Regional Management Corp.
For the period ended Mar 31, 2025. Filed May 2, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 2, 2025
RM$36.25-3.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-08.
0000950170-24-124156
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-02.
0000950170-25-062837
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 130 previous paragraphs and 106 current paragraphs.
54 unchanged; 45 reworded; 7 added; 24 removed; 7 previous and 0 current paragraphs rearranged.
Tables are not compared: 16 previous and 12 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (7)
Current report
We continue to execute our barbell strategy of growth in our higher-margin loan portfolio while balancing the associated risk with growth in our high-quality, auto-secured loan portfolio. Our portfolio of loans with an annual percentage rate greater than 36% grew by $59.1 million, or 20.6%, year-over-year, while our auto-secured loan portfolio grew by $59.0 million, or 37.0%, year-over-year.
Current report
Delinquency Performance. Our delinquency rate remained consistent at 7.1% as of both March 31, 2025, and the prior-year period. Our delinquency rate as of March 31, 2025 included an estimated 10 basis point increase related to hurricane activity in the third quarter of 2024 and an estimated 10 basis point increase from growth in our higher-margin small loan portfolio.
Current report
Operating Expense Ratio. Our operating expense ratio increased by 0.3% to 14.0% during the three months ended March 31, 2025, from 13.7% during the prior-year period. Our operating expense ratio as of March 31, 2025 included an estimated 40 basis point increase related to a change in the pattern of incentive expense timing.
Current report
Income Taxes. Income taxes decreased $2.6 million, or 54.4%, to $2.2 million during the three months ended March 31, 2025, from $4.7 million during the prior-year period. The decrease was primarily due to a $10.8 million decrease in income before income taxes compared to the prior-year period. Our effective tax rates were 23.5% and 23.7% for the three months ended March 31, 2025 and 2024, respectively.
Current report
Dividends and Stock Repurchases.
Current report
In December 2024, we announced that the Board had authorized a $30.0 million stock repurchase program. The authorization was effective immediately and extends through December 31, 2026. As of March 31, 2025, we had repurchased 0.3 million shares of common stock at a total cost of $10.1 million, including commissions and estimated excise taxes.
Current report
(1) In March 2025, we and RMR III exercised the right to make an optional principal repayment in full of RMIT 2020-1, and in connection with such prepayment, the securitization terminated. The restricted cash collections for RMIT 2020-1 totaled $273 thousand as of March 31, 2025.
Removed paragraphs (24)
Previous report
As inflation accelerated and geopolitical stability began to deteriorate in the fourth quarter of 2021, we began to proactively tighten our credit models. Ongoing inflationary pressures, higher interest rates, and geopolitical events outside of the U.S. continue to create economic uncertainty. We have therefore continued to maintain tighter underwriting guidelines. However, more recently, due to moderating inflation and expectations for an improving economic environment, we have prudently increased the growth in our higher-margin small loan portfolio. We grew the small loan portfolio by $50.6 million, or 10.7%, year-over-year. To balance the risk associated with the growth in our higher-margin small loan portfolio, we continue to deploy a barbell strategy of originating higher-credit-quality, auto-secured loans.
Previous report
Interest and Fee Income. Interest and fee income increased $8.9 million, or 7.1%, to $133.9 million during the three months ended September 30, 2024, from $125.0 million during the prior-year period. The increase was primarily due to a 4.1% increase in average net finance receivables and a 0.9% increase in annualized average yield. The increase in yield was due to price increases, growth in our higher-margin small loan business, and improved credit performance.
Previous report
Allowance for Credit Losses. We evaluate delinquency and losses in each of our loan products in establishing the allowance for credit losses. During the three months ended September 30, 2024, and the prior-year period, the allowance for credit losses included builds of $6.7 million and $3.5 million, respectively. We grew our loan portfolio sequentially by $46.0 million and $62.1 million during the three months ended September 30, 2024 and the prior-year period, respectively, which required increases to our provision for credit losses of $4.6 million and $6.3 million. The three months ended September 30, 2024 also included a $2.1 million reserve related to third quarter hurricane activity. The allowance for credit losses as a percentage of net finance receivables remained consistent at 10.6% as of September 30, 2024 and the prior-year period.
Previous report
Delinquency Performance. Our contractual delinquency as a percentage of net finance receivables improved to 6.9% as of September 30, 2024, from 7.3% during the prior-year period. Our contractual delinquency as of September 30, 2024 included an estimated 40 basis point benefit from special borrower assistance programs related to hurricane activity and an estimated 20 basis point increase from growth in our higher-margin small loan business.
Previous report
Operating Expense Ratio. Our operating expense ratio decreased by 0.5% to 13.9% during the three months ended September 30, 2024, from 14.4% during the prior-year period.
Previous report
Interest Expense. Interest expense increased $2.4 million, or 14.2%, to $19.4 million during the three months ended September 30, 2024, from $16.9 million during the prior-year period. The increase was primarily due to an increase in our average cost of debt as well as an increase in the average balance of our debt facilities. The annualized average cost of debt increased 0.58% to 5.58% during the three months ended September 30, 2024, from 5.00% during the prior-year period. The average balance of our debt facilities increased $30.0 million, or 2.2%, and the ending balance remained consistent at $1.4 billion as of the periods ended September 30, 2024 and September 30, 2023, respectively.
Previous report
Income Taxes. Income taxes increased $0.4 million, or 20.5%, to $2.5 million during the three months ended September 30, 2024, from $2.1 million during the prior-year period. The increase was primarily due to discrete tax benefits as a result of the re-establishment of deferred tax assets for certain state net operating losses during the prior-year period, partially offset by a $0.7 million decrease in income before income taxes compared to the prior-year period. Our effective tax rates were 24.6% and 19.1% for the three months ended September 30, 2024 and the prior-year period, respectively. The increase in the effective tax rate was primarily related to the re-establishment of deferred tax assets in the prior-year period.
