
1,602
6.3
%
Property and equipment
15,504
14,132
1,372
9.7
%
Intangible assets
8,824
9,953
(1,129
)
(11.3
) %
Deferred tax asset
20,682
437
20,245
4,632.7
%
Other assets
11,023
10,488
535
5.1
%
Total assets
$
1,000,225
$
1,019,316
$
(19,091
)
(1.9
) %
Liabilities and Stockholders’
Equity
Liabilities:
Long-term debt
$
683,865
$
689,310
$
(5,445
)
(0.8
) %
Unamortized debt issuance costs
(7,584
)
(7,357
)
(227
)
(3.1
) %
Net long-term debt
676,281
681,953
(5,672
)
(0.8
) %
Accounts payable and accrued expenses
34,843
19,690
15,153
77.0
%
Lease liabilities
29,220
27,454
1,766
6.4
%
Total liabilities
740,344
729,097
11,247
1.5
%
Stockholders’ equity:
Preferred stock ($0.10 par value, 100,000
shares authorized, no shares issued or outstanding)
—
—
—
—
Common stock ($0.10 par value, 1,000,000
shares authorized, 13,727 shares issued and 11,243 shares
outstanding at June 30, 2020 and 13,494 shares issued and 11,663
shares outstanding at June 30, 2019)
1,373
1,349
24
1.8
%
Additional paid-in capital
104,530
100,486
4,044
4.0
%
Retained earnings
204,052
220,574
(16,522
)
(7.5
) %
Treasury stock (2,484 shares at June 30,
2020 and 1,831 shares at June 30, 2019)
(50,074
)
(32,190
)
(17,884
)
(55.6
) %
Total stockholders’ equity
259,881
290,219
(30,338
)
(10.5
) %
Total liabilities and stockholders’
equity
$
1,000,225
1,019,316
$
(19,091
)
(1.9
) %
Regional Management Corp. and
Subsidiaries
Selected Financial
Data
(Unaudited)
(in thousands, except per
share amounts)
Net Finance Receivables by
Product
2Q 20
1Q 20
QoQ $
Inc (Dec)
QoQ %
Inc (Dec)
2Q 19
YoY $
Inc (Dec)
YoY %
Inc (Dec)
Small loans
$
380,083
$
440,282
$
(60,199
)
(13.7
) %
$
435,467
$
(55,384
)
(12.7
) %
Large loans
618,134
632,593
(14,459
)
(2.3
) %
516,019
102,115
19.8
%
Total core loans
998,217
1,072,875
(74,658
)
(7.0
) %
951,486
46,731
4.9
%
Automobile loans
6,059
7,532
(1,473
)
(19.6
) %
15,717
(9,658
)
(61.4
) %
Retail loans
18,359
21,878
(3,519
)
(16.1
) %
27,777
(9,418
)
(33.9
) %
Total net finance receivables
$
1,022,635
$
1,102,285
$
(79,650
)
(7.2
) %
$
994,980
$
27,655
2.8
%
Number of branches at period end
368
368
—
0.0
%
356
12
3.4
%
Average net finance receivables per
branch
$
2,779
$
2,995
$
(216
)
(7.2
) %
$
2,795
$
(16
)
(0.6
) %
Averages and Yields
2Q 20
1Q 20
2Q 19
Average Net Finance
Receivables
Average Yield
(Annualized)
Average Net Finance
Receivables
Average Yield
(Annualized)
Average Net Finance
Receivables
Average Yield
(Annualized)
Small loans
$
404,019
36.2
%
$
458,132
36.7
%
$
423,699
38.2
%
Large loans
618,860
27.3
%
633,510
27.5
%
484,483
27.7
%
Automobile loans
6,820
14.8
%
8,618
13.5
%
17,972
14.6
%
Retail loans
20,114
18.0
%
23,056
17.8
%
28,786
18.8
%
Total interest and fee yield
$
1,049,813
30.5
%
$
1,123,316
31.0
%
$
954,940
31.8
%
Total revenue yield
$
1,049,813
34.2
%
$
1,123,316
34.2
%
$
954,940
35.3
%
Components of Increase in
Interest and Fee Income 2Q 20 Compared to 2Q 19 Increase
(Decrease)
Volume
Rate
Volume & Rate
Net
Small loans
$
(1,879
)
$
(2,055
)
$
96
$
(3,838
)
Large loans
9,297
(403
)
(112
)
8,782
Automobile loans
