Net income of $5.3 million and diluted earnings
per share of $0.45, including an estimated $0.18 hurricane impact
and a $0.05 benefit from bulk debt sale
Tenth consecutive quarter of double-digit total
finance receivables growth
Regional Management Corp. (NYSE:RM), a diversified consumer
finance company, today announced results for the third quarter
ended September 30, 2017.
Third Quarter 2017 Highlights and Subsequent Events
- Net income for the third quarter of
2017 was $5.3 million, a decrease of 18.0% from the prior-year
period. Diluted earnings per share for the third quarter of 2017
was $0.45, based on a diluted share count of 11.8 million. Net
income and diluted earnings per share for the third quarter of 2017
included impacts from hurricanes and a bulk sale of the Company’s
previously charged-off bankrupt accounts (“bulk sale”):
Reported diluted earnings per share $
0.45 Estimated impact of hurricanes
$
(0.18
)
Benefit from bulk sale $ 0.05
- Total finance receivables as of
September 30, 2017 were $774.9 million, an increase of 11.3%, or
$78.7 million, from the prior year, and up 6.6%, or $48.1 million,
sequentially.
- Tenth consecutive quarter that total
finance receivables have grown at least 10% over the prior-year
period.
- Total core small and large loan
receivables increased $105.4 million, or 18.6%, compared to the
prior-year period, and $55.2 million, or 9.0%, sequentially.
- Large loan finance receivables of
$308.6 million increased $91.5 million, or 42.2%, from the
prior-year period and now represent 39.8% of the total loan
portfolio. Small loan finance receivables as of September 30, 2017
were $363.3 million, an increase of 4.0% over the prior-year
period.
- Total revenue for the third quarter of
2017 was $69.2 million, a $6.7 million, or 10.8%, increase from the
prior-year period.
- Interest and fee income increase of
10.8%, driven by an 11.3% increase in receivables compared to the
prior-year period.
- Overall yield decrease of 30 basis
points on a year-over-year basis.
- Provision for credit losses for the
third quarter of 2017 was $20.2 million, an increase of $3.7
million compared to the prior-year period. The provision for credit
losses for the third quarter of 2017 included $3.0 million of
incremental hurricane allowance, $1.2 million of higher net credit
losses, and $0.6 million due to a temporary shift of insurance
claims expense (which had no impact on net income), partially
offset by a $1.0 million reduction resulting from the bulk sale.
- Annualized net credit losses as a
percentage of finance receivables were 7.8% (inclusive of 0.5%
attributable to the shift in insurance claims expense noted above
and a 0.5% reduction due to the bulk sale), a decrease from 8.0% in
the prior-year period.
- Total delinquencies as a percentage of
total finance receivables as of September 30, 2017 were 17.5%, an
improvement from 18.2% as of September 30, 2016, and flat
sequentially.
- 30+ day contractual delinquencies were
6.8%, an improvement from 7.1% as of September 30, 2016 and up from
6.5% sequentially.
- Effective this month, the Company will
discontinue originating auto loans, while it will continue to own
and service the remaining loans in its auto portfolio. The Company
expects minimal impact to net income, as reductions in revenue will
be offset by expense savings and growth in the Company’s core
business.
“Despite the impact of the hurricanes, our third quarter
performance drivers remained strong,” said Peter R. Knitzer,
President and Chief Executive Officer of Regional Management. “We
continued to generate year-over-year double-digit growth on our top
line and in our finance receivables, with our credit performance,
excluding the impact from the hurricanes, also improving. While our
bottom line was clearly affected by the impact of the hurricanes,
the additional $3.0 million allowance we took in the quarter should
encompass any future net credit loss impact. Most importantly, we
took great care to assist our customers in need and the hurricanes
should have no impact on our overall business results and strategic
plans for 2018 and beyond.”
“In addition, we announced today that we are discontinuing auto
loan originations, further prioritizing our focus on the growth of
our core small and large loan portfolios,” added Mr. Knitzer.
“Finally, we successfully converted our branches in Texas to our
new operating platform and now have 80% of our accounts on the new
system. Overall, we continue to steadily progress in terms of our
core loan strategy and infrastructure build, and we remain well
positioned to deliver long-term shareholder value.”
Third Quarter 2017 Results
Finance receivables outstanding at September 30, 2017 were
$774.9 million, an 11.3% increase from $696.1 million in the prior
year. Finance receivables increased primarily due to an increase in
both the core small and large loan portfolios.