Previous report
Comparison of the Nine Months Ended September 30, 2024, versus the Nine Months Ended September 30, 2023
Previous report
Net Income. Net income increased $7.8 million, or 33.1%, to $31.3 million during the nine months ended September 30, 2024, from $23.5 million during the prior-year period. The increase was due to an increase in revenue of $23.9 million, partially offset by an increase in interest expense of $4.8 million, an increase in general and administrative expenses of $4.7 million, an increase in provision for credit losses of $3.4 million, and an increase in income taxes of $3.2 million.
Previous report
Revenue. Total revenue increased $23.9 million, or 5.8%, to $433.7 million during the nine months ended September 30, 2024, from $409.7 million during the prior-year period. The components of revenue are explained in greater detail below.
Previous report
Total originations increased to $1.2 billion during the nine months ended September 30, 2024, from $1.1 billion during the prior-year period. Origination volume increased during the nine months ended September 30, 2024 compared to the prior-year period due to an increase in small loan convenience checks. The following table represents the principal balance of loans originated and refinanced:
Previous report
Other Income. Other income increased $1.4 million, or 11.3%, to $14.1 million during the nine months ended September 30, 2024, from $12.7 million during the prior-year period, primarily due to higher late charges of $0.7 million associated with portfolio growth, an increase in sales of our auto club product of $0.3 million, higher interest income of $0.2 million from cash reserves, and higher investment income from securities of $0.1 million.
Previous report
Provision for Credit Losses. Our provision for credit losses increased $3.4 million, or 2.3%, to $154.6 million during the nine months ended September 30, 2024, from $151.1 million during the prior-year period. Net credit losses increased $4.8 million, partially offset by a decrease of $1.4 million in the allowance for credit losses, in each case compared to the prior-year period. The provision for credit losses is explained in greater detail below.
Previous report
Net Credit Losses. Net credit losses increased $4.8 million, or 3.3%, to $149.9 million during the nine months ended September 30, 2024, from $145.0 million during the prior-year period. The increase was primarily due to higher average net finance receivables. The net credit loss ratio was 11.3% during the nine months ended September 30, 2024, compared to 11.4% during the prior-year period. Our net credit loss ratio during the nine months ended September 30, 2024 was inclusive of a 10 basis point increase from growth in our higher-margin small loan business. Additionally, our net credit loss ratios during the nine months ended September 30, 2024 and September 30, 2023 were inclusive of estimated 90 basis point and 100 basis point benefits from accelerated charge-offs in each of the fourth quarters of 2023 and 2022, respectively, attributable to the loan sales.
Previous report
Delinquency Performance. Our contractual delinquency as a percentage of net finance receivables improved to 6.9% as of September 30, 2024, from 7.3% in the prior-year period. Our contractual delinquency as of September 30, 2024 included an estimated 40 basis point benefit from special borrower assistance programs related to hurricane activity and an estimated 20 basis point increase from growth in our higher-margin small loan business.
Previous report
General and Administrative Expenses. Our general and administrative expenses increased $4.7 million, or 2.7%, to $183.1 million during the nine months ended September 30, 2024, from $178.3 million during the prior-year period. The absolute dollar increase in general and administrative expenses is explained in greater detail below.
Previous report
Personnel. The largest component of general and administrative expenses was personnel expense, which decreased $1.6 million, or 1.4%, to $113.2 million during the nine months ended September 30, 2024, from $114.8 million during the prior-year period. The decrease was primarily due to higher capitalized loan origination costs which reduce personnel expenses of $1.2 million and lower incentives of $0.3 million, compared to the prior-year period.
Previous report
Occupancy. Occupancy expenses increased $0.3 million, or 1.7%, to $19.1 million during the nine months ended September 30, 2024, from $18.8 million during the prior-year period. The increase was primarily due to increased rent expense of $0.6 million, partially offset by decreased telecommunications expense of $0.2 million.
Previous report
Marketing. Marketing expenses increased $2.9 million, or 25.9%, to $14.2 million during the nine months ended September 30, 2024, from $11.3 million during the prior-year period. The increase was primarily due to increased activity in our direct mail campaigns to support growth.
Previous report
Other Expenses. Other expenses increased $3.1 million, or 9.3%, to $36.5 million during the nine months ended September 30, 2024, from $33.4 million during the prior-year period. The increase was primarily due to our investment in digital and technological capabilities of $1.1 million and increase in collections expense of $0.8 million, compared to the prior-year period. The prior-year period included insurance settlement proceeds of $1.0 million which reduced other expenses. Additionally, we often experience increases in other expenses including legal expenses, bank fees, and certain professional expenses as we grow our loan portfolio and expand our market footprint.
Previous report
Operating Expense Ratio. Our operating expense ratio decreased by 0.2% to 13.8% during the nine months ended September 30, 2024, from 14.0% during the prior-year period.
Previous report
Income Taxes. Income taxes increased $3.2 million, or 47.5%, to $10.0 million during the nine months ended September 30, 2024, from $6.8 million during the prior-year period. The increase was primarily due to a $11.0 million increase in income before income taxes compared to the prior-year period and a prior-year period increase in discrete tax benefits, including the re-establishment of deferred tax assets for certain state net operating losses. Our effective tax rates were 24.2% and 22.4% for the nine months ended September 30, 2024 and the prior-year period, respectively. The increase in the effective tax rate was primarily related to the re-establishment of deferred tax assets in the prior-year period.
Previous report
Dividends.
Previous report
(1) RMR III retained $16.3 million of Class C fixed-rate, asset-backed notes that may be sold in whole or in part.
