- Net income of $2.4 million and diluted
earnings per share of $0.25 -
- Adjusted net income of $5.0 million and
adjusted diluted earnings per share of $0.54 -
- 30+ day contractual delinquencies of 7.1% as
of December 31, 2022 -
- Early indications of improved credit
performance in the fourth quarter -
Regional Management Corp. (NYSE: RM), a diversified consumer
finance company, today announced results for the fourth quarter
ended December 31, 2022.
“We closed 2022 with a solid fourth quarter, including financial
results that were better than our expectations,” said Robert W.
Beck, President and Chief Executive Officer of Regional Management
Corp. “While net income was $2.4 million and diluted EPS was $0.25
in the quarter, we produced adjusted net income of $5.0 million and
adjusted diluted EPS of $0.54. We grew our portfolio by $92 million
to $1.7 billion, but continued strong demand has allowed us to be
selective about the borrowers to whom we make loans, particularly
as we have tightened credit since fourth quarter 2021 and
intentionally slowed our growth rate throughout 2022. We finished
the quarter with a 30+ day delinquency rate of 7.1%, just 10 basis
points higher than 2019 pre-pandemic levels, and our first payment
default rate improved to 7.1% in December, 240 basis points better
than September 2022 and 170 basis points better than December
2019.”
“We also took several meaningful steps in the quarter to prepare
us for the new year,” added Mr. Beck. “Late in the quarter, we
disposed of a portfolio of non-performing loans at an attractive
price. The sale enabled us to put some of our stressed segments
behind us and re-focus more of our efforts on earlier-stage
delinquent accounts, where we experienced improvements in roll
rates and delinquency. We also continued to tighten credit in the
quarter, particularly to new borrowers, completed the rollout of
our next generation custom credit scorecard, expanded our
collections capabilities, released an enhanced customer portal, and
increased pricing in certain states and segments.”
“Looking ahead, we believe that the actions we took in 2022
position us to address the challenging economic environment and
will enable us to respond quickly when conditions improve,”
continued Mr. Beck. “In 2023, we will continue our focus on our
highest confidence originations, emphasizing quality over quantity.
A greater percentage of our originations will be to present and
former borrowers, with new borrower lending disproportionately
skewed to our newer states. As a result, we expect receivables
growth to slow in 2023. As always, we will tightly manage our
expenses, and we will monitor our credit performance and the
macroeconomic environment closely, making further adjustments to
underwriting as necessary. Our business and our customers remain
resilient, and we are well-positioned to drive controlled,
sustainable growth and profitability on behalf of our
shareholders.”
Adjusted net income and adjusted diluted earnings per share are
non-GAAP measures. Please refer to the reconciliations of non-GAAP
measures to comparable GAAP measures included at the end of this
press release.
Fourth Quarter 2022 Highlights
- Net income for the fourth quarter of 2022 was $2.4 million and
diluted earnings per share was $0.25, inclusive of a $2.7 million
impact to net income from the sale of $27.1 million of
non-performing loans. Excluding the impact of this loan sale,
adjusted net income was $5.0 million and adjusted diluted earnings
per share was $0.54.
- Net finance receivables as of December 31, 2022 were $1.70
billion, an increase of $273.1 million, or 19.2%, from the
prior-year period.
- Large loan net finance receivables of $1.2 billion increased
$237.5 million, or 24.5%, from the prior-year period and
represented 71.1% of the total loan portfolio, compared to 68.1% in
the prior-year period.
- Small loan net finance receivables were $481.6 million, an
increase of 8.2% from the prior-year period.
- Total loan originations were $470.3 million in the fourth
quarter of 2022, an increase of $36.0 million, or 8.3%, from the
prior-year period.
- Total revenue for the fourth quarter of 2022 was $132.0
million, an increase of $12.5 million, or 10.5%, from the
prior-year period.
- Interest and fee income increased $10.3 million, or 9.6%,
primarily due to higher average net finance receivables.