For the third quarter ended September 30, 2017, the Company
reported total revenue of $69.2 million, a 10.8% increase from
$62.5 million in the prior-year period. Interest and fee income for
the third quarter of 2017 was $63.6 million, a 10.8% increase from
$57.4 million in the prior-year period, primarily due to an
increase in the small and large loan portfolios compared to the
prior-year period. Insurance income, net for the third quarter of
2017 was $3.1 million, a 31.9% increase from the prior-year period,
primarily attributable to a transition in insurance carriers,
causing some of the Company’s insurance claims to impact net credit
losses instead of insurance income. This line swing had no impact
on net income. Other income for the third quarter of 2017 was $2.5
million, an 8.3% decrease from the prior-year period, primarily the
result of waiving extension and late fees for customers in
hurricane-affected areas.
The provision for credit losses in the third quarter of 2017 was
$20.2 million, compared to $16.4 million in the prior-year period.
The increase was primarily due to an incremental $3.0 million of
provision for credit losses associated with the impact of the
hurricanes, higher net credit losses, and the temporary shift of
$0.6 million in insurance claims expense, partially offset by
proceeds of $1.0 million from the bulk sale.
Net credit losses were $14.8 million in the third quarter of
2017, an increase of $1.2 million over the prior-year period,
consistent with portfolio growth. Net credit losses for the third
quarter of 2017 included $1.0 million of losses attributable to the
temporary shift of certain insurance claims expense into net credit
losses during a transition in the Company’s insurance provider.
Annualized net credit losses as a percentage of average finance
receivables in the third quarter of 2017 were 7.8% (inclusive of
0.5% attributable to the shift in insurance claims expense noted
above and a 0.5% reduction due to the bulk sale), an improvement
from 8.0% in the prior-year period.
General and administrative expenses for the third quarter of
2017 were $33.8 million, an increase of 11.1%, or $3.4 million,
from the prior-year period. General and administrative expenses for
both the third quarters of 2017 and 2016 included $0.4 million of
loan system conversion costs. Sequentially, general and
administrative expenses increased $2.2 million, or 6.9%, from the
second quarter of 2017, primarily from personnel cost increases due
to seasonal increases in bonuses, increases in average wages,
staffing related to growth, accelerated implementation of
centralized collections, and a $0.5 million increase in marketing
spend.
Interest expense was $6.7 million in the third quarter of 2017,
compared to $5.1 million in the prior-year period. The increase in
interest expense was due to higher long-term debt amounts
outstanding from finance receivable growth, a federal funds rate
increase, larger unused lines of credit, and incremental debt
issuance costs associated with upsizing the senior revolving credit
facility and entering into the new warehouse credit facility. The
Company’s diversified sources of funding continue to position it
for long-term growth.
Net income for the third quarter of 2017 was $5.3 million, a
decrease from $6.5 million in the prior-year period. Diluted
earnings per share for the third quarter of 2017 were $0.45, a
decrease from $0.56 in the prior-year period.
Nine Months 2017 Results
For the nine months ended September 30, 2017, the Company
reported total revenue of $200.4 million, a 13.5% increase from
$176.5 million in the prior-year period. Interest and fee income
for the nine months ended September 30, 2017 was $182.7 million, a
13.2% increase from $161.3 million in the prior-year period,
primarily due to an increase in the portfolios of both small and
large installment loans compared to the prior-year period.
Insurance income, net for the nine months ended September 30, 2017
was $10.0 million, a 26.6% increase from the prior-year period, in
part attributable to the temporary shift of certain claims expense
into provision for credit losses during the Company’s transition to
a new insurance provider. Other income for the nine months ended
September 30, 2017 was $7.7 million, a 5.6% increase from the
prior-year period.
The provision for credit losses for the nine months ended
September 30, 2017 was $57.9 million, compared to $43.6 million in
the prior-year period. Net credit losses for the nine months ended
September 30, 2017 were $51.7 million, compared to $41.9 million in
the prior-year period. Net credit losses for the current-year
period included $3.6 million of losses attributable to a temporary
shift of certain insurance claims expense into net credit losses
during a transition in the Company’s insurance provider. Annualized
net credit losses as a percentage of average finance receivables
for the nine months ended September 30, 2017 were 9.5% (inclusive
of 0.7% attributable to the shift in insurance claims expense noted
above and a 0.2% reduction due to the bulk sale), an increase from
8.7% in the prior-year period.