Reworded paragraphs (45)
Previous wording
The following discussion and analysis should be read in conjunction with, and is qualified in its entirety by reference to, our unaudited consolidated financial statements and the related notes that appear elsewhere in this Quarterly Report on Form 10-Q. These discussions contain forward-looking statements that reflect our current expectations and that include, but are not limited to, statements concerning our strategies, future operations, future financial position, future revenues, projected costs, expectations regarding demand and acceptance for our financial products, growth opportunities and trends in the market in which we operate, prospects, and plans and objectives of management. The words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “predicts,” “will,” “would,” “should,” “could,” “potential,” “continue,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements involve risks and uncertainties that could cause actual results, events, and/or performance to differ materially from the plans, intentions, and expectations disclosed in the forward-looking statements. Such risks and uncertainties include, without limitation, the risks set forth in our filings with the SEC, including our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (which was filed with the SEC on February 22, 2024), our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2024 (which was filed with the SEC on May 3, 2024), our Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2024 (which was filed with the SEC on August 2, 2024), and this Quarterly Report on Form 10-Q. The forward-looking information we have provided in this Quarterly Report on Form 10-Q pursuant to the safe harbor established under the Private Securities Litigation Reform Act of 1995 should be evaluated in the context of these factors. Forward-looking statements speak only as of the date they were made, and we undertake no obligation to update or revise such statements, except as required by the federal securities laws.
Current wording
The following discussion and analysis should be read in conjunction with, and is qualified in its entirety by reference to, our unaudited consolidated financial statements and the related notes that appear elsewhere in this Quarterly Report on Form 10-Q. These discussions contain forward-looking statements that reflect our current expectations and that include, but are not limited to, statements concerning our strategies, future operations, future financial position, future revenues, projected costs, expectations regarding demand and acceptance for our financial products, growth opportunities and trends in the market in which we operate, prospects, and plans and objectives of management. The words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “predicts,” “will,” “would,” “should,” “could,” “potential,” “continue,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements involve risks and uncertainties that could cause actual results, events, and/or performance to differ materially from the plans, intentions, and expectations disclosed in the forward-looking statements. Such risks and uncertainties include, without limitation, the risks set forth in our filings with the SEC, including our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (which was filed with the SEC on February 21, 2025) and this Quarterly Report on Form 10-Q. The forward-looking information we have provided in this Quarterly Report on Form 10-Q pursuant to the safe harbor established under the Private Securities Litigation Reform Act of 1995 should be evaluated in the context of these factors. Forward-looking statements speak only as of the date they were made, and we undertake no obligation to update or revise such statements, except as required by the federal securities laws.
Previous wording
We are a diversified consumer finance company that provides installment loan products primarily to customers with limited access to consumer credit from banks, thrifts, credit card companies, and other lenders. As of September 30, 2024, we operate under the name “Regional Finance” online and in 340 branch locations in 19 states across the United States, serving 557,400 active accounts. Most of our 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. We source our loans through our omni-channel platform, which includes our branches, centrally-managed direct mail campaigns, digital partners, and our consumer website. We operate an integrated branch model in which nearly all loans, regardless of origination channel, are serviced through our branch network with the support of centralized sales, underwriting, service, collections, and administrative teams. This model provides us with frequent contact with our customers, which we believe improves our credit performance and customer loyalty. Our goal is to consistently grow our finance receivables and to soundly manage our portfolio risk, while providing our customers with attractive and easy-to-understand loan products that serve their varied financial needs.
Current wording
We are a diversified consumer finance company that provides installment loan products primarily to customers with limited access to consumer credit from banks, thrifts, credit card companies, and other lenders. As of March 31, 2025, we operate under the name “Regional Finance” online and in 353 branch locations in 19 states across the United States, serving 575,000 active accounts. Most of our 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. We source our loans through our omni-channel platform, which includes our branches, centrally-managed direct mail campaigns, digital partners, and our consumer website. We operate an integrated branch model in which nearly all loans, regardless of origination channel, are serviced through our branch network with the support of centralized sales, underwriting, service, collections, and administrative teams. This model provides us with frequent contact with our customers, which we believe improves our credit performance and customer loyalty. Our goal is to consistently grow our finance receivables and to soundly manage our portfolio risk, while providing our customers with attractive and easy-to-understand loan products that serve their varied financial needs.
Previous wording
Large Loans (>$2,500) – As of September 30, 2024, we had 252.2 thousand large installment loans outstanding, representing $1.3 billion in net finance receivables. This included 65.7 thousand large loan convenience checks, representing $189.9 million in net finance receivables.
Current wording
Large Loans (>$2,500) – As of March 31, 2025, we had 262.1 thousand large installment loans outstanding, representing $1.3 billion in net finance receivables. This included 71.8 thousand large loan convenience checks, representing $204.0 million in net finance receivables.
Previous wording
Small Loans (≤$2,500) – As of September 30, 2024, we had 303.9 thousand small installment loans outstanding, representing $524.8 million in net finance receivables. This included 160.1 thousand small loan convenience checks, representing $246.2 million in net finance receivables.
Current wording
Small Loans (≤$2,500) – As of March 31, 2025, we had 312.2 thousand small installment loans outstanding, representing $543.8 million in net finance receivables. This included 168.6 thousand small loan convenience checks, representing $261.0 million in net finance receivables.
Previous wording
Retail Loans – As of September 30, 2024, we had 1.3 thousand retail purchase loans outstanding, representing $1.5 million in net finance receivables.
Current wording
Retail Loans – As of March 31, 2025, we had 0.7 thousand retail purchase loans outstanding, representing $0.7 million in net finance receivables.
Previous wording
Small and large installment loans are our core products and will be the drivers of future growth. We ceased accepting applications for our retail loan product offering in November 2022, to focus on growing our core loan portfolio. We continue to own and service our existing portfolio of retail loans. Our primary sources of revenue are interest and fee income from our loan products, of which interest and fees relating to small and large installment loans are the largest component. In addition to interest and fee income from loans, we derive revenue from optional insurance products purchased by customers of our direct loan products.