- Insurance income, net increased $1.3 million, or 14.1%, driven
by portfolio growth.
- Non-performing loan sale negatively impacted total revenue by
$2.2 million.
- Provision for credit losses for the fourth quarter of 2022 was
$60.8 million, an increase of $29.8 million, or 96.0%, from the
prior-year period. The provision for credit losses for the fourth
quarter of 2022 included a reserve reduction of $11.8 million
related to the sale of late-stage, non-performing loans, partially
offset by incremental reserves of $9.1 million related to $91.8
million in sequential portfolio growth and $1.7 million based on
the macroeconomic model.
- Allowance for credit losses was $178.8 million as of December
31, 2022, including a $20.7 million allowance for credit losses
reserve associated with estimated future macroeconomic impacts on
credit losses.
- Annualized net credit losses as a percentage of average net
finance receivables for the fourth quarter of 2022 were 15.0%,
compared to 6.4% in the prior-year period. Approximately 320 basis
points of the fourth quarter 2022 net credit loss rate was
attributable to the sale of non-performing loans.
- As of December 31, 2022, 30+ day contractual delinquencies
totaled $119.8 million, or 7.1% of net finance receivables, a
decrease of 10 basis points compared to September 30, 2022, and a
10 basis point increase from pre-pandemic levels as of December 31,
2019. The 30+ day contractual delinquency compares favorably to the
company’s $178.8 million allowance for credit losses as of December
31, 2022.
- General and administrative expenses for the fourth quarter of
2022 were $55.1 million, a decrease of $0.4 million, or 0.7%, from
the prior-year period.
- The operating expense ratio (annualized general and
administrative expenses as a percentage of average net finance
receivables) for the fourth quarter of 2022 was 13.4%, a 290 basis
point improvement compared to the prior-year period.
- The company expanded its operations to the state of Idaho in
December. The company expects to expand into one additional state
in the first quarter of 2023.
First Quarter 2023 Dividend
The company’s Board of Directors has declared a dividend of
$0.30 per common share for the first quarter of 2023. The dividend
will be paid on March 15, 2023 to shareholders of record as of the
close of business on February 22, 2023. 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.
Liquidity and Capital Resources
As of December 31, 2022, the company had net finance receivables
of $1.7 billion and debt of $1.4 billion. The debt consisted
of:
- $147.5 million on the company’s $420 million senior revolving
credit facility,
- $18.6 million on the company’s aggregate $300 million revolving
warehouse credit facilities, and
- $1.2 billion through the company’s asset-backed
securitizations.
As of December 31, 2022, the company’s unused capacity to fund
future growth on its revolving credit facilities (subject to the
borrowing base) was $555 million, or 77.1%, and the company had
available liquidity of $101.4 million, including unrestricted cash
on hand and immediate availability to draw down cash from its
revolving credit facilities. As of December 31, 2022, the company’s
fixed-rate debt as a percentage of total debt was 88%, with a
weighted-average coupon of 3.6% and a weighted-average revolving
duration of 2.1 years.
The company had a funded debt-to-equity ratio of 4.4 to 1.0 and
a stockholders’ equity ratio of 17.9%, each as of December 31,
2022. On a non-GAAP basis, the company had a funded
debt-to-tangible equity ratio of 4.6 to 1.0, as of December 31,
2022. Please refer to the reconciliations of non-GAAP measures to
comparable GAAP measures included at the end of this press
release.
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’s website prior to the earnings call at
www.RegionalManagement.com. ***
In addition, a live webcast of the conference call will be
available on Regional’s website at www.RegionalManagement.com.
A webcast replay of the call will be available at
www.RegionalManagement.com for one year following the call.
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” online and in branch locations in 18
states across the United States. 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, and its
consumer website. For more information, please visit
www.RegionalManagement.com.
