Material Reduction in Early-Stage and Overall Delinquencies
Sequentially and from Prior-Year Period
GREENVILLE, S.C.--(BUSINESS WIRE)--Mar. 9, 2015--
Regional Management Corp. (NYSE:RM), a diversified specialty consumer
finance company, today announced results for the fourth quarter and full
year periods ended December 31, 2014.
Fourth Quarter 2014 Highlights and Subsequent Events
-
Total fourth quarter 2014 revenue was $53.8 million, a 10.8% increase
from the prior-year period. Same-store1 revenue growth for
the fourth quarter of 2014 was 4.8%.
-
Early-stage delinquencies (defined as accounts delinquent fewer than
60 days) as a percentage of total finance receivables as of December
31, 2014 were 18.0%, compared to 20.2% as of December 31, 2013 and
21.7% as of September 30, 2014.
-
Total delinquencies as a percentage of total finance receivables as of
December 31, 2014 were 22.6%, compared to 25.1% as of December 31,
2013 and 25.5% as of September 30, 2014.
-
Regional Management’s most important loan categories continue to grow:
-
Branch small loan and convenience check finance receivables,
collectively, as of December 31, 2014 increased 2.9% compared to
September 30, 2014 and 10.6% compared to December 31, 2013.
-
Large loan finance receivables as of December 31, 2014 increased 9.4%
compared to September 30, 2014.
-
Total finance receivables as of December 31, 2014 were $546.2 million,
an increase of 0.3% from the prior-year. Same-store finance
receivables for the fourth quarter of 2014 declined 6.0%.
-
Net income for the fourth quarter of 2014 was $3.4 million, a 59.7%
decrease from the prior-year period. Diluted earnings per share were
$0.26 based on a diluted share count of 13.0 million. Excluding
one-time separation costs of $1.2 million and one-time loan system
implementation costs of $0.3 million in the fourth quarter of 2014,
non-GAAP diluted earnings per share for the fourth quarter were $0.33.
-
Annualized net charge-offs as a percentage of average finance
receivables for the fourth quarter of 2014 were 13.9%, an increase
from 7.8% in the prior-year period. Provision for credit losses for
the fourth quarter of 2014 was 29.7% of revenue, an increase from
24.0% in the prior-year period.
-
Regional Management opened four new branches in the fourth quarter of
2014. As of December 31, 2014, Regional Management’s branch network
consisted of 300 locations.
-
In January 2015, Regional Management announced the appointment of
Daniel J. Taggart as Chief Risk Officer.
“We have made significant progress over the last few months in terms of
improving the credit quality of our portfolio – from solicitation and
origination through delinquency and collection,” said Michael R. Dunn,
Chief Executive Officer of Regional Management Corp. “Our early-stage
and overall delinquency levels declined significantly compared to
September 30, 2014, as the lower credit quality convenience check loans
we originated in the second and third quarters were either charged off
or replaced by higher quality loans originated in the fourth quarter. We
also strengthened our leadership team in January with the hiring of Dan
Taggart as our Chief Risk Officer, and he has already implemented
initiatives that will help us to continue to improve the credit quality
of our portfolio as we move forward.”
“In terms of our revenue and portfolio growth, we made solid progress in
the quarter by growing our small and large loan portfolios, which are
our most important loan categories and which we expect to be core
drivers of our future strategy,” continued Mr. Dunn. “While we expect
some lingering effects from 2014 will continue to impact the first
quarter of 2015, we believe we have incorporated the risk of our prior
issues into our 2014 financials.”
Fourth Quarter 2014 Results
For the fourth quarter ended December 31, 2014, Regional Management
reported total revenue of $53.8 million, a 10.8% increase from $48.5
million in the prior-year period. Interest and fee income for the fourth
quarter of 2014 was $49.0 million, a 12.1% increase from $43.7 million
in the prior-year period, primarily due to a shift in product mix toward
higher-yielding small installment loans. Insurance income for the fourth
quarter of 2014 was $2.3 million, a 21.9% decrease from the prior-year
period. Same-store revenue growth for the fourth quarter of 2014 was
4.8%.
Finance receivables outstanding at December 31, 2014 were $546.2
million, a 0.3% increase from $544.7 million in the prior-year period.
Finance receivables increased primarily due to the addition of 36 de
novo branches since December 31, 2013.