Current wording
Large and small installment loans are our core products and will be the drivers of future growth. We ceased accepting applications for our retail loan product offering in November 2022 to focus on growing our core loan portfolio. We continue to own and service our existing portfolio of retail loans. Our primary sources of revenue are interest and fee income from our loan products, of which interest and fees relating to large and small installment loans are the largest component. In addition to interest and fee income from loans, we earn revenue from optional insurance products purchased by customers of our direct loan products.
Previous wording
We continually assess the macroeconomic environment in which we operate in order to appropriately and timely adapt to current market conditions. Macroeconomic factors, including, but not limited to, inflationary pressures, higher interest rates, and impacts from current geopolitical events outside the U.S., may affect our business, liquidity, financial condition, and results of operations.
Current wording
We continually assess the macroeconomic environment in which we operate in order to adapt appropriately and timely to current market conditions. Macroeconomic factors, including, but not limited to, inflationary pressures, higher interest rates, tariffs, and impacts from current geopolitical events outside the U.S., may affect our business, liquidity, financial condition, and results of operations.
Previous wording
Our allowance for credit losses was 10.6% of net finance receivables as of September 30, 2024. Our contractual delinquency as a percentage of net finance receivables was 6.9% as of September 30, 2024, down from 7.3% as of the prior-year period. Going forward, macroeconomic conditions may necessitate changes to the macroeconomic assumptions within our forecast and to our credit loss performance outlook, either of which could lead to further changes in our allowance for credit losses, reserve rate, and provision for credit losses expense.
Current wording
Our allowance for credit losses was 10.5% of net finance receivables as of March 31, 2025. Going forward, macroeconomic conditions may necessitate changes to the macroeconomic assumptions within our forecast and to our credit loss performance outlook, either of which could lead to further changes in our allowance for credit losses, reserve rate, and provision for credit losses expense.
Previous wording
We proactively diversified our funding over the past few years and continue to maintain a strong liquidity profile. As of September 30, 2024, we had $154.7 million of available liquidity, comprised of unrestricted cash on hand and immediate availability to draw down cash from our revolving credit facilities. In addition, we had $482.2 million of unused capacity on our revolving credit facilities (subject to the borrowing base) as of September 30, 2024. We believe our liquidity position provides substantial runway to support the fundamental operations of our business and to fund future growth.
Current wording
We have proactively diversified our funding over the past few years and continue to maintain a strong liquidity profile. As of March 31, 2025, we had $129.3 million of available liquidity, comprised of unrestricted cash on hand and immediate availability to draw down cash from our revolving credit facilities. In addition, we had $640.7 million of unused capacity on our revolving credit facilities (subject to the borrowing base) as of March 31, 2025. We believe our liquidity position provides substantial runway to support the fundamental operations of our business and to fund future growth.
Previous wording
Growth in Loan Portfolio. The revenue that we generate from interest and fees is largely driven by the balance of loans that we originate. Average net finance receivables were $1.8 billion for the first nine months of 2024 and $1.7 billion for the prior-year period. We source our loans through our branches, centrally-managed direct mail program, digital partners, and our consumer website. The majority of our loans, regardless of origination channel, are serviced through our branches. Increasing the number of loans per branch and growing our state footprint allows us to increase the number of customers we are able to serve. We continue to assess our branch network for clear opportunities to add additional branches in new and existing states where it is favorable for us to conduct business or consolidate operations into larger branches within close geographic proximity. This branch optimization is consistent with our omni-channel strategy and builds upon our recent successes in entering new states with a lighter branch footprint, while still providing customers with best-in-class service.
Current wording
Growth in Loan Portfolio. The revenue that we generate from interest and fees is largely driven by the balance of loans that we originate. We source our loans through our branches, centrally-managed direct mail program, digital partners, and our consumer website. The majority of our loans, regardless of origination channel, are serviced through our branches. Increasing the number of loans per branch and growing our state footprint allows us to increase the number of customers we are able to serve. We continue to assess our branch network for clear opportunities to add branches in new and existing states where it is favorable for us to conduct business or consolidate operations into larger branches within close geographic proximity. This branch optimization is consistent with our omni-channel strategy and builds upon our recent successes in entering new states with a lighter branch footprint, while still providing customers with best-in-class service. As we consider our growth rate, we not only consider the health of the consumer, the strength of the economy, and the credit performance of our portfolio, but we also balance our commitment to deliver strong short-term results for investors while also generating the portfolio growth that will fuel our success and returns over the long-term. As we grow our portfolio, we are required to reserve for expected lifetime credit losses at the origination of each loan, which reduces net income. The related revenue benefits are recognized over the life of each loan.
Previous wording
Interest Rates. Our costs of funds are affected by changes in interest rates, as the interest rates that we pay on certain of our credit facilities are variable. As a component of our strategy to manage the interest rate risk associated with future interest payments on our variable-rate debt, a majority of our funding was held at a fixed rate as of September 30, 2024, representing 82% of our total debt.
Current wording
Interest Rates. Our costs of funds are affected by changes in interest rates, as the interest rates that we pay on certain of our credit facilities are variable. As a component of our strategy to manage the interest rate risk associated with future interest payments on our variable-rate debt, a majority of our funding was held at a fixed rate as of March 31, 2025, representing 90% of our total debt.
Previous wording
As reinsurer, we maintain restricted reserves comprised of restricted cash and restricted available-for-sale investments for life insurance claims in an amount determined by the unaffiliated insurance company. As of September 30, 2024, the restricted reserves consisted of $20.9 million of unearned premium reserves and $1.1 million of unpaid claims reserves. The unaffiliated insurance company maintains the reserves for non-life claims.
Current wording
As reinsurer, we maintain restricted reserves comprised of restricted cash and restricted AFS investments for life insurance in an amount determined by the unaffiliated insurance company. As of March 31, 2025, the restricted reserves consisted of $21.2 million of unearned premium reserves and $1.2 million of unpaid claims reserves. The unaffiliated insurance company maintains the reserves for non-life claims.