Forward-Looking Statements
This press release may contain various “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements are not statements
of historical fact but instead represent Regional Management
Corp.’s expectations or beliefs concerning future events.
Forward-looking statements include, without limitation, statements
concerning financial outlooks or future plans, objectives, goals,
projections, strategies, events, or performance, and underlying
assumptions and other statements related thereto. 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 speak
only as of the date on which they were made and are about matters
that are inherently subject to risks and uncertainties, many of
which are outside of the control of Regional Management. As a
result, actual performance and results may differ materially from
those contemplated by these forward-looking statements. Therefore,
investors should not place undue reliance on forward-looking
statements.
Factors that could cause actual results or performance to differ
from the expectations expressed or implied in forward-looking
statements include, but are not limited to, the following: managing
growth effectively, implementing Regional Management’s growth
strategy, and opening new branches as planned; Regional
Management’s convenience check strategy; Regional Management’s
policies and procedures for underwriting, processing, and servicing
loans; Regional Management’s ability to collect on its loan
portfolio; Regional Management’s insurance operations; exposure to
credit risk and repayment risk, which risks may increase in light
of adverse or recessionary economic conditions; the implementation
of new underwriting models and processes, including as to the
effectiveness of new custom scorecards; changes in the competitive
environment in which Regional Management operates or a decrease in
the demand for its products; the geographic concentration of
Regional Management’s loan portfolio; the failure of third-party
service providers, including those providing information technology
products; changes in economic conditions in the markets Regional
Management serves, including levels of unemployment and
bankruptcies; the ability to achieve successful acquisitions and
strategic alliances; the ability to make technological improvements
as quickly as competitors; security breaches, cyber-attacks,
failures in information systems, or fraudulent activity; the
ability to originate loans; reliance on information technology
resources and providers, including the risk of prolonged system
outages; changes in current revenue and expense trends, including
trends affecting delinquencies and credit losses; changes in
operating and administrative expenses; the departure, transition,
or replacement of key personnel; the ability to timely and
effectively implement, transition to, and maintain the necessary
information technology systems, infrastructure, processes, and
controls to support Regional Management’s operations and
initiatives; changes in interest rates; existing sources of
liquidity may become insufficient or access to these sources may
become unexpectedly restricted; exposure to financial risk due to
asset-backed securitization transactions; risks related to
regulation and legal proceedings, including changes in laws or
regulations or in the interpretation or enforcement of laws or
regulations; changes in accounting standards, rules, and
interpretations and the failure of related assumptions and
estimates, including those associated with CECL accounting; the
impact of changes in tax laws, guidance, and interpretations,
including the timing and amount of revenues that may be recognized;
risks related to the ownership of Regional Management’s common
stock, including volatility in the market price of shares of
Regional Management’s common stock; the timing and amount of future
cash dividend payments; and anti-takeover provisions in Regional
Management’s charter documents and applicable state law. The
COVID-19 pandemic may impact Regional Management’s operations and
financial condition and may also magnify many of the existing risks
and uncertainties.
The foregoing factors and others are discussed in greater detail
in Regional Management’s filings with the Securities and Exchange
Commission. Regional Management will not update or revise
forward-looking statements to reflect events or circumstances after
the date of this press release or to reflect the occurrence of
unanticipated events or the non-occurrence of anticipated events,
whether as a result of new information, future developments, or
otherwise, except as required by law. Regional Management is not
responsible for changes made to this document by wire services or
Internet services.