(406
)
12
(8
)
(402
)
Retail loans
(409
)
(58
)
18
(449
)
Product mix
945
(639
)
(306
)
—
Total increase in interest and fee
income
$
7,548
$
(3,143
)
$
(312
)
$
4,093
Net Loans Originated (1)
(2)
2Q 20
1Q 20
QoQ $
Inc (Dec)
QoQ %
Inc (Dec)
2Q 19
YoY $
Inc (Dec)
YoY %
Inc (Dec
Small loans
$
79,265
$
120,024
$
(40,759
)
(34.0
) %
$
174,440
$
(95,175
)
(54.6
) %
Large loans
90,980
105,648
(14,668
)
(13.9
) %
169,373
(78,393
)
(46.3
) %
Retail loans
1,907
3,573
(1,666
)
(46.6
) %
5,179
(3,272
)
(63.2
) %
Total net loans originated
$
172,152
$
229,245
$
(57,093
)
(24.9
) %
$
348,992
$
(176,840
)
(50.7
) %
(1)
Represents the balance of loan
origination and refinancing net of unearned finance charges.
(2)
The company ceased originating
automobile loans in November 2017.
Other Key Metrics
2Q 20
1Q 20
2Q 19
Net credit losses
$
27,899
$
29,422
$
24,914
Percentage of average net finance
receivables (annualized)
10.6
%
10.5
%
10.4
%
Provision for credit losses (1)
$
27,499
$
49,522
$
25,714
Percentage of average net finance
receivables (annualized)
10.5
%
17.6
%
10.8
%
Percentage of total revenue
30.6
%
51.5
%
30.5
%
General and administrative expenses (2)
(3)
$
41,525
$
46,243
$
37,743
Percentage of average net finance
receivables (annualized)
15.8
%
16.5
%
15.8
%
Percentage of total revenue
46.2
%
48.1
%
44.8
%
Same store results (4):
Net finance receivables at period-end
$
1,016,776
$
1,093,701
$
977,175
Net finance receivable growth rate
2.2
%
17.6
%
13.0
%
Number of branches in calculation
349
351
333
(1)
Includes COVID-19 pandemic
impacts to provision for credit losses of $9,500 and $23,900 for 2Q
20 and
1Q 20, respectively.
(2)
Includes non-operating executive
transition costs of $3,066 for 1Q 20.
(3)
Includes non-operating loan
management system outage costs of $720 for 1Q 20.
(4)
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 by
Aging
2Q 20
1Q 20
2Q 19
Allowance for credit losses (1)
$
142,000
13.9
%
$
142,400
12.9
%
$
57,200
5.7
%
Current
896,928
87.8
%
931,032
84.4
%
825,726
83.0
%
1 to 29 days past due
76,172
7.4
%
98,896
9.0
%
106,708
10.7
%
Delinquent accounts:
30 to 59 days
15,277
1.4
%
20,907
1.9
%
22,207
2.3
%
60 to 89 days
9,764
1.0
%
16,456
1.5
%
14,039
1.4
%
90 to 119 days
7,014
0.7
%
11,889
1.1
%
10,018
1.0
%
120 to 149 days
8,081
0.8
%
12,059
1.1
%
8,128
0.8
%
150 to 179 days
9,399
0.9
%
11,046
1.0
%
8,154
0.8
%
Total contractual delinquency (2)
$
49,535
4.8
%
$
72,357
6.6
%
$
62,546
6.3
%
Total net finance receivables
$
1,022,635
100.0
%
$
1,102,285
100.0
%
$
994,980
100.0
%
1 day and over past due
$
125,707
12.2
%
$
171,253
15.6
%
$
169,254
17.0
%
Contractual Delinquency by
Product
2Q 20
1Q 20
2Q 19
Small loans
$
24,465
6.4
%
$
37,662
8.6
%
$
33,368
7.7
%
Large loans
23,660
3.8
%
32,201
5.1
%
25,699
5.0
%
Automobile loans
291
4.8
%
508
6.7
%
1,294
8.2
%
Retail loans
1,119
6.1
%
1,986
9.1
%
2,185
7.9
%
Total contractual delinquency (2)
$
49,535
4.8
%
$
72,357
6.6
%
$
62,546
6.3
%
(1)
Includes incremental COVID-19
allowance for credit losses of $33,400 and $23,900 in 2Q 20 and 1Q
20, respectively.