Previous wording
Other Income. Our other income consists primarily of late charges assessed on customers who fail to make a payment within a specified number of days following the due date of the payment. In addition, interest income from restricted cash, commissions earned from the sale of an auto club product, and investment income from restricted available-for-sale securities are included in other income.
Current wording
Other Income. Our other income consists primarily of late charges assessed on customers who fail to make a payment within a specified number of days following the due date of the payment. In addition, interest income from restricted cash, commissions earned from the sale of club membership products, and investment income from restricted AFS securities are included in other income.
Previous wording
Large Loans (>$2,500)– Large loans outstanding increased by $21.5 million, or 1.7%, remaining consistent at $1.3 billion as of the periods ending September 30, 2024 and September 30, 2023. The increase was due to growth in our auto-secured loan portfolio, the growth of receivables in branches opened during 2023 and 2024, and the transition of small loan customers to large loans.
Current wording
Large Loans (>$2,500)– Large loans outstanding increased by $95.2 million, or 7.6%, to over $1.3 billion as of the periods ending March 31, 2025, compared to the period ended March 31, 2024. The increase was due to growth in our auto-secured loan portfolio, the growth of receivables in branches opened during 2024 and 2025, and the transition of small loan customers to large loans.
Previous wording
Small Loans (≤$2,500)– Small loans outstanding increased by $50.6 million, or 10.7%, to $524.8 million at September 30, 2024, from $474.2 million at September 30, 2023. The increase was due to increased marketing, growth in our higher-margin loan portfolio, and growth of receivables in branches opened during 2023 and 2024, partially offset by the transition of small loan customers to large loans.
Current wording
Small Loans (≤$2,500)– Small loans outstanding increased by $53.0 million, or 10.8%, to $543.8 million at March 31, 2025, from $490.8 million at March 31, 2024. The increase was due to marketing, growth in our higher-margin loan portfolio, and growth of receivables in branches opened during 2024 and 2025, partially offset by the transition of small loan customers to large loans.
Previous wording
Retail Loans– Retail loans outstanding decreased $3.4 million, or 69.2%, to $1.5 million at September 30, 2024, from $4.9 million at September 30, 2023. We ceased accepting applications for our retail loan product offering as of November 2022 to focus on growing our core loan portfolio.
Current wording
Retail Loans– Retail loans outstanding decreased $2.1 million, or 75.0%, to $0.7 million at March 31, 2025, from $2.8 million at March 31, 2024. We ceased accepting applications for our retail loan product offering as of November 2022 to focus on growing our core loan portfolio.
Previous wording
Net Income. Net income decreased $1.2 million, or 13.1%, to $7.7 million during the three months ended September 30, 2024, from $8.8 million during the prior-year period. The decrease was due to an increase in provision for credit losses of $3.4 million, an increase in interest expense of $2.4 million, an increase in general and administrative expenses of $0.4 million, and an increase in income taxes of $0.4 million, partially offset by an increase in revenue of $5.5 million.
Current wording
Net Income. Net income decreased $8.2 million, or 53.9%, to $7.0 million during the three months ended March 31, 2025, from $15.2 million during the prior-year period. The decrease was due to an increase in provision for credit losses of $11.6 million, an increase in general and administrative expenses of $5.6 million, and an increase in interest expense of $2.3 million, partially offset by an increase in revenue of $8.7 million and a decrease in income taxes of $2.6 million.
Previous wording
Revenue. Total revenue increased $5.5 million, or 3.9%, to $146.3 million during the three months ended September 30, 2024, from $140.9 million during the prior-year period. The components of revenue are explained in greater detail below.
Current wording
Revenue. Total revenue increased $8.7 million, or 6.0%, to $153.0 million during the three months ended March 31, 2025, from $144.3 million during the prior-year period. The components of revenue are explained in greater detail below.
Previous wording
Interest and Fee Income. Interest and fee income increased $27.1 million, or 7.5%, to $390.6 million during the nine months ended September 30, 2024, from $363.5 million during the prior-year period. The increase was primarily due to a 4.2% increase in average net finance receivables and a 0.9% increase in annualized average yield. The increase in yield was due to price increases, growth in our higher-margin small loan business, and improved credit performance. The nine months ended September 30, 2024 and September 30, 2023 included reductions in revenue reversals of an estimated $1.7 million and $1.9 million attributable to the loan sales that occurred during the fourth quarters of 2023 and 2022, respectively.
Current wording
Interest and Fee Income. Interest and fee income increased $7.7 million, or 6.0%, to $136.6 million during the three months ended March 31, 2025, from $128.8 million during the prior-year period. The increase was primarily due to a 7.4% increase in average net finance receivables, partially offset by a 0.4% decrease in annualized average yield. The decrease in yield was primarily due to the estimated 50 basis point benefit in the prior-year period related to the fourth quarter 2023 loan sale. The three months ended March 31, 2024 included reductions in revenue reversals of an estimated $1.7 million attributable to the fourth quarter 2023 loan sale.
Previous wording
Total originations increased to $426.2 million during the three months ended September 30, 2024, from $425.1 million during the prior-year period. The following table represents the principal balance of loans originated and refinanced:
Current wording
Total originations increased to $392.1 million during the three months ended March 31, 2025, from $326.4 million during the prior-year period. The following table represents the principal balance of loans originated and refinanced:
Previous wording
Insurance Income, Net. Insurance income, net decreased $4.6 million, or 13.8%, to $28.9 million during the nine months ended September 30, 2024, from $33.5 million during the prior-year period. During both the nine months ended September 30, 2024 and the prior-year period, personal property insurance premiums represented the largest component of aggregate earned insurance premiums. Life insurance claims expense represented the largest component of direct insurance expenses for both the nine months ended September 30, 2024 and the prior-year period.