General and administrative expenses for the nine months ended
September 30, 2017 were $96.9 million, an increase of $7.1 million,
or 7.9%, from $89.8 million in the prior-year period. Included in
the nine months 2017 and 2016 results were $1.2 million and $1.4
million in loan system conversion costs, respectively.
Net income for the nine months ended September 30, 2017 was
$19.1 million, an 8.6% increase compared to net income of $17.6
million in the prior-year period. Diluted earnings per share for
the nine months ended September 30, 2017 was $1.62 compared to
$1.44 in the prior-year period.
De Novo Outlook
As of September 30, 2017, the Company’s branch network consisted
of 344 locations. To improve network efficiency, Regional
Management closed three branches in the third quarter of 2017 and
plans to close three additional branches in the fourth quarter. The
Company opened nine de novo branches as of September 30, 2017, and
opened a tenth branch earlier this month, thus completing its de
novo program for the year. For 2018, the Company expects to
reaccelerate its de novo branch openings.
Liquidity and Capital Resources
As of September 30, 2017, the Company had finance receivables of
$774.9 million and outstanding long-term debt of $538.4 million
(consisting of $461.0 million of long-term debt on its $638.0
million senior revolving credit facility, $55.8 million of
long-term debt on its $125.0 million revolving warehouse credit
facility, and $21.6 million of long-term debt on its $75.7 million
amortizing loan).
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 Management’s website prior to the earnings call at
www.RegionalManagement.com. ***
In addition, a live webcast of the conference call will also be
available on Regional Management’s website at
www.RegionalManagement.com.
A replay will be available following the end of the call through
Wednesday, November 15, 2017, by telephone at (844) 512-2921
(toll-free) or (412) 317-6671 (international), passcode 10003790. A
webcast replay of the call will be available at
http://www.RegionalManagement.com for one year following the
call.
Forward-Looking Statements
This press release may contain various “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995, which represent Regional Management Corp.’s
expectations or beliefs concerning future events. 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 are
about matters that are inherently subject to risks and
uncertainties, many of which are outside of the control of Regional
Management. Factors that could cause actual results or performance
to differ from the expectations expressed or implied in such
forward-looking statements include, but are not limited to, the
following: changes in general economic conditions, including levels
of unemployment and bankruptcies; risks associated with Regional
Management’s transition to a new loan origination and servicing
software system; risks related to opening new branches, including
the ability or inability to open new branches as planned; risks
inherent in making loans, including repayment risks and value of
collateral, which risks may increase in light of adverse or
recessionary economic conditions; 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; 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 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. Such factors and others are discussed
in greater detail in Regional Management’s filings with the
Securities and Exchange Commission. Regional Management will not
update the information contained in this press release beyond the
publication date, except to the extent required by law, and is not
responsible for changes made to this document by wire services or
Internet services.
About Regional Management Corp.
Regional Management Corp. (NYSE:RM) is a diversified consumer
finance company providing a broad array of loan products primarily
to customers with limited access to consumer credit from banks,
thrifts, credit card companies, and other traditional lenders.
Regional Management began operations in 1987 with four branches in
South Carolina and has since expanded its branch network across
South Carolina, Texas, North Carolina, Tennessee, Alabama,
Oklahoma, New Mexico, Georgia, and Virginia. Each of its loan
products is structured on a fixed rate, fixed term basis with fully
amortizing equal monthly installment payments and is repayable at
any time without penalty. Regional Management’s loans are sourced
through its multiple channel platform, including in its branches,
through direct mail campaigns, independent and franchise automobile
dealerships, online credit application networks, retailers, and its
consumer website. For more information, please visit
www.RegionalManagement.com.