Regional Management Corp. and
Subsidiaries
Consolidated Statements of
Income
(Unaudited)
(dollars in thousands, except
per share amounts)
Better (Worse)
Better (Worse)
4Q 22
4Q 21
$
%
FY 22
FY 21
$
%
Revenue
Interest and fee income
$
117,432
$
107,117
$
10,315
9.6
%
$
450,854
$
382,544
$
68,310
17.9
%
Insurance income, net
10,751
9,423
1,328
14.1
%
43,502
35,482
8,020
22.6
%
Other income
3,833
2,944
889
30.2
%
12,831
10,325
2,506
24.3
%
Total revenue
132,016
119,484
12,532
10.5
%
507,187
428,351
78,836
18.4
%
Expenses
Provision for credit losses
60,786
31,008
(29,778
)
(96.0
)%
185,115
89,015
(96,100
)
(108.0
)%
Personnel
34,669
33,313
(1,356
)
(4.1
)%
141,243
119,833
(21,410
)
(17.9
)%
Occupancy
5,997
6,511
514
7.9
%
23,809
24,126
317
1.3
%
Marketing
4,239
4,431
192
4.3
%
15,378
14,405
(973
)
(6.8
)%
Other
10,238
11,277
1,039
9.2
%
42,098
37,150
(4,948
)
(13.3
)%
Total general and administrative
55,143
55,532
389
0.7
%
222,528
195,514
(27,014
)
(13.8
)%
Interest expense
14,855
7,597
(7,258
)
(95.5
)%
34,223
31,349
(2,874
)
(9.2
)%
Income before income taxes
1,232
25,347
(24,115
)
(95.1
)%
65,321
112,473
(47,152
)
(41.9
)%
Income taxes
(1,159
)
4,569
5,728
125.4
%
14,097
23,786
9,689
40.7
%
Net income
$
2,391
$
20,778
$
(18,387
)
(88.5
)%
$
51,224
$
88,687
$
(37,463
)
(42.2
)%
Net income per common share:
Basic
$
0.26
$
2.18
$
(1.92
)
(88.1
)%
$
5.51
$
8.84
$
(3.33
)
(37.7
)%
Diluted
$
0.25
$
2.04
$
(1.79
)
(87.7
)%
$
5.30
$
8.33
$
(3.03
)
(36.4
)%
Weighted-average common shares
outstanding:
Basic
9,199
9,545
346
3.6
%
9,296
10,034
738
7.4
%
Diluted
9,411
10,177
766
7.5
%
9,656
10,643
987
9.3
%
Return on average assets (annualized)
0.6
%
6.0
%
3.3
%
7.2
%
Return on average equity (annualized)
3.1
%
29.5
%
17.0
%
31.6
%
Regional Management Corp. and
Subsidiaries
Consolidated Balance
Sheets
(Unaudited)
(dollars in thousands, except
par value amounts)
Increase (Decrease)
4Q 22
4Q 21
$
%
Assets
Cash
$
3,873
$
10,507
$
(6,634
)
(63.1
)%
Net finance receivables
1,699,393
1,426,257
273,136
19.2
%
Unearned insurance premiums
(51,008
)
(47,837
)
(3,171
)
(6.6
)%
Allowance for credit losses
(178,800
)
(159,300
)
(19,500
)
(12.2
)%
Net finance receivables, less unearned
insurance premiums and allowance for credit losses
1,469,585
1,219,120
250,465
20.5
%
Restricted cash
127,926
138,682
(10,756
)
(7.8
)%
Lease assets
34,521
28,721
5,800
20.2
%
Restricted available-for-sale
investments
20,416
-
20,416
100.0
%
Deferred tax assets, net
13,810
18,420
(4,610
)
(25.0
)%
Property and equipment
14,526
12,938
1,588
12.3
%
Intangible assets
12,122
9,517
2,605
27.4
%
Other assets
28,208
21,757
6,451
29.7
%
Total assets
$
1,724,987
$
1,459,662
$
265,325
18.2
%
Liabilities and Stockholders’
Equity
Liabilities:
Debt
$
1,355,359
$
1,107,953
$
247,406
22.3
%
Unamortized debt issuance costs
(9,512
)
(11,010
)
1,498
13.6
%
Net debt
1,345,847
1,096,943
248,904
22.7
%
Lease liabilities
36,712
30,700
6,012
19.6
%