Current wording
Insurance Income, Net. Insurance income, net increased $0.3 million, or 2.9% to $11.3 million during the three months ended March 31, 2025, from $11.0 million during the prior-year period. During both the three months ended March 31, 2025 and 2024, personal property insurance premiums represented the largest component of aggregate earned insurance premiums. During both the three months ended March 31, 2025 and 2024, life insurance claims expense represented the largest component of direct insurance expenses.
Previous wording
Earned premiums decreased by $0.7 million, and claims, reserves, and certain direct expenses increased by $3.3 million, in each case compared to the prior-year period. The decrease in earned premiums was primarily due to our strategic shifts in product and geographic mix which resulted in fewer active policies. The increase in claims, reserves, and certain direct expenses was primarily due to an increase in personal property insurance claims and reserves of $3.5 million related to hurricane activity.
Current wording
Earned premiums decreased by $0.1 million, and claims, reserves, and certain direct expenses decreased by $0.5 million, in each case compared to the prior-year period. The decrease in both insurance premiums and claims, reserves, and direct expenses was primarily due to our strategic shifts in product and geographic mix which resulted in fewer active policies.
Previous wording
Other Income. Other income increased $0.5 million, or 11.3%, to $5.0 million during the three months ended September 30, 2024, from $4.5 million during the prior-year period, primarily due to higher late charges of $0.2 million associated with portfolio growth, an increase in sales of our auto club product of $0.1 million, and higher investment income of $0.1 million.
Current wording
Other Income. Other income increased $0.6 million, or 13.3%, to $5.1 million during the three months ended March 31, 2025, from $4.5 million during the prior-year period, primarily due to higher late charges of $0.4 million associated with portfolio growth and an increase in sales of our club membership products of $0.3 million.
Previous wording
Provision for Credit Losses. Our provision for credit losses increased $3.4 million, or 6.7%, to $54.3 million during the three months ended September 30, 2024, from $50.9 million during the prior-year period. The increase was due to a change in provision expense of $3.2 million and an increase in net credit losses of $0.2 million, in each case compared to the prior-year period. The increase in the provision for credit losses is explained in greater detail below.
Current wording
Provision for Credit Losses. Our provision for credit losses increased $11.6 million, or 24.9%, to $58.0 million during the three months ended March 31, 2025, from $46.4 million during the prior-year period. The increase was due to an increase in net credit losses of $11.7 million, partially offset by the change in provision expense of $0.1 million, in each case compared to the prior-year period. The increase in the provision for credit losses is explained in greater detail below.
Previous wording
Allowance for Credit Losses. We evaluate delinquency and losses in each of our loan products in establishing the allowance for credit losses. During the nine months ended September 30, 2024, and the prior-year period, the allowance for credit losses included builds of $4.7 million and $6.1 million, respectively. The $4.7 million build was inclusive of a $2.1 million reserve related to third quarter hurricane activity. The allowance for credit losses as a percentage of net finance receivables remained consistent at 10.6% as of September 30, 2024, and the prior-year period.
Current wording
Allowance for Credit Losses. We evaluate delinquency and losses in each of our loan products in establishing the allowance for credit losses. During the three months ended March 31, 2025 and 2024, the allowance for credit losses included releases of $0.4 million and $0.3 million, respectively. The allowance for credit losses as a percentage of net finance receivables decreased to 10.5% as of March 31, 2025, from 10.7% as of March 31, 2024 due to changes in estimated future macroeconomic impacts on credit losses.
Previous wording
Net Credit Losses. Net credit losses increased $0.2 million, or 0.5%, to $47.6 million during the three months ended September 30, 2024, from $47.4 million during the prior-year period. The increase was primarily due to higher average net finance receivables. The net credit loss ratio was 10.6% during the three months ended September 30, 2024, compared to 11.0% during the prior-year period. Our net credit loss ratio during the three months ended September 30, 2024 was inclusive of a 30 basis point increase from growth in our higher-margin small loan business.
Current wording
Net Credit Losses. Net credit losses increased $11.7 million, or 25.0%, to $58.4 million during the three months ended March 31, 2025, from $46.7 million during the prior-year period. Our net credit losses during the prior-year period were inclusive of an estimated $12.2 million benefit from accelerated charge-offs in the fourth quarter of 2023 attributable to the fourth quarter 2023 loan sale. The net credit loss rate was 12.4% during the three months ended March 31, 2025, compared to 10.6% during the prior-year period. Our net credit loss rate during the three months ended March 31, 2025 was inclusive of a 30 basis point increase from our higher margin portfolio, and during the three months ended March 31, 2024 it was inclusive of a 270 basis point decrease related to the fourth quarter 2023 loan sale.
Previous wording
General and Administrative Expenses. Our general and administrative expenses increased $0.4 million, or 0.6%, to $62.5 million during the three months ended September 30, 2024, from $62.1 million during the prior-year period. The absolute dollar increase in general and administrative expenses is explained in greater detail below.
Current wording
General and Administrative Expenses. Our general and administrative expenses increased $5.6 million, or 9.3%, to $66.0 million during the three months ended March 31, 2025, from $60.4 million during the prior-year period. The absolute dollar increase in general and administrative expenses is explained in greater detail below.
Previous wording
Personnel. The largest component of general and administrative expenses was personnel expense, which decreased $1.5 million, or 3.8%, to $38.3 million during the three months ended September 30, 2024, from $39.8 million during the prior-year period. The decrease was driven by decreased labor costs of $0.8 million, capitalized loan origination costs which reduce personnel expenses of $0.3 million, lower incentives of $0.1 million, and lower recruiter fees of $0.1 million, in each case compared to the prior-year period.
Current wording
Personnel. The largest component of general and administrative expenses was personnel expense, which increased $3.3 million, or 8.8%, to $41.1 million during the three months ended March 31, 2025, from $37.8 million during the prior-year period. The increase was driven by an increase in incentive costs of $1.9 million ($1.7 million due to a change in expense timing) and increased labor costs of $1.7 million partially related to opening 17 new branches since the prior-year period. This increase was partially offset by higher capitalized loan origination costs, which reduce personnel expenses, of $0.6 million.