Regional Management Corp. and
Subsidiaries
Consolidated Statements of
Income
(Unaudited)
(in thousands, except per share
amounts)
Better (Worse)
Better (Worse) 3Q 17 3Q 16 $
% YTD 17 YTD 16 $
% Revenue Interest and fee income $ 63,615 $ 57,420 $ 6,195
10.8 % $ 182,657 $ 161,309 $ 21,348 13.2 % Insurance income, net
3,095 2,346 749 31.9 % 9,985 7,886 2,099 26.6 % Other income
2,484 2,709 (225 ) (8.3 ) %
7,710 7,302 408 5.6 % Total
revenue 69,194 62,475 6,719
10.8 % 200,352 176,497
23,855 13.5 % Expenses Provision for credit losses
20,152 16,410 (3,742 ) (22.8 ) % 57,875 43,587 (14,288 ) (32.8 ) %
Personnel 19,534 18,180 (1,354 ) (7.4 ) % 56,089 51,981
(4,108 ) (7.9 ) % Occupancy 5,480 5,175 (305 ) (5.9 ) % 16,184
14,808 (1,376 ) (9.3 ) % Marketing 2,303 1,786 (517 ) (28.9 ) %
5,287 5,363 76 1.4 % Other 6,523 5,312
(1,211 ) (22.8 ) % 19,376 17,654
(1,722 ) (9.8 ) % Total general and administrative 33,840
30,453 (3,387 ) (11.1 ) % 96,936 89,806 (7,130 ) (7.9 ) %
Interest expense 6,658 5,116
(1,542 ) (30.1 ) % 17,092 14,637
(2,455 ) (16.8 ) % Income before income taxes 8,544 10,496 (1,952 )
(18.6 ) % 28,449 28,467 (18 ) (0.1 ) % Income taxes 3,235
4,020 785 19.5 % 9,371
10,903 1,532 14.1 % Net income $
5,309 $ 6,476 $ (1,167 ) (18.0 ) % $ 19,078 $
17,564 $ 1,514 8.6 % Net income per common share:
Basic $ 0.46 $ 0.57 $ (0.11 ) (19.3 ) % $ 1.65
$ 1.47 $ 0.18 12.2 % Diluted $ 0.45 $ 0.56
$ (0.11 ) (19.6 ) % $ 1.62 $ 1.44 $ 0.18
12.5 % Weighted-average shares outstanding: Basic
11,563 11,384 (179 ) (1.6 ) %
11,537 11,963 426 3.6 % Diluted
11,812 11,664 (148 ) (1.3 ) %
11,752 12,194 442 3.6 %
Return on average assets (annualized) 2.8 %
3.9 % 3.5 % 3.7 % Return on average
equity (annualized) 9.4 % 13.2 % 11.7 %
11.7 %
Regional Management Corp. and
Subsidiaries
Consolidated Balance Sheets
(Unaudited)
(in thousands, except par value
amounts)
Increase (Decrease) 3Q 17
3Q 16 $ % Assets Cash $ 5,191 $
3,959 $ 1,232 31.1 % Gross finance receivables 1,002,630 887,316
115,314 13.0 % Unearned finance charges and insurance premiums
(227,774 ) (191,167 ) (36,607 ) (19.1 ) %
Finance receivables 774,856 696,149 78,707 11.3 % Allowance for
credit losses (47,400 ) (39,100 ) (8,300 )
(21.2 ) % Net finance receivables 727,456 657,049 70,407 10.7 %
Property and equipment 12,657 10,701 1,956 18.3 % Restricted cash
13,849 7,906 5,943 75.2 % Intangible assets 10,239 5,324 4,915 92.3
% Deferred tax asset 5,121 — 5,121 100.0 % Other assets
5,337 6,390 (1,053 ) (16.5 ) %
Total
assets $ 779,850 $ 691,329 $ 88,521 12.8 %
Liabilities and Stockholders’ Equity Liabilities:
Long-term debt $ 538,351 $ 481,766 $ 56,585 11.7 % Unamortized debt
issuance costs (5,266 ) (2,403 ) (2,863 )
(119.1 ) % Net long-term debt 533,085 479,363 53,722 11.2 %
Accounts payable and accrued expenses 18,950 11,436 7,514 65.7 %
Deferred tax liability — 432
(432 ) (100.0 )% Total liabilities 552,035 491,231 60,804 12.4 %
Commitments and Contingencies 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, 13,213 shares issued and 11,667 shares