Accounts payable and accrued expenses
33,795
49,283
(15,488
)
(31.4
)%
Total liabilities
1,416,354
1,176,926
239,428
20.3
%
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, 14,330 shares issued and 9,523 shares
outstanding at December 31, 2022 and 14,157 shares issued and 9,788
shares outstanding at December 31, 2021)
1,433
1,416
17
1.2
%
Additional paid-in capital
112,384
104,745
7,639
7.3
%
Retained earnings
345,545
306,105
39,440
12.9
%
Accumulated other comprehensive loss
(586
)
—
(586
)
(100.0
)%
Treasury stock (4,807 shares at December
31, 2022 and 4,370 shares at December 31, 2021)
(150,143
)
(129,530
)
(20,613
)
(15.9
)%
Total stockholders’ equity
308,633
282,736
25,897
9.2
%
Total liabilities and stockholders’
equity
$
1,724,987
$
1,459,662
$
265,325
18.2
%
Regional Management Corp. and
Subsidiaries
Selected Financial
Data
(Unaudited)
(dollars in thousands, except
per share amounts)
Net Finance Receivables by
Product
4Q 22
3Q 22
QoQ $
Inc (Dec)
QoQ %
Inc (Dec)
4Q 21
YoY $
Inc (Dec)
YoY %
Inc (Dec)
Small loans
$
481,605
$
480,199
$
1,406
0.3
%
$
445,023
$
36,582
8.2
%
Large loans
1,208,185
1,116,455
91,730
8.2
%
970,694
237,491
24.5
%
Retail loans
9,603
10,944
(1,341
)
(12.3
)%
10,540
(937
)
(8.9
)%
Total net finance receivables
$
1,699,393
$
1,607,598
$
91,795
5.7
%
$
1,426,257
$
273,136
19.2
%
Number of branches at period end
345
338
7
2.1
%
350
(5
)
(1.4
)%
Net finance receivables per branch
$
4,926
$
4,756
$
170
3.6
%
$
4,075
$
851
20.9
%
Averages and Yields
4Q 22
3Q 22
4Q 21
Average Net Finance
Receivables
Average Yield (1)
Average Net Finance
Receivables
Average Yield (1)
Average Net Finance
Receivables
Average Yield (1)
Small loans
$
479,777
33.5
%
$
466,087
35.5
%
$
427,586
38.1
%
Large loans
1,155,629
26.6
%
1,089,225
27.2
%
925,226
28.5
%
Retail loans
10,563
16.3
%
10,935
18.5
%
10,435
18.7
%
Total interest and fee yield
$
1,645,969
28.5
%
$
1,566,247
29.6
%
$
1,363,247
31.4
%
Total revenue yield
$
1,645,969
32.1
%
$
1,566,247
33.6
%
$
1,363,247
35.1
%
(1) Annualized interest and fee income as
a percentage of average net finance receivables.
Components of Increase in
Interest and Fee Income
4Q 22 Compared to 4Q
21
Increase (Decrease)
Volume
Rate
Volume & Rate
Total
Small loans
$
4,971
$
(4,875
)
$
(595
)
$
(499
)
Large loans
16,411
(4,436
)
(1,105
)
10,870
Retail loans
6
(61
)
(1
)
(56
)
Product mix
827
(484
)
(343
)
—
Total increase in interest and fee
income
$
22,215
$
(9,856
)
$
(2,044
)
$
10,315
Loans Originated (1)
4Q 22
3Q 22
QoQ $
Inc (Dec)
QoQ %
Inc (Dec)
4Q 21
YoY $
Inc (Dec)
YoY %
Inc (Dec)
Small loans
$
171,511
$
173,269
$
(1,758
)
(1.0
)%
$
175,898
$
(4,387
)
(2.5
)%
Large loans
297,447
243,259
54,188
22.3
%
255,828
41,619
16.3
%
Retail loans
1,390
2,145
(755
)
(35.2
)%
2,630
(1,240
)
(47.1
)%
Total loans originated
$
470,348
$
418,673
$
51,675
12.3
%
$
434,356
$
35,992
8.3
%
(1) Represents the principal balance of
loan originations and refinancings.
