RM

Image source: The Motley Fool. Wednesday, July 29, 2026 at 5:00 p.m. ET President and Chief Executive Officer - Lakhbir Lamba Chief Financial and Administrative Officer - Harpreet Rana Investor Relations - Garrett Edson Operator: Thank you. Greetings. Welcome to the Regional Management Second Quarter 2026 Earnings Call. Please note this conference is being recorded. I will now turn the conference over to Garrett Edson from Investor Relations. Thank you. You may begin. Garrett Edson Thank you and good afternoon. By now, everyone should have access to our earnings announcement and supplemental presentation, which were released prior to this call and may be found on our website at regionalmanagement.com. Before we begin our formal remarks, I will direct you to Page 2 of our supplemental presentation, which contains important disclosures concerning forward-looking statements and the use of non-GAAP financial measures. Part of our discussion today may include forward-looking statements, which are based on management's current expectations, estimates, and projections about the company's future financial performance and business prospects. These forward-looking statements speak only as of today and are subject to various assumptions, risks, uncertainties, and other factors that are difficult to predict, and that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. These statements are not guarantees of future performance and therefore you should not place undue reliance upon them. We refer all of you to our press release presentation and recent filings with the SEC for a more detailed discussion of our forward-looking statements and the risks and uncertainties that could impact our future operating results and financial condition. Also, our discussion today may include references to certain non-GAAP measures. Reconciliation of these measures to the most comparable GAAP measures can be found within our earnings announcement or earnings presentation and posted on our website at regionalmanagement.com. I would now like to introduce Lakhbir Lamba, President and CEO of Regional Management Corp. Lakhbir Lamba: Thanks, Garrett, and good afternoon, everyone. Joining me on the call today is Harp Rana, our Chief Financial and Administrative Officer. I'll begin with a summary of our second quarter results and an update on our strategic priorities. And then Harp will walk through the financial details. In the second quarter, our franchise continued to perform well. We generated strong revenue, grew our higher quality auto-secured portfolio, improved our operating efficiency, and continued to return capital to shareholders. For the quarter we generated net income of $8.2 million or $0.85 of diluted earnings per share. On a year-to-date basis, net income and diluted EPS are up 14% and 17%, respectively, compared to the first half of last year. We delivered total revenue in the second quarter of $168 million, up 7% year-over-year, driven by continued portfolio growth. We also maintained strong operating leverage, improving our operating expense ratio by 80 basis points year-over-year to 12.4% while continuing to invest in the business. As we continue to grow our auto-secured product portfolio, which increased 32% year-over-year, now representing 15% of our total portfolio and carries a 30-plus day delinquency rate of just 2%. At the same time, we operated in a more competitive environment for customer acquisition, and we made deliberate decisions to tighten underwriting in certain higher-risk segments that did not meet our risk-adjusted return hurdles. Portfolio growth came in below our outlook for the quarter, and our net credit loss rate was modestly above our forecast, driven in part by the lighter portfolio growth. As I'll describe, we are acting decisively to improve both our growth trajectory and credit performance. In particular, we've identified and selectively tightened credit in certain geographic and channel-specific segments, and we've significantly strengthened our fraud detection and prevention capabilities, principally in our direct mail and digital affiliate channels. The early results from these enhanced controls are very promising, and we expect them to support improving credit performance. Consistent with what we discussed on prior calls, we remain committed to our long-term goal of a net credit loss rate below 10%. We are cautiously optimistic about the health of the consumer. We continue to monitor the potential impact of higher inflation, including continued elevated gas prices, and we remain disciplined and conservative in our underwriting as we navigate the current macro environment. We are also making meaningful progress across our strategic priorities as we invest to compete and win. First and foremost, we continue to expand our bank partnership program with Column. This program is an important enabler of our long-term strategy, providing greater product and operational uniformity across states, faster entry into new markets, expanded relationships with our customers, a wider addressable market, and attractive unit economics as this program scales. We've accelerated implementation of the program ahead of our internal plan. We've now fully implemented the program for branch originations in Texas, our largest market, and we expect to expand to additional states beginning later this