Provision for credit losses in the fourth quarter of 2014 was $16.0
million versus $11.6 million in the prior-year period. On a sequential
basis, provision for credit losses declined 29.2%, reflecting
improvements in credit quality during the fourth quarter of 2014.
Annualized net charge-offs as a percentage of average finance
receivables for the fourth quarter of 2014 were 13.9%, an increase from
7.8% in the prior-year period. Net charge-offs of $18.7 million in the
fourth quarter of 2014 exceeded the provision as the Company utilized a
portion of the additional allowance recorded at September 30, 2014.
General and administrative expenses for the fourth quarter of 2014 were
$28.4 million, an increase of 45.8% from $19.5 million in the prior-year
period, primarily related to increased personnel costs from opening an
additional 36 branches since December 31, 2013. Regional Management’s
efficiency ratio — the percentage of general and administrative expenses
compared to total revenue — was 52.8% in the fourth quarter of 2014, an
increase from 40.1% in the prior-year period. Excluding one-time CEO
separation costs of $1.2 million and one-time loan system implementation
costs of $0.3 million in the fourth quarter of 2014, Regional
Management’s efficiency ratio would have been 50.0%.
Net income for the fourth quarter of 2014 was $3.4 million, a 59.7%
decrease compared to net income of $8.4 million in the prior-year
period. Diluted earnings per share for the fourth quarter of 2014 were
$0.26, a decrease from $0.65 in the prior-year period. Excluding the
aforementioned one-time expenses, non-GAAP diluted earnings per share
for the fourth quarter were $0.33. For a reconciliation of non-GAAP
financial measures to the nearest comparable GAAP financial measure,
please refer to the reconciliation table accompanying this release.
Full Year 2014 Results
For the full year ended December 31, 2014, Regional Management reported
total revenue of $204.7 million, a 20.0% increase from $170.6 million in
the prior year. Interest and fee income for the full year ended December
31, 2014 was $184.8 million, a 21.3% increase from $152.3 million in the
prior year, primarily due to a shift in product mix toward
higher-yielding small installment loans and an increase in average
finance receivables. Insurance income for the full year ended December
31, 2014 was $10.7 million, a 6.9% decrease from the prior year.
Provision for credit losses in the full year ended December 31, 2014 was
$69.1 million versus $39.2 million in the prior year, primarily due to
branch personnel issues in the first half of 2014 combined with issues
related to the Company’s summer convenience check campaigns. GAAP net
charge-offs as a percentage of average finance receivables for the full
year ended December 31, 2014 was 11.1%, an increase from 6.9% in the
prior year. Excluding $2.1 million of one-time charge-offs for the full
year ended December 31, 2014 caused by a change in the Company’s
charge-off policy for 180 day and over delinquent loans, non-GAAP net
charge-offs as a percentage of finance receivables for the full year
ended December 31, 2014 was 10.7%.
General and administrative expenses for the full year ended December 31,
2014 were $96.8 million, an increase of 36.2% from $71.0 million in the
prior year, primarily due to increased personnel costs associated with
the 36 de novo branches opened during 2014. Regional Management’s
efficiency ratio for the full year ended December 31, 2014 was 47.3%, an
increase from 41.6% in the prior-year period. Excluding a net $1.5
million of one-time expenses, Regional Management’s efficiency ratio for
the full year ended December 31, 2014 was 46.5%.
GAAP net income for the full year ended December 31, 2014 was $14.8
million, a 48.6% decrease compared to GAAP net income of $28.8 million
in the prior year, and diluted earnings per share for the full year
ended December 31, 2014 were $1.14 compared to $2.23 in the prior year.
Excluding net one-time expenses, non-GAAP net income for the full year
ended December 31, 2014 totaled $15.8 million and non-GAAP diluted
earnings per share totaled $1.22.
2015 De Novo Outlook
As of December 31, 2014, Regional Management’s branch network consisted
of 300 locations. Regional Management has opened one de novo branch
quarter to date in 2015 and, for the full year 2015, plans to open
between 25 and 30 de novo branches.
Liquidity and Capital Resources
As of December 31, 2014, Regional Management had finance receivables of
$546.2 million and outstanding debt of $341.4 million on its $500.0
million senior revolving credit facility.
Conference Call Information
Regional Management Corp. will host a conference call and webcast today
at 4:30 PM ET to discuss these results.