(2)
Includes 0.1% delinquency related
to the loan management system outage in 1Q 20.
Income Statement Quarterly
Trend
2Q 19
3Q 19
4Q 19
1Q 20
2Q 20
QoQ $ B(W)
YoY $ B(W)
Revenue
Interest and fee income
$
75,974
$
83,089
$
87,784
$
86,997
$
80,067
$
(6,930
)
$
4,093
Insurance income, net
5,066
5,087
6,551
5,949
7,650
1,701
2,584
Other income
3,234
3,531
3,649
3,128
2,133
(995
)
(1,101
)
Total revenue
84,274
91,707
97,984
96,074
89,850
(6,224
)
5,576
Expenses
Provision for credit losses
25,714
24,515
26,039
49,522
27,499
22,023
(1,785
)
Personnel
22,511
23,791
25,305
29,511
26,863
2,648
(4,352
)
Occupancy
6,210
6,367
5,876
5,771
6,253
(482
)
(43
)
Marketing
2,261
2,397
1,897
1,686
1,438
248
823
Other
6,761
7,612
7,813
9,275
6,971
2,304
(210
)
Total general and administrative
37,743
40,167
40,891
46,243
41,525
4,718
(3,782
)
Interest expense
9,771
10,348
10,285
10,159
9,137
1,022
634
Income (loss) before income taxes
11,046
16,677
20,769
(9,850
)
11,689
21,539
643
Income taxes
2,677
4,105
5,086
(3,525
)
4,219
(7,744
)
(1,542
)
Net income (loss)
$
8,369
$
12,572
$
15,683
$
(6,325
)
$
7,470
$
13,795
$
(899
)
Net income (loss) per common share:
Basic
$
0.71
$
1.11
$
1.44
$
(0.58
)
$
0.68
$
1.26
$
(0.03
)
Diluted
$
0.70
$
1.08
$
1.38
$
(0.56
)
$
0.68
$
1.24
$
(0.02
)
Weighted-average shares outstanding:
Basic
11,706
11,302
10,893
10,897
10,962
(65
)
744
Diluted
12,022
11,677
11,327
11,253
11,013
240
1,009
Net interest margin
$
74,503
$
81,359
$
87,699
$
85,915
$
80,713
$
(5,202
)
$
6,210
Net credit margin
$
48,789
$
56,844
$
61,660
$
36,393
$
53,214
$
16,821
$
4,425
Balance Sheet Quarterly
Trend
2Q 19
3Q 19
4Q 19
1Q 20
2Q 20
QoQ $
Inc (Dec)
YoY $
Inc (Dec)
Total assets
$
1,019,316
$
1,086,172
$
1,158,540
$
1,078,890
$
1,000,225
$
(78,665
)
$
(19,091
)
Net finance receivables
$
994,980
$
1,067,086
$
1,133,404
$
1,102,285
$
1,022,635
$
(79,650
)
$
27,655
Allowance for credit losses
$
57,200
$
60,900
$
62,200
$
142,400
$
142,000
$
(400
)
$
84,800
Long-term debt
$
689,310
$
743,835
$
808,218
$
777,847
$
683,865
$
(93,982
)
$
(5,445
)
Other Key Metrics Quarterly
Trend
2Q 19
3Q 19
4Q 19
1Q 20
2Q 20
QoQ
Inc (Dec)
YoY
Inc (Dec)
Interest and fee yield (annualized)
31.8
%
32.1
%
32.0
%
31.0
%
30.5
%
(0.5
) %
(1.3
) %
Efficiency ratio (1)
44.8
%
43.8
%
41.7
%
48.1
%
46.2
%
(1.9
) %
1.4
%
Operating expense ratio (2)
15.8
%
15.5
%
14.9
%
16.5
%
15.8
%
(0.7
) %
0.0
%
30+ contractual delinquency
6.3
%
6.5
%
7.0
%
6.6
%
4.8
%
(1.8
) %
(1.5
) %
Net credit loss ratio (3)
10.4
%
8.1
%
9.0
%
10.5
%
10.6
%
0.1
%
0.2
%
Book value per share
$
24.88
$
26.00
$
27.49
$
22.49
$
23.11
$
0.62
$