year. We are encouraged by the early results, including origination trends, yield impact, and credit performance. Originations exceed $65 million under the program since its launch. On a run rate basis, originations under the program now represent roughly 28% of total originations. And we expect that ratio to increase materially as we transition additional products and states to the program later this year and next year. We are projecting that pre-tax margin will improve by at least 200 basis points under the program compared to like-for-like loans originated in our state-licensed operations. This lift in margin reflects an improvement in total revenue yield driven by marketing and servicing fees that are paid to us by the bank, and higher interest and fee income earned on originated loans, offset in part by program costs paid to the bank and a decline in insurance revenue from the elimination of personal property and non-file insurance. Early credit performance is also promising. As of the end of the second quarter, the 1-plus-day delinquency rate on the portfolio of bank partnership loans that we originated in March and April was 160 basis points better than the comparable portfolio of state-licensed loans originated in Texas over the same time period. We will continue to scale the partnership methodically as we evaluate results and refine the strategy. We expect nearly all states in our network to be operating under the bank partnership model by the end of 2027. We believe this will be transformative to the operations and returns of our business, and a key enabler for net income growth in 2027 and beyond. Second, and building directly on that foundation, in early July, we launched an end-to-end digital lending origination capability. This is a distinct step beyond our historical digitally sourced model in which we generate leads that are underwritten and closed in our branches. With this new capability, customers can complete the entire process online from application through funding in minutes. This technology positions us to compete more effectively with Fintechs and lean further into our omnichannel operating model. To be clear, our branch network remains at the core of our operations and our relationships with customers, and the digital channel complements it. Given the importance of credit performance in this channel, we're building it on strong fraud authentication and machine learning-based underwriting, and we will be deliberate and methodical in scaling it, expanding only as we confirm that it clears a risk-adjusted return hurdle. Third, we are accelerating the rollout of our new branch loan origination platform, and alongside it we're introducing an enhanced machine learning-based origination credit model. This is a continuation of the technology and analytics investments we've discussed previously. And moving them forward more quickly strengthens both our operating efficiency and credit decision. Fourth, we've made significant progress in enabling artificial intelligence across our operations, including in collections and customer service, which we expect to enhance both the customer experience and our operational effectiveness and efficiency. Finally, we continue to invest in growth. We are diversifying origination channels and our marketing capabilities to strengthen customer acquisition, and we're expanding into attractive new markets. In the second quarter, we entered the state of Florida, our 20th state, which represents a meaningful long-term growth opportunity. Turning to our outlook, we are revising our full-year guidance. We now expect full-year diluted earnings per share growth of 10% to 13% and portfolio growth of 5% to 7%. Harp will provide additional detail on the quarterly cadence, but we continue to expect sequentially stronger quarterly earnings in the third and fourth quarters. This reset on near-term guidance reflects a deliberate choice. We'd rather build from an even stronger foundation and grow profitably than pursue growth that doesn't earn an appropriate return. The actions we're taking across credit, technology, distribution, and our bank partnership while putting modest pressure on second half results, position us to re-accelerate profitable growth, improve our returns as we exit 2026, and deliver very strong results in 2027 and beyond for our shareholders. I am confident we are building from a position of strength and making the right decisions for the long-term health of the business. With that, I will turn the call over to Harp. Harpreet Rana: Thank you, Lakhbir, and good afternoon, everyone. I'll now take you through our second quarter results in more detail. On Page 4, we present our second quarter financial highlights. Net income was $8.2 million, and diluted earnings per share were $0.85. Our results reflect continued year-over-year portfolio and revenue growth and strong operating leverage offset by a higher provision for credit losses tied to portfolio growth and a net credit loss rate that was modestly above our forecast. Year-to-date through June, net income was up $2.4 million or 14% compared to the prior year period and return on equity was up 80 basis points year-over-year. As Lakhbir discussed, we've updated our full-year outlook, and I'll cover the details when we get to Page 14. Moving to Pages 5 and 6, total originations were $504 million, down 