Regional Management Corp. Files 10-Q for Period Ending March 31, 2024

TL;DR

<b>Regional Management Corp. filed its Q1 2024 10-Q, detailing loan portfolio performance and financial metrics.</b>

AI Summary

Regional Management Corp. (RM) filed a Quarterly Report (10-Q) with the SEC on May 3, 2024. Regional Management Corp. filed a 10-Q report for the period ending March 31, 2024. The filing includes data related to various loan segments, including small loans and large loans. Specific delinquency periods such as 30-59 days past due and 150-179 days past due are detailed. Information on financing receivables, both current and past due, is provided for different loan types. The report references stock compensation plans and performance shares.

Why It Matters

For investors and stakeholders tracking Regional Management Corp., this filing contains several important signals. This 10-Q provides an updated view of Regional Management Corp.'s financial health and operational performance in the personal credit sector. Investors and analysts can assess the company's credit risk, loan origination trends, and overall financial stability through the detailed disclosures.

Risk Assessment

Risk Level: — Regional Management Corp. shows moderate risk based on this filing. The company operates in the personal credit institutions sector, which is sensitive to economic downturns and interest rate changes, as indicated by the detailed delinquency data presented in the filing.

Analyst Insight

Monitor the trends in delinquency rates for both small and large loans to assess potential credit quality deterioration.

Key Numbers

• 2024-03-31 — Period End Date (Conformed period of report)
• 2024-05-03 — Filing Date (Filed as of date)
• 10-Q — Form Type (Type of filing)
• 001-35477 — SEC File Number (SEC file number for the company)

Key Players & Entities

• Regional Management Corp. (company) — Filer of the 10-Q report
• 0000950170-24-052963 (other) — Accession number for the filing
• 2024-03-31 (date) — Conformed period of report
• 2024-05-03 (date) — Filed as of date
• 6141 (other) — Standard Industrial Classification for Personal Credit Institutions
• DE (other) — State of incorporation
• SC (other) — State of business address
• 864-448-7000 (other) — Business phone number

FAQ

Risk Factors

• Contractual Delinquencies of Loans [medium — financial]: The filing details various levels of contractual delinquencies for loans, including specific past-due periods like 30-59 days, 60-89 days, 90-119 days, and 150-179 days.
• Financing Receivables by Delinquency Status [medium — financial]: Information is provided on current financing receivables and those past due across different timeframes for various loan types (e.g., retail loans, small loans, large loans).
• Loan Portfolio Segmentation [medium — financial]: The report breaks down the loan portfolio into segments such as small loans and large loans, with further categorization by delinquency grades (Grade 1 through Grade 6).

Key Dates

• 2024-03-31: Quarterly Period End — The filing covers financial data up to this date.
• 2024-05-03: Filing Date — Date the 10-Q was officially submitted to the SEC.

Key Financial Figures

• $0.10 — ge on Which Registered Common Stock , $0.10 par value RM New York Stock Exchang

Filing Documents

• rm-20240331.htm (10-Q) — 3810KB
• rm-ex31_1.htm (EX-31.1) — 13KB
• rm-ex31_2.htm (EX-31.2) — 13KB
• rm-ex32_1.htm (EX-32.1) — 10KB
• 0000950170-24-052963.txt (&nbsp;) — 16404KB
• rm-20240331.xsd (EX-101.SCH) — 1524KB
• rm-20240331_htm.xml (XML) — 4360KB

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements Consolidated Balance Sheets Dated March 31, 2024 and December 31, 2023 4 Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2024 and 2023 5 Consolidated Statements of Stockholders' Equity for the Three Months Ended March 31, 2024 and 2023 6 Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2024 and 2023 7

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 8 Note 1. Nature of Business 8 Note 2. Basis of Presentation and Significant Accounting Policies 8 Note 3. Finance Receivables, Credit Quality Information, and Allowance for Credit Losses 11 Note 4. Restricted Available-for-Sale Investments 17 Note 5. Debt 18 Note 6. Stockholders' Equity 21 Note 7. Disclosure About Fair Value of Financial Instruments 21 Note 8. Income Taxes 22 Note 9. Earnings Per Share 23 Note 10. Share-Based Compensation 23 Note 11. Commitments and Contingencies 26 Note 12. Subsequent Events 26