Other Key Metrics
4Q 22
3Q 22
4Q 21
Net credit losses
$
61,786
$
35,771
$
21,808
Percentage of average net finance
receivables (annualized)
15.0
%
9.1
%
6.4
%
Provision for credit losses
$
60,786
$
48,071
$
31,008
Percentage of average net finance
receivables (annualized)
14.8
%
12.3
%
9.1
%
Percentage of total revenue
46.0
%
36.6
%
26.0
%
General and administrative expenses
$
55,143
$
58,164
$
55,532
Percentage of average net finance
receivables (annualized)
13.4
%
14.9
%
16.3
%
Percentage of total revenue
41.8
%
44.2
%
46.5
%
Same store results (1):
Net finance receivables at period-end
$
1,625,008
$
1,552,740
$
1,400,817
Net finance receivable growth rate
14.8
%
19.2
%
23.3
%
Number of branches in calculation
320
315
330
(1)
Same store sales reflect the change in
year-over-year sales for the comparable branch base. The comparable
branch base includes those branches open for at least one year.
Contractual Delinquency by
Aging
4Q 22
3Q 22
4Q 21
Allowance for credit losses (1)
$
178,800
10.5
%
$
179,800
11.2
%
$
159,300
11.2
%
Current
1,431,502
84.2
%
1,356,134
84.4
%
1,237,165
86.7
%
1 to 29 days past due
148,048
8.7
%
135,468
8.4
%
104,201
7.3
%
Delinquent accounts:
30 to 59 days
36,208
2.2
%
32,295
2.0
%
25,283
1.9
%
60 to 89 days
31,352
1.8
%
25,375
1.6
%
20,395
1.4
%
90 to 119 days
24,293
1.4
%
21,720
1.3
%
15,962
1.0
%
120 to 149 days
16,257
1.0
%
17,503
1.1
%
12,466
0.9
%
150 to 179 days
11,733
0.7
%
19,103
1.2
%
10,785
0.8
%
Total contractual delinquency
$
119,843
7.1
%
$
115,996
7.2
%
$
84,891
6.0
%
Total net finance receivables
$
1,699,393
100.0
%
$
1,607,598
100.0
%
$
1,426,257
100.0
%
1 day and over past due
$
267,891
15.8
%
$
251,464
15.6
%
$
189,092
13.3
%
Contractual Delinquency by
Product
4Q 22
3Q 22
4Q 21
Small loans
$
43,703
9.1
%
$
49,906
10.4
%
$
39,794
8.9
%
Large loans
75,349
6.2
%
64,922
5.8
%
44,348
4.6
%
Retail loans
791
8.2
%
1,168
10.7
%
749
7.1
%
Total contractual delinquency
$
119,843
7.1
%
$
115,996
7.2
%
$
84,891
6.0
%
(1)
Includes estimated macroeconomic allowance
for credit losses of $20,700, $19,000, and $17,000 in 4Q 22, 3Q 22,
and 4Q 21, respectively.