1.3% year-over-year. Large loan originations grew more than 10%, while small loan volumes declined as we tightened underwriting in higher-risk business and navigated a more competitive environment for new customer acquisition. Ending net finance receivables were $2.1 billion, up 9.6% year-over-year, driven by our large loan and auto-secured products and by the branches we've opened over the past year. Net finance receivables per branch increased to approximately $6 million, up 8% year-over-year. On a sequential basis, receivables grew $44 million as we returned to growth following the normal first quarter tax season liquidation, while remaining deliberate in our originations given the competitive backdrop and elevated gas prices. Looking ahead, we expect third quarter portfolio growth to be stronger than the second quarter in line with seasonally higher demand in the second half of the year. On Page 7, total revenue for the second quarter was $168 million, an increase of 6.7% year-over-year, driven by higher average net finance receivables. Our total revenue yield was 31.8%, down 110 basis points year-over-year, primarily reflecting the continued mix shift toward larger, lower-yielding loans. Total revenue yield was up 30 basis points sequentially, consistent with seasonality and the impact of our bank partnership, offset in part by lower insurance revenue yield. As we move into the third quarter, we expect total revenue yield to be higher on a sequential basis due to seasonal trends and the benefits of our bank partnership. Turning to Page 8, our 30-plus day delinquency rate was 7.0%, a 20 basis point improvement sequentially and a 40 basis point increase year-over-year. Our net credit loss rate was 12.2%, up 30 basis points year-over-year and modestly above our forecast. After adjusting for approximately 20 basis points of impact from slower portfolio growth, our net credit loss rate was in line with our expectations. Looking ahead to the third quarter, we expect delinquencies to rise on a seasonal basis while net credit losses improve. We continue to monitor macroeconomic conditions closely, including the impact of inflation and elevated gas prices on our customers. On Page 9, we increased our allowance for credit losses by $4.5 million during the quarter to support portfolio growth. Our allowance rate was 10.4%, steady sequentially and up 10 basis points from the prior year period, reflecting updates from macroeconomic assumptions. Subject to economic and credit conditions, we expect our allowance rate to hold roughly flat on a sequential basis in the third quarter. Flipping to Page 10, our annualized operating expense ratio was 12.4%, an improvement of 80 basis points year-over-year, even as we continue to invest in technology, digital capabilities, and growth. Total general and administrative expenses increased $2.5 million year-over-year, and the modest sequential uptick in our annualized operating expense ratio from 12.2% in the first quarter was consistent with our expectations. For the third quarter, we expect our operating expense ratio to increase sequentially. Under our state-licensed operations, we're able to defer certain labor and digital marketing expenses, which are recognized over the life of the state-licensed loans that we originate. For loans originated under the bank partnership model we'll instead recognize those labor and digital marketing expenses immediately at origination. While this change in accounting treatment will accelerate the timing of G&A expense recognition, the revenue benefits of the bank partnership program will far outweigh the impact on our operating expenses. Turning to Pages 11 and 12, interest expense was $23 million in the second quarter, or 4.4% of average net finance receivables on an annualized basis, with our cost of funds up 20 basis points year-over-year. We continue to maintain a strong balance sheet with $442 million of unused capacity, available liquidity of $128 million, diversified and staggered funding sources, and a fixed rate debt representing 80% of total debt at a weighted average coupon of 4.8%. We expect our funding costs to tick up to 4.5% in the third quarter due to the maturation of lower cost fixed rate funding. On Page 13, we continue to generate capital and deploy it in a disciplined manner. During the second quarter, we repurchased approximately 136,000 shares of our common stock at a weighted average price of $36.68 per share, and our Board declared a $0.30 per share dividend for the third quarter. On a year-to-date basis, we generated approximately $27 million of capital and returned approximately $18 million to shareholders through dividends and share repurchases. Finally, on Page 14, let me provide you some additional detail on how we expect the balance of the year to progress. As Lakhbir described, we now expect full-year diluted earnings per share growth in the range of 10% to 13% and portfolio growth in the range of 5% to 7%. For net income, we anticipate full-year growth of 6% to 9%. Within that outlook, we expect net income in the third and fourth quarters to be meaningfully higher than in the second quarter and for fourth quarter net income to be sequentially higher than third quarter net income. The primary driver is the expected growth in receivables as we exit the second quarter, which will support higher