outstanding at September 30, 2017 and 12,984 shares issued and
11,438 shares outstanding at September 30, 2016) 1,321 1,298 23 1.8
% Additional paid-in-capital 93,673 91,524 2,149 2.3 % Retained
earnings 157,867 132,322 25,545 19.3 % Treasury stock (1,546 shares
at September 30, 2017 and 2016) (25,046 ) (25,046 )
— 0.0 % Total stockholders’ equity 227,815
200,098 27,717 13.9 %
Total
liabilities and stockholders’ equity $ 779,850 $ 691,329
$ 88,521 12.8 %
Regional Management Corp. and
Subsidiaries
Selected Financial Data
(Unaudited)
(in thousands, except per share
amounts)
Averages and Yields 3Q 17 2Q
17 3Q 16
Average Finance
Average Yield
Average Finance
Average Yield
Average Finance
Average Yield
Receivables
(Annualized)
Receivables
(Annualized)
Receivables
(Annualized)
Small loans
$
358,380
42.7 %
$
341,184
42.9 %
$
337,674
43.3 % Large loans 288,684 29.0 % 253,049 29.0 % 206,437 29.0 %
Automobile loans 75,984 16.2 % 83,082 16.5 % 99,113 17.8 % Retail
loans 30,788 17.8 % 30,486 19.1 %
31,317 19.4 % Total interest and fee yield $ 753,836
33.8 % $ 707,801 33.8 % $ 674,541 34.0 % Total
revenue yield $ 753,836 36.7 % $ 707,801 36.9 % $
674,541 37.0 %
Components of Increase in Interest and
Fee Income
3Q 17 Compared to 3Q 16
Increase (Decrease)
Volume Rate Volume & Rate
Net Small loans $ 2,239 $ (466 ) $ (29 ) $ 1,744
Large loans 5,971 (29 ) (12 ) 5,930 Automobile loans (1,027 ) (393
) 92 (1,328 ) Retail loans (26 ) (127 ) 2 (151 ) Product mix
(407 ) 518 (111 ) — Total
increase in interest and fee income $ 6,750 $ (497 ) $ (58 )
$ 6,195
Net Loans Originated (1)
QoQ $
QoQ %
YoY $
YoY %
3Q 17 2Q 17
Inc (Dec)
Inc (Dec)
3Q 16
Inc (Dec)
Inc (Dec)
Small loans $
148,820
$ 160,380 $ (11,560 ) (7.2 ) % $
160,642
$ (11,822 ) (7.4 ) % Large loans 105,460 86,771 18,689 21.5 %
62,846 42,614 67.8 % Automobile loans 3,787 5,828 (2,041 ) (35.0 )
% 11,099 (7,312 ) (65.9 ) % Retail loans 7,905
6,353 1,552 24.4 % 9,258 (1,353
) (14.6 ) % Total net loans originated $ 265,972 $ 259,332 $
6,640 2.6 % $ 243,845 $ 22,127 9.1 %
(1) Represents the balance of loan
origination and refinancing net of unearned finance charges
Other Key Metrics 3Q 17 2Q
17 3Q 16 Net credit losses $ 14,752 $ 17,589 $
13,510 Percentage of average finance receivables (annualized) 7.8 %
9.9 % 8.0 %
Provision for credit losses (1)
$ 20,152 $ 18,589 $ 16,410 Percentage of average finance
receivables (annualized) 10.7 % 10.5 % 9.7 % Percentage of total
revenue 29.1 % 28.5 % 26.3 % General and administrative
expenses $ 33,840 $ 31,642 $ 30,453 Percentage of average finance
receivables (annualized) 18.0 % 17.9 % 18.1 % Percentage of total
revenue 48.9 % 48.4 % 48.7 % Same store results: Finance
receivables at period-end $ 768,794 $ 723,547 $ 657,764 Finance
receivable growth rate 10.4 % 12.0 % 12.3 % Number of branches in
calculation 333 336 315
(1) Includes $3,000 for incremental
hurricane allowance for credit losses in 3Q 17
Finance Receivables by Product
QoQ $
QoQ %
YoY $
YoY %
3Q 17 2Q 17
Inc (Dec)
Inc (Dec)
3Q 16
Inc (Dec)
Inc (Dec)
Small loans $
363,262
$
348,742
$ 14,520 4.2 % $