Income Statement Quarterly
Trend
4Q 21
1Q 22
2Q 22
3Q 22
4Q 22
QoQ $
B(W)
YoY $
B(W)
Revenue
Interest and fee income
$
107,117
$
107,631
$
109,771
$
116,020
$
117,432
$
1,412
$
10,315
Insurance income, net
9,423
10,544
10,220
11,987
10,751
(1,236
)
1,328
Other income
2,944
2,673
2,880
3,445
3,833
388
889
Total revenue
119,484
120,848
122,871
131,452
132,016
564
12,532
Expenses
Provision for credit losses
31,008
30,858
45,400
48,071
60,786
(12,715
)
(29,778
)
Personnel
33,313
35,654
33,941
36,979
34,669
2,310
(1,356
)
Occupancy
6,511
5,808
6,156
5,848
5,997
(149
)
514
Marketing
4,431
3,091
4,108
3,940
4,239
(299
)
192
Other
11,277
10,547
9,916
11,397
10,238
1,159
1,039
Total general and administrative
55,532
55,100
54,121
58,164
55,143
3,021
389
Interest expense
7,597
(59
)
7,564
11,863
14,855
(2,992
)
(7,258
)
Income before income taxes
25,347
34,949
15,786
13,354
1,232
(12,122
)
(24,115
)
Income taxes
4,569
8,166
3,804
3,286
(1,159
)
4,445
5,728
Net income
$
20,778
$
26,783
$
11,982
$
10,068
$
2,391
$
(7,677
)
$
(18,387
)
Net income per common share:
Basic
$
2.18
$
2.81
$
1.29
$
1.09
$
0.26
$
(0.83
)
$
(1.92
)
Diluted
$
2.04
$
2.67
$
1.24
$
1.06
$
0.25
$
(0.81
)
$
(1.79
)
Weighted-average shares outstanding:
Basic
9,545
9,533
9,261
9,195
9,199
(4
)
346
Diluted
10,177
10,022
9,669
9,526
9,411
115
766
Balance Sheet Quarterly
Trend
4Q 21
1Q 22
2Q 22
3Q 22
4Q 22
QoQ $
Inc (Dec)
YoY $
Inc (Dec)
Total assets
$
1,459,662
$
1,497,671
$
1,547,944
$
1,606,550
$
1,724,987
$
118,437
$
265,325
Net finance receivables
$
1,426,257
$
1,446,071
$
1,525,659
$
1,607,598
$
1,699,393
$
91,795
$
273,136
Allowance for credit losses
$
159,300
$
158,800
$
167,500
$
179,800
$
178,800
$
(1,000
)
$
19,500
Debt
$
1,107,953
$
1,134,377
$
1,194,570
$
1,241,039
$
1,355,359
$
114,320
$
247,406
Other Key Metrics Quarterly
Trend
4Q 21
1Q 22
2Q 22
3Q 22
4Q 22
QoQ
Inc (Dec)
YoY
Inc (Dec)
Interest and fee yield (annualized)
31.4
%
30.0
%
29.8
%
29.6
%
28.5
%
(1.1
)%
(2.9
)%
Efficiency ratio (1)
46.5
%
45.6
%
44.0
%
44.2
%
41.8
%
(2.4
)%
(4.7
)%
Operating expense ratio (2)
16.3
%
15.4
%
14.7
%
14.9
%
13.4
%
(1.5
)%
(2.9
)%
30+ contractual delinquency
6.0
%
5.7
%
6.2
%
7.2
%
7.1
%
(0.1
)%
1.1
%
Net credit loss ratio (3)
6.4
%
8.7
%
10.0
%
9.1
%
15.0
%
5.9
%
8.6
%
Book value per share
$
28.89
$
30.47
$
31.15
$
32.18
$
32.41
$
0.23
$
3.52
(1)
General and administrative expenses as a
percentage of total revenue.
(2)
Annualized general and administrative
expenses as a percentage of average net finance receivables.
(3)
Annualized net credit losses as a
percentage of average net finance receivables.