Previous wording
Occupancy. Occupancy expenses increased $0.2 million, or 3.7%, to $6.6 million during the three months ended September 30, 2024, from $6.3 million during the prior-year period primarily due to increased rent of $0.2 million.
Current wording
Occupancy. Occupancy expenses increased $0.5 million, or 8.3%, to $6.9 million during the three months ended March 31, 2025, from $6.4 million during the prior-year period primarily due to increased rent expense of $0.4 million, inclusive of rent expenses associated with opening 17 new branches since the prior-year period.
Previous wording
Marketing. Marketing expenses increased $1.0 million, or 24.6%, to $5.1 million during the three months ended September 30, 2024, from $4.1 million during the prior-year period due to increased activity in our direct mail campaigns to support growth.
Current wording
Marketing. Marketing expenses increased $1.1 million, or 25.3%, to $5.4 million during the three months ended March 31, 2025, from $4.3 million during the prior-year period due to increased activity in our direct mail campaigns of $0.6 million to support growth in our legacy markets and $0.5 million to support our 17 new branches opened since the prior-year period.
Previous wording
Other Expenses. Other expenses increased $0.6 million, or 5.4%, to $12.5 million during the three months ended September 30, 2024, from $11.9 million during the prior-year period. The increase was primarily due to investment in digital and technological capabilities of $0.4 million and higher credit bureau fees of $0.3 million.
Current wording
Other Expenses. Other expenses increased $0.7 million, or 5.5%, to $12.6 million during the three months ended March 31, 2025, from $11.9 million during the prior-year period. The increase was due to increased collection expenses of $0.4 million and increased credit bureau fees of $0.3 million.
Previous wording
Interest Expense. Interest expense increased $4.8 million, or 9.6%, to $54.7 million during the nine months ended September 30, 2024, compared to $50.0 million during the prior-year period. The increase was primarily due to an increase in our average cost of debt as well as an increase in the average balance of our debt facilities. The annualized average cost of debt increased 0.33% to 5.31% during the nine months ended September 30, 2024, from 4.98% during the prior-year period. The average balance of our debt facilities increased $38.1 million to $1.4 billion during the nine months ended September 30, 2024, from $1.3 billion during the prior-year period.
Current wording
Interest Expense. Interest expense increased $2.3 million, or 13.0%, to $19.8 million during the three months ended March 31, 2025, from $17.5 million during the prior-year period. The increase was primarily due to an increase in our cost of funds as well as an increase in the average balance of our debt facilities. Our cost of funds increased 0.2% to 4.2% during the three months ended March 31, 2025, from 4.0% during the prior-year period. The average balance of our debt facilities increased to $1.5 billion during the three months ended March 31, 2025, from $1.4 billion during the prior-year period.
Previous wording
Our primary cash needs relate to the funding of our lending activities and, to a lesser extent, expenditures relating to improving our technology infrastructure and expanding and maintaining our branch locations. We have historically financed, and plan to continue to finance, our short-term and long-term operating liquidity and capital needs through a combination of cash flows from operations and borrowings under our debt facilities, including our senior revolving credit facility, revolving warehouse credit facilities, and asset-backed securitization transactions, all of which are described below. We continue to seek ways to diversify our funding sources. As of September 30, 2024, we had a funded debt-to-equity ratio (debt divided by total stockholders’ equity) of 4.0 to 1.0 and a stockholders’ equity ratio (total stockholders’ equity as a percentage of total assets) of 19.4%.
Current wording
Our primary cash needs relate to the funding of our lending activities and, to a lesser extent, expenditures relating to improving our technology infrastructure and expanding and maintaining our branch locations. We have historically financed, and plan to continue to finance, our short-term and long-term operating liquidity and capital needs through a combination of cash flows from operations and borrowings under our debt facilities, including our senior revolving credit facility, revolving warehouse credit facilities, and asset-backed securitization transactions, all of which are described below. We continue to seek ways to diversify our funding sources. As of March 31, 2025, we had a funded debt-to-equity ratio of 4.1 to 1.0 and a stockholders’ equity ratio of 18.8%.
Previous wording
Cash and cash equivalents increased to $4.7 million as of September 30, 2024, from $4.5 million as of the prior year-end. We had immediate availability to draw down cash from our revolving credit facilities of $149.9 million and $108.1 million as of September 30, 2024 and the prior year-end, respectively. Our unused capacity on our revolving credit facilities (subject to the borrowing base) was $482.2 million and $551.5 million as of September 30, 2024, and the prior year-end, respectively. Our total debt was $1.4 billion as of both September 30, 2024, and the prior year-end, respectively.
Current wording
Cash and cash equivalents increased to $4.2 million as of March 31, 2025, from $4.0 million as of the prior year-end. We had immediate availability to draw down cash from our revolving credit facilities of $125.2 million and $132.9 million as of March 31, 2025 and the prior year-end, respectively. Our unused capacity on our revolving credit facilities (subject to the borrowing base) was $640.7 million and $466.2 million as of March 31, 2025, and the prior year-end, respectively. Our debt balance was $1.5 billion for both March 31, 2025 and the prior year-end.
Previous wording
The Board may in its discretion declare and pay cash dividends on our common stock. The following table sets forth the dividends declared and paid for the nine months ended September 30, 2024:
Current wording
The Board may in its discretion declare and pay cash dividends on our common stock. The following table sets forth the dividends declared and paid for the three months ended March 31, 2025:
Previous wording
The Board declared and paid $9.2 million of cash dividends on our common stock during the nine months ended September 30, 2024. See Note 13, “Subsequent Events” of the Notes to Consolidated Financial Statements in Part I, Item 1, “Financial Statements,” for information regarding our cash dividend following the end of the quarter.