revenues across the back half of the year. Provision for credit losses will increase as we've reserved for that growth at levels comparable to the second quarter, allowing revenue growth to translate into stronger earnings. From a credit standpoint, we expect net credit losses to improve in the third and fourth quarters, and we expect the benefits of our strategic initiatives, including our bank partnership to build as we move through the second half. That concludes my remarks. I'll now turn the call back over to Lakhbir. Lakhbir Lamba: Thank you, Harp. Before we open the call for questions, I want to leave you with a few thoughts. The second quarter did not meet our growth expectations, and we've adjusted our full-year outlook accordingly. We are choosing to prioritize a stronger operating foundation, one that we believe will support more sustainable growth, stronger returns, and greater value creation for shareholders. At the same time, we are moving with purpose and agility on the initiatives that will drive our next phase of growth. Advancing our bank partnership, leaning into our omnichannel operating model, accelerating our investments in technology and analytics, deploying AI across our operations, and expanding into attractive new markets. I am confident that the disciplined decisions we are making today will position us to increase returns in this business and re-accelerate profitable growth, with tangible progress on both fronts becoming increasingly evident over the next 12 months. Later this year, we plan to share a longer-term framework that will outline how our bank partnership will be transformative to the returns of our business and will begin to show up in our 2027 results in a material way. I want to thank our team across the company for their continued dedication to our clients and their hard work this quarter. We are building from a strong foundation, and I'm confident in our strategy, our people, and our ability to create long-term value for our shareholders. With that, operator, please open the line for questions. Operator: One moment while we poll for questions. Our first question is from Vincent Caintic with BTIG. Vincent Caintic: First question, you talked a lot about the loan growth trends and what kind of drove the miss for the second quarter and kind of the lower guide for the rest of the year. But I was wondering if you could maybe separate out some of the different drivers or factors that have been causing this. So you did talk about, so if you could maybe separate out like well, how much of this was macro driven, consumer driven, and are you still seeing those kind of trends in July or have they maybe eased on that? How much of it was competitive pressures and what are you seeing there and has that maybe eased or alternatively accelerated? And then I don't think that Column Bank would yet have any impact, but there's, you know, you have several initiatives. And so I'm wondering how maybe some of the initiatives maybe causes -- could cause some hiccups in the near term as things kind of ramp up and getting systems in place and so forth. So maybe if you could separate all of those and talk about also kind of where it stands today at the end of July. Lakhbir Lamba: Vincent, good afternoon. Lakhbir, I'll take it. I think the factors, I think one, I mentioned our response rates in our direct mail campaigns we do were lower than expectation, creating an impact share to origination numbers. When it comes to competitive pressures, if you just look at industry data, the share of originations that are driven by Fintechs has been going up in the personal lending business. So we believe some of that is creating the pressure in our business. There is a segment of consumer that wants to originate the asset digitally end-to-end and not come to the branch. So we are tracking the response rates. That's Number 1. Number 2, you know, as I mentioned in the last quarter, I've been looking at various segments of the business by geography, by channel, by product, by risk segment, really looking through year-over-year and over time, where the margins have been compressing, where the returns are not meeting our expectations. And if you look at in the appendix, there's a page on the earnings presentation, the digital affiliate channel, the business we originated through digital affiliates, you know, the growth rate has slowed down there. Partly it's driven by some of the segments we looked at and we wanted to make sure the returns were there. In parallel, we, as I mentioned, enhanced fraud controls. We've implemented pretty strong sort of prevention detection capability in the last 4 months. And so we wanted to make sure we were getting the returns before we unwind some of those tightening actions back up. So that's number 2, that's driving the portfolio growth production. I think the third thing you mentioned, the initiatives we are doing or Column, they are not really creating the hiccups. You know, there's obviously when you're launching a new loan origination system and/or a bank partnership in the branches, there's some change management we have to go through, but that's not really, you know, to our knowledge, creating the hiccups, if you will. I would say, in summary, it's really 2 things, one is the deliberate actions we took to make sure we were making money in each of the sales as