The dial-in number for the conference call is (877) 474-9503 (toll free)
or (857) 244-7556 (direct), passcode 94963836. Please dial the number 10
minutes prior to the scheduled start time. A live webcast of the
conference call will also be available on Regional Management’s website
at www.RegionalManagement.com.
A replay of the call will be available through Monday, March 16th at www.RegionalManagement.com
and by phone at (888) 286-8010 (toll free) or (617) 801-6888 (direct),
passcode 22319608.
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: the continuation or worsening of adverse conditions in the
global and domestic credit markets and uncertainties regarding, or the
impact of, governmental responses to those conditions; changes in
interest rates; risks related to acquisitions and new branches; risks
inherent in making loans, including repayment risks and value of
collateral, which risks may increase in light of adverse or recessionary
economic conditions; recently-enacted or proposed legislation; 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 charge-offs); changes in Regional
Management’s markets and general changes in the economy (particularly in
the markets served by Regional Management); 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 and is
not responsible for updating the information contained in this press
release beyond the publication date, or for changes made to this
document by wire services or Internet services.
About Regional Management Corp.
Regional Management Corp. (NYSE: RM) is a diversified specialty 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 and Georgia. 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 http://www.RegionalManagement.com.
1 Defined as stores open for at least 13 months.
|
Regional Management Corp. and Subsidiaries
Consolidated Statements of Income
(in thousands, except per share amounts)
(Unaudited)
|
|
|
|
|
Three Months Ended
December 31,
|
|
Twelve Months Ended
December 31,
|
|
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
Revenue
|
|
|
|
|
|
|
|
|
Interest and fee income
|
$
|
48,960
|
|
$
|
43,668
|
|
$
|
184,786
|
|
$
|
152,343
|
|
Insurance income, net
|
|
2,261
|
|
|
2,895
|
|
|
10,673
|
|
|
11,470
|
|
Other income
|
|
2,571
|
|
|
1,979
|
|
|
9,260
|
|
|
6,816
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
53,792
|
|
|
48,542
|
|
|
204,719
|
|
|
170,629
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
Provision for credit losses
|
|
15,950
|
|
|
11,638
|
|
|
69,057
|
|
|
39,192
|
|
General and administrative expenses
|
|
|
|
|
|
|
|
|
Personnel
|
|
17,099
|
|
|
10,082
|
|
|
55,383
|
|
|
39,868
|
|
Occupancy
|
|
4,115
|
|
|
3,261
|
|
|
15,427
|
|
|
11,640
|
|
Marketing
|
|
1,842
|
|
|
1,144
|
|
|
6,330
|
|
|
3,980
|
|
Other
|
|
5,340
|
|
|
4,993
|
|
|
19,636
|
|
|
15,551
|
|
Interest expense
|
|
3,780
|
|
|
3,909
|
|
|
14,947
|
|
|
14,144
|
|
|
|
|
|
|
|
|
|
|
Total expenses
|
|
48,126
|
|
|
35,027
|
|
|
180,780
|
|
|
124,375
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
5,666
|
|
|
13,515
|
|
|
23,939
|
|
|
46,254
|
|
Income taxes
|
|
2,285
|
|
|
5,130
|
|
|
9,137
|
|
|
17,460
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
3,381
|
|
$
|
8,385
|
|
$
|
14,802
|
|
$
|
28,794
|
|
|
|
|
|
|
|
|
|
|
Net income per common share:
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.27
|
|
$
|
0.66
|
|
$
|
