Regional Management Corp. announces first quarter 2021 results

May 5, 2021

– Record net income of $25.5 million and diluted earnings per share of $2.31 –

– Core net finance receivables and total revenue each grew 1.7% year-over-year –

– Historically low 30+ day contractual delinquencies of 4.3% as of March 31, 2021 –

– Raises quarterly cash dividend by 25% to $0.25 per common share and announces a new $30 million stock repurchase program –

GREENVILLE, SC – Regional Management Corp. (NYSE: RM), a diversified consumer finance company, announced results for the first quarter ended March 31, 2021.

“We had a fantastic start to 2021, as we built off of our strong performance from the prior year to generate record quarterly earnings,” said Robert W. Beck, President and Chief Executive Officer of Regional Management Corp. “Our growth initiatives helped to reduce our typical first quarter seasonal liquidation and the impact of the new stimulus payments, which in turn drove strong revenue performance. At the same time, we maintained a superior credit profile and historically low 30+ day delinquencies, allowing us to release over $10 million of our allowance for credit losses, including more than $6 million of COVID-19 reserves. In addition, we continued to prudently manage our expenses while also investing in our digital initiatives and growth strategies, positioning us well to expand our portfolio through the remainder of 2021 and beyond.”

“We have maintained our momentum going into the second quarter, having recently extended our operations to Illinois and strengthened our balance sheet by expanding our warehouse facility capacity, further enabling us to fund our long-term growth strategy and to return excess capital to shareholders,” added Mr. Beck. “To that end, we are very pleased to announce an increase of our quarterly dividend by 25% to $0.25 per share, the completion of our $30 million stock repurchase program that began in the fourth quarter, and the authorization by our Board of Directors of a new $30 million stock repurchase program. Moving ahead, we are focused on maintaining our strong credit profile and executing on our omni-channel growth strategies, which include investment in geographic expansion, digital innovation, and the development of new products and channels. We continue to be well-positioned to further expand our market share and to deliver additional long-term value to our shareholders.”

First Quarter 2021 Highlights

  • Net income for the first quarter of 2021 was $25.5 million and diluted earnings per share was $2.31, compared to net loss of $6.3 million and diluted loss per share of $0.56 in the prior-year period.
  • Net finance receivables as of March 31, 2021 were $1.1 billion, an increase of 0.3%, or $3.3 million, from the prior-year period.
    • Total core small and large loan net finance receivables increased $17.8 million, or 1.7%, compared to the prior-year period.
    • Large loan net finance receivables of $719.4 million increased $86.8 million, or 13.7%, from the prior-year period and represented 65.1% of the total loan portfolio. Small loan net finance receivables were $371.2 million, a decrease of 15.7% from the prior-year period.
    • Originated $231.4 million of loans in the first quarter of 2021, an increase of $2.2 million, or 0.9%, from the prior-year period.
  • Total revenue for the first quarter of 2021 was $97.7 million, an increase of $1.7 million, or 1.7%, from the prior-year period.
    • Interest and fee income increased $0.3 million, or 0.3%, primarily due to improved credit performance across the portfolio, which resulted in fewer loans in non-accrual status and fewer interest accrual reversals. These benefits were partially offset by the intended product mix shift toward large loans and the portfolio composition shift toward higher credit quality customers with slightly lower interest rates due to enhanced credit standards during the pandemic.
    • Insurance income, net increased $2.0 million, or 34.2%, driven by an increase in premium revenue and a decrease in unemployment insurance expense due to COVID-19 reserves taken in the prior-year period. These benefits were offset by higher life insurance claims.
    • Other income decreased $0.7 million, or 21.1%, driven by lower late fees on low delinquency levels.
  • Provision for credit losses for the first quarter of 2021 was $11.4 million, a decrease of $38.2 million, or 77.1%, from the prior-year period. The provision for credit losses for the first quarter of 2021 included releases in the allowance for credit losses of $6.6 million related to the expected economic impact of the COVID-19 pandemic and $3.8 million related to portfolio liquidation.
    • Allowance for credit losses was $139.6 million as of March 31, 2021, including a $23.8 million allowance for credit losses associated with COVID-19. The company’s macroeconomic model assumes an unemployment rate under 10% at the end of 2021.
  • Annualized net credit losses as a percentage of average net finance receivables for the first quarter of 2021 were 7.7%, a 280 basis point improvement compared to 10.5% in the prior-year period.
  • As of March 31, 2021, 30+ day contractual delinquencies totaled $47.7 million, or 4.3% of net finance receivables, compared to 6.6% in the prior-year period. As of April 30, 2021, 30+ day contractual delinquencies further improved to $41.0 million, or 3.7% of net finance receivables. As of March 31, 2021, approximately 70% of the company’s total portfolio had been originated since April 2020, the vast majority of which was subject to enhanced credit standards deployed following the outset of the pandemic.
  • General and administrative expenses for the first quarter of 2021 were $45.8 million, an improvement of $0.4 million, or 0.9%, from the prior-year period, primarily driven by reductions in executive transition costs and operating costs related to COVID-19, partially offset by an increase in personnel expenses, marketing expenses, and investment in digital and technological capabilities to support the company’s growth initiatives.
  • The operating expense ratio (annualized general and administrative expenses as a percentage of average net finance receivables) for the first quarter of 2021 was 16.3%, an improvement of 20 basis points compared to the prior-year period.
  • As of March 31, 2021, the company had total unused capacity on its revolving credit facilities of $573 million, subject to the borrowing base, and available liquidity of $207 million, including unrestricted cash on hand and immediate availability to draw down cash from its revolving credit facilities.
  • In the first quarter of 2021, the company repurchased 352,183 shares of its common stock at a weighted-average price of $33.57 per share under the company’s $30 million stock repurchase program. The company completed the $30 million stock repurchase program in May 2021, having repurchased 951,841 shares of its common stock at a weighted-average price of $31.52 per share.