we grow them, and then two, for the response rates in our direct mail campaigns. Comes to July, let's Harp maybe answer that question. Harpreet Rana: Yes. So in terms of July, Vincent, we're tracking to the guidance that we have given for both third and fourth quarter. You mentioned in terms of, right, like we've lowered our guidance on ENR growth. And that is very much as a result of the competitive pressures that we are seeing in new borrower acquisition. However, I want to frame all of this for you in terms of, you know, many of the strategic initiatives that Lakhbir spoke about. So, in terms of digital, you know, end-to-end origination, so we are seeing competitive pressure from the Fintechs, but we are positioning ourselves to be able to compete in that channel. Now in that channel, right, you do tend to have some bad actors and the fraud tools and the fraud controls that Lakhbir talked about that we implemented will not only help us in that channel, but also in our mail channel, in our branch origination channel. So we're actually quite pleased with the early results that we see there. Now, the good news on that is once you're able to eliminate the bad actors, what you're able to now do is take a look at your policy and you're able to open that up for customers who actually want to be paying customers and take loans. So we're actually very, very excited about both the digital end-to-end origination, the fraud tools that will permit us to actually compete with the Fintechs. And so that may take us just a little bit of time in order to get all of that right. So as a result of that, we've lowered our guidance for the year. But we're working on all of these strategic initiatives, and we do believe that they will help us compete. And, you know, our acquisitions will get, you know, back to sort of, you know, where we had guided to at the beginning of the year. Vincent Caintic: Okay, great. That's helpful. Thank you. And then kind of following up on all these initiatives like Column and some of the other things in terms of generating origination volume, I guess how much of that is contributing to third quarter and fourth quarter in our guide versus how much more is really coming, you know, in 2027 or beyond. I'm assuming it takes some time, but I'm just curious how much lift you're getting so far for the rest of the year. Harpreet Rana: Yes, so if you look at Page 14 of the supplement, the earnings drivers slide that we provide for quarterly earnings, we do have strategic initiatives. So all of our initiatives are embedded in that line. That list is expected to be, you know, so it's included in our guidance, Vincent, but it's $2.5 million that those initiatives are contributing to the overall guidance of 6% to 9% year-over-year net income growth that we gave and the 5% to 7% ENR growth and then the 10% to 13% EPS growth. So it's embedded in those numbers. And we expect that to be about $5 million in fourth quarter of '26. So in the growth guidance that we gave you of $60 million per quarter, it is already embedded in that number. Vincent Caintic: Okay, good. And it seems like... Harpreet Rana: Think about 2027 and beyond, Vincent, you know Lakhbir mentioned in his prepared remarks that we actually were able to accelerate the bank partnership program in branch originations in Texas. We're probably going to do 1 or 2 more states before the end of the year, and we do expect to fully convert all of our states and branches through 2027. So you will see a meaningful lift from that. Right now we estimate that lift between bank partnership and under the state license, we're estimating that lift to be about 200 basis points in pre-tax margin just from the difference on the same loan. So for on like-to-like loans, we're expecting a lift of 200 basis points on the unit economics of each loan. Vincent Caintic: Okay, great. That's super helpful. Thank you. Operator: Our next question is from Zach Oster with Citizens Capital Markets. Zachary Oster: I wanted to dig in a little bit more on the macro side of stuff and see if the change in the competitive dynamics are really kind of the driver of the tightening in the different segments that were mentioned, or if that was more just kind of macro trends, or if there's any kind of weakness going on for customer health more if it's really just, again, from that competitive side. It stands a little bit in contrast to kind of a more benign competitive environment that other lenders have been speaking about this earnings season, so I wanted to see if we can get a little bit more color in that. Lakhbir Lamba: It comes to, you know, the segment we tightened, I don't -- I won't sort of correlate that to be pure kind of macro driven. I think the competitor environment simply is like personal loan originations in the U.S. are growing, a big part of them, you know, the share of Fintechs is growing within that. When you look at sort of various geographic segments we are playing in or risk segments, you know, I looked at the margins and losses over time. In certain cells, when we looked at first payment defaults, et cetera, It was -- our hypothesis was there is, I would say, some synthetic fraud or first-party abuse or credit builder trade lines, et cetera, embedded in those segments and hence our focus right away on enhancing our fraud prevention detection controls which we