(1.77
)
(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 20
YTD 19
Average Net Finance
Receivables
Average Yield
(Annualized)
Average Net Finance
Receivables
Average Yield
(Annualized)
Small loans
$
431,076
36.5
%
$
431,253
38.0
%
Large loans
626,185
27.4
%
468,600
27.4
%
Automobile loans
7,719
14.1
%
20,611
14.7
%
Retail loans
21,585
17.9
%
29,415
18.7
%
Total interest and fee yield
$
1,086,565
30.8
%
$
949,879
31.6
%
Total revenue yield
$
1,086,565
34.2
%
$
949,879
35.0
%
Components of Increase in
Interest and Fee Income YTD 20 Compared to YTD 19 Increase
(Decrease)
Volume
Rate
Volume & Rate
Net
Small loans
$
(34
)
$
(3,163
)
$
2
$
(3,195
)
Large loans
21,580
129
43
21,752
Automobile loans
(949
)
(64
)
40
(973
)
Retail loans
(733
)
(114
)
31
(816
)
Product mix
1,763
(1,036
)
(727
)
—
Total increase in interest and fee
income
$
21,627
$
(4,248
)
$
(611
)
$
16,768
Net Loans Originated (1)
(2)
YTD 20
YTD 19
YTD $
Inc (Dec)
YTD %
Inc (Dec)
Small loans
$ 199,289
$ 303,685
$ (104,396 )
(34.4) %
Large loans
196,628
253,441
(56,813 )
(22.4) %
Retail loans
5,480
11,376
(5,896 )
(51.8) %
Total net loans originated
$ 401,397
$ 568,502
$ (167,105 )
(29.4) %
(1)
Represents the balance of loan
origination and refinancing net of unearned finance charges.
(2)
The company ceased originating
automobile loans in November 2017.
Other Key Metrics
YTD 20
YTD 19
Net credit losses
$
57,321
$
50,157
Percentage of average net finance
receivables (annualized)
10.6
%
10.6
%
Provision for credit losses (1)
$
77,021
$
49,057
Percentage of average net finance
receivables (annualized)
14.2
%
10.3
%
Percentage of total revenue
41.4
%
29.5
%
General and administrative expenses (2)
(3)
$
87,768
$
75,926
Percentage of average net finance
receivables (annualized)
16.2
%
16.0
%
Percentage of total revenue
47.2
%
45.7
%
(1)
Includes COVID-19 pandemic
impacts to provision for credit losses of $33,400 for YTD 20.
(2)
Includes non-operating executive
transition costs of $3,066 for YTD 20.
(3)
Includes non-operating loan
management system outage costs of $720 for YTD 20.
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 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 20
Long-term debt
$
683,865
Total stockholders’ equity
259,881
Less: Intangible assets
8,824
Tangible equity (non-GAAP)
$
251,057
Funded debt-to-equity ratio
2.6x
Funded debt-to-tangible equity ratio
(non-GAAP)
2.7x
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200805006024/en/
Investor Relations Garrett Edson, (203) 682-8331
investor.relations@regionalmanagement.com
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