349,390
$ 13,872 4.0 % Large loans 308,642 267,921
40,721 15.2 % 217,102
91,540 42.2 % Total core loans 671,904 616,663 55,241 9.0 %
566,492 105,412 18.6 % Automobile loans 71,666 79,861 (8,195 )
(10.3 ) % 97,141 (25,475 ) (26.2 ) % Retail loans 31,286
30,243 1,043 3.4 % 32,516
(1,230 ) (3.8 ) % Total finance receivables $ 774,856
$ 726,767 $ 48,089 6.6 % $ 696,149 $
78,707 11.3 % Number of branches at period end 344
347 (3 ) (0.9 ) % 338 6 1.8 % Average finance receivables per
branch $ 2,252 $ 2,094 $ 158 7.5 % $ 2,060
$ 192 9.3 %
Contractual Delinquency
by Aging 3Q 17 2Q 17 3Q 16
Allowance for credit losses (1)
$
47,400
6.1 % $
42,000
5.8 % $
39,100
5.6 % Current 638,696 82.5 % 599,344 82.5 % 569,412
81.8 % 1 to 29 days past due 83,230 10.7 %
80,064 11.0 % 77,097 11.1 % Delinquent
accounts: 30 to 59 days 18,621 2.4 % 17,018 2.3 % 17,323 2.4 % 60
to 89 days 11,631 1.5 % 10,726 1.5 % 10,966 1.6 % 90 to 119 days
9,653 1.2 % 7,793 1.0 % 8,363 1.3 % 120 to 149 days 6,799 0.9 %
6,302 0.9 % 7,215 1.0 % 150 to 179 days 6,226 0.8 %
5,520 0.8 % 5,773 0.8 % Total
contractual delinquency $ 52,930 6.8 % $ 47,359 6.5 %
$ 49,640 7.1 % Total finance receivables $ 774,856
100.0 % $ 726,767 100.0 % $ 696,149 100.0 %
1 day and over past due $ 136,160 17.5 % $
127,423 17.5 % $ 126,737 18.2 %
(1) Includes $3,000 for incremental
hurricane allowance for credit losses in 3Q 17
Contractual Delinquency by Product 3Q
17 2Q 17 3Q 16 Small loans
$
30,328
8.3 %
$
26,610
7.6 %
$
30,169
8.6 % Large loans 15,578 5.0 % 13,839 5.2 %
10,142 4.7 % Automobile loans 5,280 7.4 % 5,172 6.5 % 7,459 7.7 %
Retail loans 1,744 5.6 % 1,738
5.7 % 1,870 5.8 % Total contractual
delinquency $ 52,930 6.8 % $ 47,359 6.5
% $ 49,640 7.1 %
Quarterly Trend
QoQ $
YoY $
3Q 16 4Q 16 1Q 17 2Q 17 3Q 17
B(W)
B(W)
Revenue Interest and fee income $
57,420
$
59,654
$
59,255
$
59,787
$
63,615
$ 3,828 $ 6,195 Insurance income, net 2,346 1,570 3,805 3,085 3,095
10 749 Other income 2,709 2,797
2,760 2,466 2,484 18
(225 ) Total revenue 62,475
64,021 65,820 65,338
69,194 3,856 6,719
Expenses Provision for credit losses 16,410 19,427 19,134 18,589
20,152 (1,563 ) (3,742 ) Personnel 18,180 16,998 18,168
18,387 19,534 (1,147 ) (1,354 ) Occupancy 5,175 5,251 5,285 5,419
5,480 (61 ) (305 ) Marketing 1,786 1,474 1,205 1,779 2,303 (524 )
(517 ) Other 5,312 5,103 6,796
6,057 6,523 (466 )
(1,211 ) Total general and administrative 30,453 28,826 31,454
31,642 33,840 (2,198 ) (3,387 ) Interest expense
5,116 5,287 5,213 5,221
6,658 (1,437 ) (1,542 )
Income before income taxes 10,496 10,481 10,019 9,886 8,544 (1,342
) (1,952 ) Income taxes 4,020 4,014
2,385 3,751 3,235
516 785 Net income $ 6,476 $ 6,467
$ 7,634 $ 6,135 $ 5,309 $ (826 ) $
(1,167 ) Net income per common share: Basic $ 0.57 $ 0.57
$ 0.66 $ 0.53 $ 0.46 $ (0.07 ) $ (0.11
) Diluted $ 0.56 $ 0.55 $ 0.65 $ 0.52 $
0.45 $ (0.07 ) $ (0.11 ) Weighted-average shares
outstanding: Basic 11,384 11,408
11,494 11,554 11,563 (9 )
(179 ) Diluted 11,664 11,763
11,715 11,730 11,812
(82 ) (148 ) Net interest margin $
57,359 $ 58,734 $ 60,607 $ 60,117 $