1.17
|
|
$
|
2.29
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
$
|
0.26
|
|
$
|
0.65
|
|
$
|
1.14
|
|
$
|
2.23
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
12,743,534
|
|
|
12,614,503
|
|
|
12,701,083
|
|
|
12,572,298
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
12,954,887
|
|
|
12,984,270
|
|
|
12,951,441
|
|
|
12,893,693
|
|
Regional Management Corp. and Subsidiaries
Consolidated Balance Sheets
December 31, 2014 and 2013
(in thousands, except per share amounts)
(Unaudited)
|
|
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
Assets
|
|
|
|
|
|
Cash
|
|
$
|
4,012
|
|
|
$
|
4,121
|
|
|
Gross finance receivables
|
|
|
663,432
|
|
|
|
658,176
|
|
|
Less unearned finance charges, insurance premiums, and commissions
|
|
|
(117,240
|
)
|
|
|
(113,492
|
)
|
|
|
|
|
|
|
|
Finance receivables
|
|
|
546,192
|
|
|
|
544,684
|
|
|
Allowance for credit losses
|
|
|
(40,511
|
)
|
|
|
(30,089
|
)
|
|
|
|
|
|
|
|
Net finance receivables
|
|
|
505,681
|
|
|
|
514,595
|
|
|
Property and equipment, net of accumulated depreciation
|
|
|
8,905
|
|
|
|
7,100
|
|
|
Deferred tax asset, net
|
|
|
1,870
|
|
|
|
—
|
|
|
Repossessed assets at net realizable value
|
|
|
556
|
|
|
|
548
|
|
|
Goodwill
|
|
|
716
|
|
|
|
716
|
|
|
Intangible assets, net
|
|
|
847
|
|
|
|
1,386
|
|
|
Other assets
|
|
|
7,683
|
|
|
|
5,422
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
530,270
|
|
|
$
|
533,888
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
Senior revolving credit facility
|
|
|
341,419
|
|
|
|
362,750
|
|
|
Accounts payable and accrued expenses
|
|
|
10,528
|
|
|
|
7,312
|
|
|
Deferred tax liability, net
|
|
$
|
—
|
|
|
$
|
2,653
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
351,947
|
|
|
|
372,715
|
|
|
Commitments and Contingencies
|
|
|
|
|
|
Stockholders’ equity:
|
|
|
|
|
|
Preferred stock, $0.10 par value, 100,000,000 shares authorized, no
shares issued or outstanding
|
|
|
—
|
|
|
|
—
|
|
|
Common stock, $0.10 par value, 1,000,000,000 shares authorized,
12,747,767 and 12,652,197 shares issued and outstanding at December
31, 2014 and 2013, respectively
|
|
|
1,275
|
|
|
|
1,265
|
|
|
Additional paid-in-capital
|
|
|
85,655
|
|
|
|
83,317
|
|
|
Retained earnings
|
|
|
91,393
|
|
|
|
76,591
|
|
|
|
|
|
|
|
|
Total stockholders’ equity
|
|
|
178,323
|
|
|
|
161,173
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders’ equity
|
|
$
|
530,270
|
|
|
$
|
533,888
|
|
|
Regional Management Corp. and Subsidiaries
Selected Financial Data
(Unaudited)
(in thousands)
|
|
|
|
|
Three Months Ended December 31,
|
|
|
2014
|
|
|
2013
|
|
|
|
Average Finance
Receivables
|
|
Average Yield
(Annualized)
|
|
Average Finance
Receivables
|
|
Average Yield
(Annualized)
|
|
Branch small loans
|
$
|
119,097
|
|
48.4
|
%
|
|
$
|
103,184
|
|
48.3
|
%
|
|
Convenience checks
|
|
192,951
|
|
46.8
|
%
|
|
|
166,251
|
|
42.8
|
%
|
|
Large loans
|
|
43,464
|
|
27.1
|
%
|
|
|
43,093
|
|
27.0
|
%
|
|
Automobile loans
|
|
159,047
|
|
19.5
|
%
|
|
|
182,317
|
|
19.9
|
%
|
|
Retail loans
|
|
26,493
|
|
18.6
|
%
|
|
|
31,407
|
|
18.4
|
%
|
|
|
|
|
|
|
|
|
|
|
Total interest and fee yield
|
$
|
541,052
|
|
36.2
|
%
|
|
$
|
526,252
|
|
33.2
|
%
|
|
|
|
|
|
|
|
|
|
|
Total revenue yield
|
$
|
541,052
|
|
39.8
|
%
|
|
$
|
526,252
|
|
36.9
|
%
|
|
|
Components of Increase in Interest and Fee Income
Three
Months Ended December 31, 2014