Current wording
The Board declared and paid $3.0 million of cash dividends on our common stock during the three months ended March 31, 2025. See Note 14, “Subsequent Events” of the Notes to Consolidated Financial Statements in Part I, Item 1, “Financial Statements,” for information regarding our cash dividend following the end of the quarter.
Previous wording
Operating Activities. Net cash provided by operating activities during the nine months ended September 30, 2024 was $205.1 million, compared to $182.3 million during the prior-year period, a net increase of $22.8 million. The increase in net cash provided was primarily due to the growth of our loan portfolio.
Current wording
Operating Activities. Net cash provided by operating activities during the three months ended March 31, 2025 was $63.7 million, compared to $58.5 million during the prior-year period, a net increase of $5.2 million. The increase in net cash provided was primarily due to the growth of our loan portfolio.
Previous wording
Investing Activities. Investing activities consist of originations and repayments of finance receivables, purchases of intangible assets, and purchases of property and equipment for new and existing branches. Net cash used in investing activities during the nine months ended September 30, 2024 was $196.4 million, compared to $194.1 million during the prior-year period, a net increase in cash used of $2.3 million. The increase in net cash used was primarily driven by increased originations as we grow our loan portfolio, partially offset by increased repayments of finance receivables.
Current wording
Investing Activities. Investing activities consist of originations and repayments of finance receivables, purchases of intangible assets, and purchases of property and equipment for new and existing branches. Net cash used in investing activities during the three months ended March 31, 2025 was $60.3 million, compared to $20.3 million during the prior-year period, a net increase in cash used of $39.9 million. The increase in net cash used was primarily driven by increased originations as we grow our loan portfolio, partially offset by increased repayments of finance receivables.
Previous wording
Financing Activities. Financing activities consist of borrowings and payments on our outstanding indebtedness. Net cash used in financing activities during the nine months ended September 30, 2024 was $17.0 million, compared to net cash provided by financing activities of $4.5 million during the prior-year period, a net increase in cash used of $21.5 million. The net increase in cash used was primarily due to an increase in the net payments on debt of $21.6 million.
Current wording
Financing Activities. Financing activities consist of borrowings and payments on our outstanding indebtedness. Net cash used in financing activities during the three months ended March 31, 2025 was $12.6 million, compared to $44.4 million during the prior-year period, a decrease in cash used of $31.8 million. The decrease in cash used was primarily due to an increase in the net advances on debt instruments of $41.1 million related to increased originations, partially offset by an increase in the repurchases of common stock of $6.5 million and an increase in payments for debt issuance costs of $2.4 million.
Previous wording
As of September 30, 2024, we had five revolving credit facilities outstanding and, from time to time, engaged in the private offering and sale of asset-backed notes. As part of our overall funding strategy, we have transferred certain finance receivables to affiliated VIEs for asset-backed financing transactions. Our debt arrangements described below, other than our senior revolving credit facility, are issued by each of our RMR and RMIT SPEs, which are considered VIEs under GAAP. These debts are supported by the expected cash flows from the underlying collateralized finance receivables. Collections on these finance receivables are remitted to restricted cash collection accounts, which totaled $100.3 million and $109.9 million as of September 30, 2024 and December 31, 2023, respectively. Our debt arrangements also contain various debt covenants. We were in compliance with all such debt covenants as of September 30, 2024.
Current wording
As of March 31, 2025, we had five credit facilities outstanding and, from time to time, engage in the private offering and sale of asset-backed notes. As part of our overall funding strategy, we have transferred certain finance receivables to affiliated VIEs for asset-backed financing transactions. Our debt arrangements described below, other than our senior revolving credit facility, are issued by each of our RMR and RMIT SPEs, which are considered VIEs under GAAP. These debts are supported by the expected cash flows from the underlying collateralized finance receivables. Collections on these finance receivables are remitted to restricted cash collection accounts, which totaled $107.9 million and $117.1 million as of March 31, 2025 and December 31, 2024, respectively. Our debt arrangements also contain various debt covenants. We were in compliance with all such debt covenants as of March 31, 2025.
Showing the first 40 of 45 pairs. Open the source sections for the rest.
Rearranged previous paragraphs (7)
Previous report — wording carried elsewhere
Insurance Income, Net. Insurance income, net decreased $4.0 million, or 34.8% to $7.4 million during the three months ended September 30, 2024, from $11.4 million during the prior-year period. During both the three months ended September 30, 2024 and the prior-year period, personal property insurance premiums represented the largest component of aggregate earned insurance premiums. During the three months ended September 30, 2024 personal property claims reserves represented the largest component of direct insurance expenses. During the three months ended September 30, 2023 life insurance claims expense represented the largest component of direct insurance expenses.
Previous report — wording carried elsewhere
The following table sets forth the average net finance receivables balance and average yield for our loan products:
Previous report — wording carried elsewhere
Annualized interest and fee income as a percentage of average net finance receivables.
Previous report — wording carried elsewhere
The following table summarizes the components of the increase in interest and fee income:
Previous report — wording carried elsewhere
The following table summarizes the components of insurance income, net:
Previous report — wording carried elsewhere
Earned premiums decreased by $2.4 million and claims, reserves, and certain direct expenses increased by $2.2 million, in each case compared to the prior-year period. The decrease in earned premiums was primarily due to our strategic shifts in product and geographic mix which resulted in fewer active policies. The increase in claims, reserves, and certain direct expenses was primarily due to an increase in personal property insurance claims and reserves of $3.5 million related to hurricane activity.
Previous report — wording carried elsewhere
(1) See Note 13, “Subsequent Events” of the Notes to the Consolidated Financial Statements in Part 1, Item 1, “Financial Statements,” for information regarding an amendment of the RMR VII Revolving Warehouse Credit Facility following the end of the fiscal quarter.