62,536 $ 2,419 $ 5,177 Net credit margin $
40,949 $ 39,307 $ 41,473 $ 41,528 $
42,384 $ 856 $ 1,435
QoQ $
YoY $
3Q 16 4Q 16 1Q 17 2Q 17 3Q 17
Inc (Dec)
Inc (Dec)
Total assets $ 691,329 $ 712,224 $ 690,432 $
727,533 $ 779,850 $ 52,317 $ 88,521
Finance receivables $ 696,149 $ 717,775 $ 695,004
$ 726,767 $ 774,856 $ 48,089 $ 78,707
Allowance for credit losses $ 39,100 $ 41,250
$ 41,000 $ 42,000 $ 47,400 $ 5,400 $
8,300 Long-term debt $ 481,766 $ 491,678 $
462,994 $ 497,049 $ 538,351 $ 41,302 $
56,585
General & Administrative
Expenses Trend
QoQ $
YoY $
3Q 16 4Q 16 1Q 17 2Q 17 3Q 17
B(W)
B(W)
Legacy operations expenses
$
19,596
$
19,238
$
20,497
$
19,208
$
20,591
$ (1,383 ) $ (995 ) 2017 new branch expenses
276 499 676 (177 )
(676 ) Total operations expenses 19,596 19,238 20,773 19,707
21,267 (1,560 ) (1,671 ) Marketing expenses 1,786 1,474 1,205 1,779
2,303 (524 ) (517 ) Home office expenses 9,071
8,114 9,476 10,156 10,270
(114 ) (1,199 ) Total G&A expenses $
30,453 $ 28,826 $ 31,454 $ 31,642 $
33,840 $ (2,198 ) $ (3,387 )
Averages and
Yields YTD 17 YTD 16
Average Finance
Average Yield
Average Finance
Average Yield
Receivables
(Annualized)
Receivables
(Annualized)
Small loans
$
351,204
42.4 %
$
327,626
42.5 % Large loans 261,277 28.8 % 179,508 28.7 % Automobile loans
82,313 16.4 % 104,797 17.9 % Retail loans 31,389 18.4
% 29,464 19.2 % Total interest and fee yield $
726,183 33.5 % $ 641,395 33.5 % Total revenue yield $
726,183 36.8 % $ 641,395 36.7 %
Components of Increase in Interest and
Fee Income
YTD 17 Compared to YTD 16
Increase (Decrease)
Volume Rate Volume & Rate
Net Small loans $ 7,508 $ (68 ) $ (4 ) $ 7,436 Large
loans 17,598 112 51 17,761 Automobile loans (3,025 ) (1,174 ) 252
(3,947 ) Retail loans 277 (168 ) (11 ) 98 Product mix (1,034
) 1,319 (285 ) — Total increase
in interest and fee income $ 21,324 $ 21 $ 3 $
21,348
Net Loans Originated (1)
YTD $
YTD %
YTD 17 YTD 16
Inc (Dec)
Inc (Dec)
Small loans
$
424,559
$
428,068
$ (3,509 ) (0.8 ) % Large loans 249,251 183,589 65,662 35.8 %
Automobile loans 18,404 28,939 (10,535 ) (36.4 )% Retail loans
20,522 26,586 (6,064 ) (22.8 ) %
Total net loans originated $ 712,736 $ 667,182 $
45,554 6.8 %
(1) Represents the balance of loan
origination and refinancing net of unearned finance charges
Other Key Metrics YTD 17 YTD
16 Net credit losses $ 51,725 $ 41,939 Percentage of average
finance receivables (annualized) 9.5 % 8.7 %
Provision for credit losses (1)
$ 57,875 $ 43,587 Percentage of average finance receivables
(annualized) 10.6 % 9.1 % Percentage of total revenue 28.9 % 24.7 %
General and administrative expenses $ 96,936 $ 89,806
Percentage of average finance receivables (annualized) 17.8 % 18.7
% Percentage of total revenue 48.4 % 50.9 %
(1) Includes $3,000 for incremental hurricane allowance for
credit losses in 3Q 17
View source
version on businesswire.com: http://www.businesswire.com/news/home/20171108006380/en/
Investor RelationsRegional Management Corp.Garrett Edson,
203-682-8331
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