Averages and Yields
FY 22
FY 21
Average Net Finance
Receivables
Average Yield
Average Net Finance
Receivables
Average Yield
Small loans
$
456,141
35.2
%
$
394,394
38.2
%
Large loans
1,063,365
27.1
%
808,230
28.4
%
Retail loans
10,737
17.9
%
11,259
18.3
%
Total interest and fee yield
$
1,530,243
29.5
%
$
1,213,883
31.5
%
Total revenue yield
$
1,530,243
33.1
%
$
1,213,883
35.3
%
Components of Increase in
Interest and Fee Income
FY 22 Compared to FY
21
Increase (Decrease)
Volume
Rate
Volume & Rate
Total
Small loans
$
23,582
$
(11,923
)
$
(1,866
)
$
9,793
Large loans
72,558
(10,560
)
(3,334
)
58,664
Retail loans
(96
)
(54
)
3
(147
)
Product mix
3,654
(2,362
)
(1,292
)
—
Total increase in interest and fee
income
$
99,698
$
(24,899
)
$
(6,489
)
$
68,310
Loans Originated (1)
FY 22
FY 21
FY $
Inc (Dec)
FY %
Inc (Dec)
Small loans
$
653,155
$
602,613
$
50,542
8.4
%
Large loans
979,557
856,699
122,858
14.3
%
Retail loans
8,596
8,275
321
3.9
%
Total loans originated
$
1,641,308
$
1,467,587
$
173,721
11.8
%
(1) Represents the principal balance of
loan originations and refinancings.
Other Key Metrics
FY 22
FY 21
Net credit losses
$
165,615
$
79,715
Percentage of average net finance
receivables
10.8
%
6.6
%
Provision for credit losses
$
185,115
$
89,015
Percentage of average net finance
receivables
12.1
%
7.3
%
Percentage of total revenue
36.5
%
20.8
%
General and administrative expenses
$
222,528
$
195,514
Percentage of average net finance
receivables
14.5
%
16.1
%
Percentage of total revenue
43.9
%
45.6
%
Non-GAAP Financial Measures
In addition to financial measures presented in accordance with
generally accepted accounting principles (“GAAP”), this press
release contains certain non-GAAP financial measures. The company’s
management utilizes non-GAAP measures as additional metrics to aid
in, and enhance, its understanding of the company’s financial
results. Tangible equity and the funded debt-to-tangible equity
ratio are non-GAAP measures that adjust GAAP measures to exclude
intangible assets. Management uses these equity measures to
evaluate and manage the company’s capital and leverage position.
The company also believes that these equity measures are commonly
used in the financial services industry and provide useful
information to users of the company’s financial statements in the
evaluation of its capital and leverage position. Adjusted net
income and adjusted diluted net income per common share are
non-GAAP measures that adjust GAAP measures to exclude the impacts
of the non-performing loan sale. Management uses these adjusted
measures to evaluate and manage the company's performance by
excluding certain material items that may not be representative of
the company’s financial results. As a result, the company also
believes that these adjusted measures will aid users of its
financial statements in the evaluation of its operating
performance.
This non-GAAP financial information should be considered in
addition to, not as a substitute for or superior to, measures of
financial performance prepared in accordance with GAAP. In
addition, the company’s non-GAAP measures may not be comparable to
similarly titled non-GAAP measures of other companies. The
following tables provide a reconciliation of GAAP measures to
non-GAAP measures.
4Q 22
Debt
$
1,355,359
Total stockholders' equity
308,633
Less: Intangible assets
12,122
Tangible equity (non-GAAP)
$
296,511
Funded debt-to-equity ratio
4.4
x
Funded debt-to-tangible equity ratio
(non-GAAP)
4.6
x
4Q 22 Non-GAAP
Reconciliation
GAAP
Adjustments
Non-GAAP
Total revenue (1)
$
132,016
$
2,185
$
134,201
Provision for credit losses (2)
$
60,786
$
1,278
$
62,064
Income taxes
$
(1,159
)
$
(807
)
$
(1,966
)
Net income
$
2,391
$
2,656
$
5,047
Diluted net income per common share
$
0.25
$
0.29
$
0.54
(1)
Total revenue adjustments include revenue
reversals pertaining to the non-performing loan sale.
(2)
Provision for credit losses adjustment
include impacts in 4Q 22 due to the non-performing loan sale.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230208005775/en/
Investor Relations Garrett Edson, (203) 682-8331
investor.relations@regionalmanagement.com
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