Compared to Three Months
Ended December 31, 2013
Increase (Decrease)
|
|
|
Volume
|
|
Rate
|
|
Net
|
|
Branch small loans
|
$
|
1,927
|
|
|
$
|
33
|
|
|
$
|
1,960
|
|
|
Convenience checks
|
|
3,026
|
|
|
|
1,796
|
|
|
|
4,822
|
|
|
Large loans
|
|
25
|
|
|
|
14
|
|
|
|
39
|
|
|
Automobile loans
|
|
(1,179
|
)
|
|
|
(139
|
)
|
|
|
(1,318
|
)
|
|
Retail loans
|
|
(223
|
)
|
|
|
12
|
|
|
|
(211
|
)
|
|
|
|
|
|
|
|
|
Total increase in interest and fee income
|
$
|
3,576
|
|
|
$
|
1,716
|
|
|
$
|
5,292
|
|
|
|
|
|
|
|
|
Net Loans Originated (1)
Three Months Ended December 31,
|
|
|
2014
|
|
2013
|
|
Branch small loans
|
$
|
80,171
|
|
$
|
65,347
|
|
Convenience checks
|
|
95,330
|
|
|
95,225
|
|
Large loans
|
|
17,737
|
|
|
13,418
|
|
Automobile loans
|
|
13,516
|
|
|
20,330
|
|
Retail loans
|
|
7,634
|
|
|
8,694
|
|
|
|
|
|
|
Total net loans originated
|
$
|
214,388
|
|
$
|
203,014
|
(1) Represents the balance of loan origination and refinancing net of
unearned finance charges
|
|
|
Three Months Ended December 31,
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
|
Amount
|
|
Percentage of
Average Finance
Receivables
(Annualized)
|
|
|
Amount
|
|
Percentage of
Average Finance
Receivables
(Annualized)
|
|
Net charge-offs
|
|
$
|
18,740
|
|
13.9
|
%
|
|
|
$
|
10,231
|
|
7.8
|
%
|
|
Provision for credit losses
|
|
$
|
15,950
|
|
11.8
|
%
|
|
|
$
|
11,638
|
|
8.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount
|
|
Percentage of
Total Revenue
|
|
|
Amount
|
|
Percentage of
Total Revenue
|
|
Provision for credit losses
|
|
$
|
15,950
|
|
29.7
|
%
|
|
|
$
|
11,638
|
|
24.0
|
%
|
|
General and administrative expenses
|
|
$
|
28,396
|
|
52.8
|
%
|
|
|
$
|
19,480
|
|
40.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount
|
|
Growth Rate
|
|
|
Amount
|
|
Growth Rate
|
|
Same store finance receivables at period-end/growth rate
|
|
$
|
504,697
|
|
-6.0
|
%
|
|
|
$
|
478,969
|
|
11.5
|
%
|
|
Same store revenue during period/growth rate
|
|
$
|
50,875
|
|
4.8
|
%
|
|
|
$
|
43,305
|
|
17.0
|
%
|
|
Number of branches in calculation
|
|
|
264
|
|
|
|
|
|
213
|
|
|
|
|
Twelve Months Ended December 31,
|
|
|
2014
|
|
|
|
2013
|
|
|
|
Average Finance
Receivables
|
|
|
Average Yield
|
|
|
Average Finance
Receivables
|
|
|
Average Yield
|
|
Branch small loans
|
$
|
110,531
|
|
|
48.0
|
%
|
|
|
$
|
88,979
|
|
|
48.9
|
%
|
|
Convenience checks
|
|
178,181
|
|
|
45.8
|
%
|
|
|
|
133,723
|
|
|
40.7
|
%
|
|
Large loans
|
|
42,887
|
|
|
26.9
|
%
|
|
|
|
45,374
|
|
|
27.6
|
%
|
|
Automobile loans
|
|
169,607
|
|
|
19.7
|
%
|
|
|
|
178,247
|
|
|
20.3
|
%
|
|
Retail loans
|
|
28,295
|
|
|
18.3
|
%
|
|
|
|
31,031
|
|
|
18.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest and fee yield
|
$
|
529,501
|
|
|
34.9
|
%
|
|
|
$
|
477,354
|
|
|
31.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue yield
|
$
|
529,501
|
|
|
38.7
|
%
|
|
|
$
|
477,354
|
|
|
35.7
|
%
|
|
|
Components of Increase in Interest and Fee Income
Twelve
Months Ended December 31, 2014
Compared to Twelve Months
Ended December 31, 2013
Increase (Decrease)
|
|
|
Volume
|
|
Rate
|
|
Net
|
|
Branch small loans
|
$
|
10,361
|
|
|
$
|
(830
|
)
|
|
$
|
9,531
|
|
|
Convenience checks
|
|
19,753
|
|
|
|
7,453
|
|
|
|
27,206
|
|
|
Large loans
|
|
(700
|
)
|
|
|
(311
|
)
|
|
|
(1,011
|
)
|
|
Automobile loans
|
|
(1,789
|
)
|
|
|
(1,064
|
)
|
|
|
(2,853
|
)
|
|