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 27

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 39

Controls and Procedures

Item 4. Controls and Procedures 40

– OTHER INFORMATION

PART II – OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 41

Risk Factors

Item 1A. Risk Factors 41

Other Information

Item 5. Other Information 41

Exhibits

Item 6. Exhibits 42 SIGNATURE 44 Table of Contents GLOSSARY Terms and abbreviations used in this report are defined below: Term or Abbreviation Definition 2007 Plan 2007 Management Incentive Plan 2011 Plan 2011 Stock Incentive Plan 2015 Plan 2015 Long-Term Incentive Plan ASU Accounting Standards Update Board the Company's Board of Directors CFPB Consumer Financial Protection Bureau Company Regional Management Corp. Consent Agreement Consent Agreement between the CFPB and the Company dated January 4, 2024 CSPU cash-settled performance unit Efficiency ratio annualized general and administrative expenses as a percentage of total revenue Exchange Act the Securities Exchange Act of 1934, as amended FASB Financial Accounting Standard Board FICO Fair Isaac Corporation GAAP U.S. Generally Accepted Accounting Principles LGD loss given default LTIP long-term incentive program Net credit loss ratio annualized net credit losses as a percentage of average net finance receivables Notice notice provided by the CFPB to the Company dated March 7, 2023 NQSO nonqualified stock option Operating expense ratio annualized general and administrative expenses as a percentage of average net finance receivables PD probability of default PRSU performance restricted stock unit RMIT Regional Management Issuance Trust RMR Regional Management Receivables RMR II Regional Management Receivables II, LLC RMR III Regional Management Receivables III, LLC RMR IV Regional Management Receivables IV, LLC RMR V Regional Management Receivables V, LLC RMR VI Regional Management Receivables VI, LLC RMR VII Regional Management Receivables VII, LLC RSA restricted stock award RSU restricted stock unit SEC Securities and Exchange Commission SOFR secured overnight financing rate SPE wholly owned, bankruptcy-remote, special purpose entity TDR troubled debt res

– financial information

Part I – financial information

FINANCIA L STATEMENTS

ITEM 1. FINANCIA L STATEMENTS. Regional Management Corp. and Subsidiaries Consolidated Ba lance Sheets (in thousands, except par value amounts) (Unaudited) March 31, 2024 December 31, 2023 Assets Cash $ 4,215 $ 4,509 Net finance receivables 1,744,286 1,771,410 Unearned insurance premiums ( 45,675 ) ( 47,892 ) Allowance for credit losses ( 187,100 ) ( 187,400 ) Net finance receivables, less unearned insurance premiums and allowance for credit losses 1,511,511 1,536,118 Restricted cash 118,194 124,164 Lease assets 33,400 34,303 Restricted available-for-sale investments 22,596 22,740 Intangible assets 17,360 15,846 Deferred tax assets, net 13,491 13,641 Property and equipment 13,440 13,787 Other assets 22,541 29,419 Total assets $ 1,756,748 $ 1,794,527 Liabilities and Stockholders' Equity Liabilities: Debt $ 1,358,795 $ 1,399,814 Unamortized debt issuance costs ( 3,948 ) ( 4,578 ) Net debt 1,354,847 1,395,236 Lease liabilities 35,679 36,576 Accounts payable and accrued expenses 29,762 40,442 Total liabilities 1,420,288 1,472,254 Commitments and contingencies (Note 11) Stockholders' equity: Preferred stock ($ 0.10 par value, 100,000 shares authorized, none issued or outstanding) — — Common stock ($ 0.10 par value, 1,000,000 shares authorized, 14,675 shares issued and 9,868 shares outstanding at March 31, 2024 and 14,566 shares issued and 9,759 shares outstanding at December 31, 2023) 1,468 1,457 Additional paid-in capital 123,563 121,752 Retained earnings 361,791 349,579 Accumulated other comprehensive loss ( 219 ) ( 372 ) Treasury stock ( 4,807 shares at March 31, 2024 and December 31, 2023) ( 150,143 ) ( 150,143 ) Total stockholders' equity 336,460 322,273 Total liabilities and stockholders' equity $ 1,756,748 $ 1,794,527 See accompanying notes to co

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements Note 1. Nature of Business The Company was incorporated and began operations in 1987. The Company is engaged in the consumer finance business, offering large loans, small loans, and related payment and collateral protection insurance products. The Company formerly offered retail loans but ceased accepting applications for retail loan products effective November 2022. The Company continues to own and service its existing portfolio of retail loans. As of March 31, 2024, the Company operated under the name "Regional Finance" online and in branch locations in 19 states across the United States. The Company's large loan receivables are direct loans to customers, some of which are convenience check receivables and the vast majority of which are secured by non-essential household goods, automobiles, and/or other vehicles. Convenience checks are direct loans originated by mailing checks to customers based on a pre-screening process that includes a review of the prospective customer's credit profile provided by national credit reporting bureaus or data aggregators. A recipient of a convenience check is able to enter into a loan by endorsing and depositing or cashing the check. The Company's small loan portfolio is comprised of branch small loan receivables and convenience check receivables. Branch small loan receivables are direct loans to customers and are secured by non-essential household goods and, in some instances, an automobile. Retail loan receivables consist principally of retail installment sales contracts collateralized by the purchased furniture, appliances, and other retail items and are initiated by and purchased from retailers, subject to the Company's credit approval. The Company's loan volume and contractual delinquency follow seasonal trends. Demand for the Company's loans is typically highest during the second, third, and fourth quarters, which the Company believes is largely due to customers borrowing mon

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