Second Quarter 2021 Dividend and New Stock Repurchase Program

The company’s Board of Directors has declared a dividend of $0.25 per common share for the second quarter of 2021. The dividend is 25% higher than the prior quarter’s dividend and will be paid on June 15, 2021 to shareholders of record as of the close of business on May 26, 2021.

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.

In addition, the company’s Board of Directors has authorized a new stock repurchase program allowing for the repurchase of up to $30 million of its outstanding common stock. The authorization is effective immediately and will continue through April 29, 2023.

Share repurchases under the stock repurchase program may be made in the open market at prevailing market prices, through privately negotiated transactions, or through other structures in accordance with applicable federal securities laws, at times and in amounts as management deems appropriate. The timing and the amount of any common stock repurchases will be determined by the company’s management based on its evaluation of market conditions, the company’s liquidity needs, legal and contractual requirements and restrictions (including covenants in the company’s credit agreements), share price, and other factors. Repurchases of common stock may be made under a Rule 10b5-1 plan, which would permit common stock to be repurchased when the company might otherwise be precluded from doing so under insider trading laws. The repurchase program does not obligate the company to purchase any particular number of shares and may be suspended, modified, or discontinued at any time without prior notice.

Liquidity and Capital Resources

As of March 31, 2021, the company had net finance receivables of $1.1 billion and outstanding long-term debt of $752.2 million ($750.6 million of outstanding debt and $1.6 million of interest payable), consisting of:

  • $156.5 million on its $640.0 million senior revolving credit facility,
  • $36.4 million on its $125.0 million revolving warehouse credit facility, and
  • $559.3 million through its asset-backed securitizations.

The company’s unused capacity on its revolving credit facilities (subject to the borrowing base) was $573 million, or 74.9%, as of March 31, 2021.

The company had a funded debt-to-equity ratio of 2.7 to 1.0 and a stockholders’ equity ratio of 25.8%, each as of March 31, 2021. On a non-GAAP basis, the company had a funded debt-to-tangible equity ratio of 2.7 to 1.0, as of March 31, 2021. Please refer to the reconciliations of non-GAAP measures to comparable GAAP measures included at the end of this press release.

Branch Network

As of March 31, 2021, the company’s branch network consisted of 365 locations, and in April 2021, the company opened its first branch in Illinois. The company continues to expect to open 15 to 20 net new branches during the full year 2021, subject to the economic environment.



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 366 branch locations across 12 states in the Southeastern, Southwestern, Mid-Atlantic, and Midwestern United States, as of April 2021. 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