Retail loans
|
|
(490
|
)
|
|
|
60
|
|
|
|
(430
|
)
|
|
|
|
|
|
|
|
|
Total increase in interest and fee income
|
$
|
27,135
|
|
|
$
|
5,308
|
|
|
$
|
32,443
|
|
|
|
|
|
|
|
|
|
Net Loans Originated (1)
Twelve Months Ended December 31,
|
|
|
2014
|
|
2013
|
|
Branch small loans
|
$
|
240,465
|
|
|
$
|
216,677
|
|
Convenience checks
|
|
334,115
|
|
|
|
297,259
|
|
Large loans
|
|
50,731
|
|
|
|
48,454
|
|
Automobile loans
|
|
64,842
|
|
|
|
100,622
|
|
Retail loans
|
|
29,984
|
|
|
|
34,228
|
|
|
|
|
|
|
|
Total net loans originated
|
$
|
720,137
|
|
|
$
|
697,240
|
(1) Represents the balance of loan origination and refinancing net of
unearned finance charges
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended December 31,
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
|
Amount
|
|
Percentage of
Average Finance
Receivables
|
|
|
|
Amount
|
|
Percentage of
Average Finance
Receivables
|
|
|
Net charge-offs
|
|
$
|
56,529
|
|
10.7
|
%
|
|
|
|
$
|
32,719
|
|
6.9
|
%
|
|
|
Net charge-offs (180+ policy change)
|
|
|
2,106
|
|
0.4
|
%
|
|
|
|
|
—
|
|
0.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net charge-offs
|
|
$
|
58,635
|
|
11.1
|
%
|
|
|
|
$
|
32,719
|
|
6.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for credit losses
|
|
$
|
69,057
|
|
13.0
|
%
|
|
|
|
$
|
39,192
|
|
8.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount
|
|
Percentage of
Total Revenue
|
|
|
|
Amount
|
|
Percentage of
Total Revenue
|
|
|
Provision for credit losses
|
|
$
|
69,057
|
|
33.7
|
%
|
|
|
|
$
|
39,192
|
|
23.0
|
%
|
|
|
General and administrative expenses
|
|
$
|
96,776
|
|
47.3
|
%
|
|
|
|
$
|
71,039
|
|
41.6
|
%
|
|
|
|
|
Finance Receivables As of December 31,
|
|
|
|
2014
|
|
|
2013
|
|
|
2012
|
|
|
|
|
Finance
Receivables
|
|
Percentage of
Total
|
|
Finance
Receivables
|
|
Percentage of
Total
|
|
Finance
Receivables
|
|
Percentage of
Total
|
|
Branch small loans
|
|
$
|
128,217
|
|
23.5
|
%
|
|
$
|
109,776
|
|
20.1
|
%
|
|
$
|
78,366
|
|
17.8
|
%
|
|
Convenience checks
|
|
|
191,316
|
|
35.0
|
%
|
|
|
179,203
|
|
32.9
|
%
|
|
|
110,196
|
|
25.1
|
%
|
|
Large loans
|
|
|
46,147
|
|
8.4
|
%
|
|
|
43,311
|
|
8.0
|
%
|
|
|
52,001
|
|
11.8
|
%
|
|
Automobile loans
|
|
|
154,382
|
|
28.3
|
%
|
|
|
181,126
|
|
33.3
|
%
|
|
|
168,604
|
|
38.4
|
%
|
|
Retail loans
|
|
|
26,130
|
|
4.8
|
%
|
|
|
31,268
|
|
5.7
|
%
|
|
|
30,307
|
|
6.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total finance receivables
|
|
$
|
546,192
|
|
100.0
|
%
|
|
$
|
544,684
|
|
100.0
|
%
|
|
$
|
439,474
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of branches at period end
|
|
|
300
|
|
|
|
|
264
|
|
|
|
|
221
|
|
|
|
Average finance receivables per branch
|
|
$
|
1,821
|
|
|
|
$
|
2,063
|
|
|
|
$
|
1,989
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contractual Delinquency As of
|
|
|
|
December 31, 2014
|
|
September 30, 2014
|
|
December 31, 2013
|
|
|
|
Amount
|
|
Percentage of
Total Finance
Receivables
|
|
Amount
|
|
Percentage of
Total Finance
Receivables
|
|
Amount
|
|
Percentage of
Total Finance
Receivables
|
|
Allowance for credit losses
|
|
$
|
40,511
|
|
7.4
|
%
|
|
$
|
43,301
|
|
8.0
|
%
|
|
$
|
30,089
|
|
5.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
422,342
|
|
77.4
|
%
|
|
|
404,756
|
|
74.5
|
%
|
|
|
407,571
|
|
74.9
|
%
|
|
1 to 29 days delinquent
|
|
|
82,714
|
|
15.1
|
%
|
|
|
98,304
