Regional Management Corp. Q2 2024 10-Q Filed

TL;DR

RMGT Q2 10-Q shows loan portfolio details and delinquency rates. Check RMIV Revolving Warehouse Credit Facility.

AI Summary

Regional Management Corp. filed its 10-Q for the period ending June 30, 2024. The company reported on its financing receivables and loan portfolio, including delinquency rates. Key financial figures such as Additional Paid-In Capital and Retained Earnings were also detailed for various periods, including March 31, 2023, December 31, 2023, and June 30, 2024.

Why It Matters

This filing provides insight into the financial health and loan performance of Regional Management Corp., which can impact investors and the broader consumer lending market.

Risk Assessment

Risk Level: medium — The filing details loan delinquency rates and specific credit facilities, indicating potential risks associated with the company's lending operations.

Key Numbers

• 2024-06-30 — Reporting Period End Date (Indicates the end of the fiscal quarter for which financial data is reported.)
• 2023-12-31 — Previous Year End Date (Provides a comparison point for financial performance and position.)
• 2023-03-31 — Prior Year Quarter End Date (Offers further historical data for trend analysis.)

Key Players & Entities

• Regional Management Corp. (company) — Filer of the 10-Q
• June 30, 2024 (date) — End of reporting period
• March 31, 2023 (date) — Comparative financial reporting date
• December 31, 2023 (date) — Comparative financial reporting date
• rm:RMRVIRevolvingWarehouseCreditFacilityMember (financial_instrument) — Mentioned credit facility

FAQ

Key Financial Figures

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

Filing Documents

• rm-20240630.htm (10-Q) — 4797KB
• rm-ex10_2.htm (EX-10.2) — 75KB
• rm-ex10_3.htm (EX-10.3) — 65KB
• rm-ex10_4.htm (EX-10.4) — 71KB
• rm-ex10_5.htm (EX-10.5) — 126KB
• rm-ex10_6.htm (EX-10.6) — 47KB
• rm-ex10_7.htm (EX-10.7) — 79KB
• rm-ex31_1.htm (EX-31.1) — 14KB
• rm-ex31_2.htm (EX-31.2) — 14KB
• rm-ex32_1.htm (EX-32.1) — 10KB
• 0000950170-24-090023.txt ( ) — 19905KB
• rm-20240630.xsd (EX-101.SCH) — 1582KB
• rm-20240630_htm.xml (XML) — 5260KB

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements Consolidated Balance Sheets Dated June 30, 2024 and December 31, 2023 4 Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2024 and 2023 5 Consolidated Statements of Stockholders' Equity for the Three and Six Months Ended June 30, 2024 and 2023 6 Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2024 and 2023 8

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 10 Note 1. Nature of Business 10 Note 2. Basis of Presentation and Significant Accounting Policies 10 Note 3. Finance Receivables, Credit Quality Information, and Allowance for Credit Losses 13 Note 4. Restricted Available-for-Sale Investments 20 Note 5. Debt 22 Note 6. Stockholders' Equity 25 Note 7. Disclosure About Fair Value of Financial Instruments 25 Note 8. Income Taxes 26 Note 9. Earnings Per Share 27 Note 10. Share-Based Compensation 27 Note 11. Commitments and Contingencies 30 Note 12. Subsequent Events 31

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 32

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 46

Controls and Procedures

Item 4. Controls and Procedures 47

– OTHER INFORMATION

PART II – OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 48

Risk Factors

Item 1A. Risk Factors 48

Other Information

Item 5. Other Information 48

Exhibits

Item 6. Exhibits 49 SIGNATURE 51 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 2024 Plan 2024 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 KTIP key team member incentive program 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

– 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) June 30, 2024 December 31, 2023 Assets Cash $ 4,323 $ 4,509 Net finance receivables 1,773,743 1,771,410 Unearned insurance premiums ( 46,081 ) ( 47,892 ) Allowance for credit losses ( 185,400 ) ( 187,400 ) Net finance receivables, less unearned insurance premiums and allowance for credit losses 1,542,262 1,536,118 Restricted cash 138,891 124,164 Lease assets 35,144 34,303 Intangible assets 19,264 15,846 Property and equipment 13,411 13,787 Deferred tax assets, net 12,376 13,641 Restricted available-for-sale investments 2,157 22,740 Other assets 21,224 29,419 Total assets $ 1,789,052 $ 1,794,527 Liabilities and Stockholders' Equity Liabilities: Debt $ 1,378,449 $ 1,399,814 Unamortized debt issuance costs ( 5,616 ) ( 4,578 ) Net debt 1,372,833 1,395,236 Lease liabilities 37,286 36,576 Accounts payable and accrued expenses 34,030 40,442 Total liabilities 1,444,149 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, 14,962 shares issued and 10,156 shares outstanding at June 30, 2024 and 14,566 shares issued and 9,759 shares outstanding at December 31, 2023) 1,496 1,457 Additional paid-in capital 126,373 121,752 Retained earnings 367,216 349,579 Accumulated other comprehensive loss ( 39 ) ( 372 ) Treasury stock ( 4,807 shares at June 30, 2024 and December 31, 2023) ( 150,143 ) ( 150,143 ) Total stockholders' equity 344,903 322,273 Total liabilities and stockholders' equity $ 1,789,052 $ 1,794,527 See accompanying notes to consol

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 June 30, 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 mone

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