|
|
18.1
|
%
|
|
|
93,303
|
|
17.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Delinquent accounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30 to 59 days
|
|
|
15,951
|
|
2.9
|
%
|
|
|
19,274
|
|
3.6
|
%
|
|
|
17,088
|
|
3.1
|
%
|
|
60 to 89 days
|
|
|
9,624
|
|
1.8
|
%
|
|
|
9,406
|
|
1.7
|
%
|
|
|
9,267
|
|
1.7
|
%
|
|
90 to 119 days
|
|
|
6,899
|
|
1.2
|
%
|
|
|
5,508
|
|
1.0
|
%
|
|
|
6,843
|
|
1.3
|
%
|
|
120 to 149 days
|
|
|
4,988
|
|
0.9
|
%
|
|
|
4,284
|
|
0.8
|
%
|
|
|
5,108
|
|
0.9
|
%
|
|
150 to 179 days
|
|
|
3,674
|
|
0.7
|
%
|
|
|
1,821
|
|
0.3
|
%
|
|
|
3,409
|
|
0.6
|
%
|
|
180 days and over
|
|
|
—
|
|
0.0
|
%
|
|
|
—
|
|
0.0
|
%
|
|
|
2,095
|
|
0.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total contractual delinquency
|
|
$
|
41,136
|
|
7.5
|
%
|
|
$
|
40,293
|
|
7.4
|
%
|
|
$
|
43,810
|
|
8.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total finance receivables
|
|
$
|
546,192
|
|
100.0
|
%
|
|
$
|
543,353
|
|
100.0
|
%
|
|
$
|
544,684
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 day and over delinquent
|
|
$
|
123,850
|
|
22.6
|
%
|
|
$
|
138,597
|
|
25.5
|
%
|
|
$
|
137,113
|
|
25.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contractual Delinquency by Product
|
|
|
December 31, 2014
|
|
September 30, 2014
|
|
December 31, 2013
|
|
|
Amount
|
|
Percentage of
Total Finance
Receivables
|
|
Amount
|
|
Percentage of
Total Finance
Receivables
|
|
Amount
|
|
Percentage of
Total Finance
Receivables
|
|
Branch small loans
|
$
|
10,247
|
|
8.0
|
%
|
|
|
17,151
|
|
8.7
|
%
|
|
$
|
10,211
|
|
9.3
|
%
|
|
Convenience checks
|
|
17,165
|
|
9.0
|
%
|
|
|
9,209
|
|
8.0
|
%
|
|
|
15,427
|
|
8.6
|
%
|
|
Large loans
|
|
2,106
|
|
4.6
|
%
|
|
|
2,114
|
|
5.0
|
%
|
|
|
3,010
|
|
6.9
|
%
|
|
Automobile loans
|
|
10,302
|
|
6.7
|
%
|
|
|
10,588
|
|
6.5
|
%
|
|
|
12,972
|
|
7.2
|
%
|
|
Retail loans
|
|
1,316
|
|
5.0
|
%
|
|
|
1,231
|
|
4.6
|
%
|
|
|
2,190
|
|
7.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total contractual delinquency
|
|
41,136
|
|
7.5
|
%
|
|
$
|
40,293
|
|
7.4
|
%
|
|
|
43,810
|
|
8.0
|
%
|
|
|
|
|
|
|
|
Subset of Convenience Checks
December 31, 2014 (1)
|
|
Current
|
|
$
|
20,717
|
|
|
1 to 29 days contractually delinquent
|
|
|
4,965
|
|
|
30 days and over contractually delinquent
|
|
|
7,534
|
|
|
|
|
|
|
Total finance receivables
|
|
$
|
33,216
|
|
|
|
|
|
|
|
|
|
|
Allowance for credit losses
|
|
$
|
9,337
|
|
|
Allowance as a % of 30 days and over contractually delinquent
|
|
|
124
|
%
|
|
Allowance as a % of 1 day and over contractually delinquent
|
|
|
75
|
%
|
(1) Remaining balance of convenience checks originated in April, June,
July, August, and September 2014 that contained a higher percentage of
lower credit quality customers
Regional Management Corp. and Subsidiaries
Unaudited
Non-GAAP Reconciliation of Selected Financial Data
(in
thousands, except per share amounts)
Because it adjusts for certain non-recurring and non-cash items, the
Company believes that these non-GAAP measures are useful to investors as
supplemental financial measures that, when viewed with its GAAP
financial information, provide information regarding trends in the
Company’s results of operations and credit metrics, which is intended to
help investors meaningfully evaluate and compare the Company’s results
of operations and credit metrics between periods.
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, 2014
|
|
|
Actual
|
|
Adjustments
|
|
Non-GAAP
|
|
General and administrative expenses
|
$
|
28,396
|
|
|
$
|
(1,489
|
)(1)(2)
|
|
$
|
26,907
|
|
|
Income taxes
|
$
|
2,285
|
|
|
$
|
568((4
|
))
|
|
$
|
2,853
|
|
|
Net income
|
$
|
3,381
|
|
|
$
|
921
|
|
|
$
|
4,302
|
|
|
Diluted net income per common share
|
$
|
0.26
|
|
|
$
|
0.07
|
|
|
$
|
0.33
|
|
|
Efficiency ratio
|
|
52.8
|
%
|
|
|
-2.8
|
%
|
|
|
50.0
|
%
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended December 31, 2014
|
|
|
Actual
|
|
Adjustments
|
|
Non-GAAP
|
|
General and administrative expenses
|
$
|
96,776
|
|
|
$
|
(1,538
|
)(1)(2)(3)
|
|
$
|
95,238
|
|
|
Income taxes
|
$
|
9,137
|
|
|
$
|
587((4
|
))
|
|
$
|
9,724
|
|
|
Net income
|
$
|
14,802
|
|
|
$
|
951
|
|
|
$
|
15,753
|
|
|
Diluted net income per common share
|
$
|
1.14
|
|
|
$
|
0.08
|
|
|
$
|
1.22
|
|
|
Efficiency ratio
|
|
47.3
|
%
|
|
|
-0.8
|
%
|
|
|
46.5
|
%
|
(1) Exclude one-time CEO separation costs of $1,154
(2) Exclude one-time loan system conversion costs of $335 and $1,772 for
the three and twelve months ended December 31, 2014
(3) Benefit related to the reversal of vacation pay liability of $1,388
(4) Tax effect of the adjustments
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, 2013
|
|
|
|
Actual
|
|
Adjustments
|
|
Non-GAAP
|
|
|
General and administrative expenses
|
$
|
19,480
|
|
|
$
|
(1,503
|
)(5)(6)
|
|
$
|
17,977
|
|
|
|
Income taxes
|
$
|
5,130
|
|
|
$
|
450((7
|
))
|
|
$
|
5,580
|
|
|
|
Net income
|
$
|
8,385
|
|
|
$
|
1,053
|
|
|
$
|
9,438
|
|
|
|
Diluted net income per common share
|
$
|
0.65
|
|
|
$
|
0.08
|
|
|
$
|
0.73
|
|
|
|
Efficiency ratio
|
|
40.1
|
%
|
|
|
-3.1
|
%
|
|
|
37.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended December 31, 2013
|
|
|
|
Actual
|
|
Adjustments
|
|
Non-GAAP
|
|
|
General and administrative expenses
|
$
|
71,039
|
|
|
$
|
(1,959
|
)(5)(6)
|
|
$
|
69,080
|
|
|
|
Income taxes
|
$
|
17,460
|
|
|
$
|
450((7
|
))
|
|
$
|
17,910
|
|
|
|
Net income
|
$
|
28,794
|
|
|
$
|
1,509
|
|
|
$
|
30,303
|
|
|
|
Diluted net income per common share
|
$
|
2.23
|
|
|
$
|
0.12
|
|
|
$
|
2.35
|
|
|
|
Efficiency ratio
|
|
41.6
|
%
|
|
|
-1.1
|
%
|
|
|
40.5
|
%
|
|
(5) Exclude director compensation of $1,210
(6) Exclude one-time secondary offering costs of $293 and $749 for the
three and twelve months ended December 31, 2013
(7) Tax effect of the adjustments (secondary offering expense is
non-deductible for tax purposes)
Source: Regional Management Corp.
Investor Relations
Garrett Edson, 203-682-8331