did, and so -- and that's all at this point almost implemented and so I would say less macro driven in terms of collections and the impact on the consumer of gas prices and inflation. We did look at bands of customers by debt-to-income ratio or they call it, free income, how much free cash flow the consumers have. And customers who have low free income or free cash flow, we do see some on the edges impact of elevated gas prices. It's kind of natural, but that's not the biggest issue we see in terms of where we tighten [indiscernible], but we are monitoring that, as I said, cautiously now that gas prices are back up to some elevated $85 and what have you level in terms of crude oil prices. Hope that answers the question. Zachary Oster: Got it. That's helpful. Got it. Lakhbir Lamba: Yes. Zachary Oster: Sorry, go ahead. Lakhbir Lamba: No, no, I just hope that answers the question. Zachary Oster: Yes, no, that was very helpful color. Yes, I just wanted to also kind of follow up on that and see if there's more color specifically on each segment in terms of small loans or large loans. It looks like the small loan growth came in kind of below our expectations and large loans was more in line. So is that kind of a read-through to competitive trends at different APRs. Harpreet Rana: So, Zach, how I would think about that is, you know, large loans, you know, did grow for us year-over-year that's driven by auto-secured, which has been doing fairly well for us. How I would think about, you know, what's happening on small loans is really new borrower acquisition, right? So when you have competition in new borrower acquisition, and particularly in our new borrower acquisition channel, that tends to impact small loans more. So that's really what you're seeing there, is just the impact on small loans of that environment. Now, a couple of things that I will add is, you know there is volume to be done should you want to do volume. We want to do responsible volume and so we've been very disciplined about making sure that the loans that you know we're putting on the book to meet our return hurdle. So that's how I would think about that. It does not mean that we will not do small loans. We will do small loans, and particularly when we get some of these initiatives that we talked about fully off the ground. So we will continue to do small loans, it's just that where we're seeing you know new borrower acquisition competition. Operator: Our next question is from Alexander Villalobos with Jefferies. Alexander Villalobos-Morsink: Here instead of John Hecht. But on the funding side, you mentioned that the cost of funding was ticking up just a slight bit, up to 4.5%. But just a little bit curious if you could give us just a quick overview of kind of like where the current debt stack is right now. And if there's like any opportunities in the future to maybe lower the cost of funds or if there's any efficiencies with the -- with Column that you guys could use, but yes, just a little bit on the debt side and the funding side. Harpreet Rana: Yes, Alex, It's Harp. So, you know, as you know, we have a diversified set of lenders, and we've done a fairly reasonable job of keeping our cost of debt and our cost of funds low through the cycle. You know, we are a programmatic issuer of securitization. So one of the things that you are seeing is you are seeing debt that we put on in 2021, you know, that is going to roll off. And as that rolls off, you know, we will replace those securitizations at current rates. And that's really what you see in terms of the tick up on the cost of funds. It's really that it was coming off of a low. And now that we're replacing some of that debt at market rate, you know, it will tick up until it cycles through. You know, in terms of how we think about funding, I mean, we have, you know, enough liquidity for what we want to do today. We have unused capacity for, you know, things that we would want to do today. We've got a solid set of lenders. But that said you know we're always looking to diversify and ensure that we have enough runway to grow all of the things that we've just spoken about. So that's how we think about that, Alex. Operator: Our next question is from Bill Dezellem with Tieton Capital Management. William Dezellem: I'd like to pursue the Column relationship. And I guess I'm going to expose my ignorance here, but you'd mentioned that the early results look promising. Would you dive into that a bit further? And then how do you view this as transformational and ultimately changing the trajectory of the growth of the business, as you referenced in the release? And maybe finally, you'd reference that delinquencies will be lower when you're originating under the Column relationship. And I guess, in my mind, I would think that you would be using the same lending criteria. So why would that delinquency rate end up being lower? So apologies for throwing you with a multi-part question, but I can repeat anything you need me to. Harpreet Rana: Bill, It's Harp. I'll start on the early results. So the early results are just in terms of, you know, the income that we're seeing. So our early results are, hey, it's working the way that we want it to. You know, we're recognizing, you know, that income on the other income line and we pay a platform fee for it. And then when you compare that to how we would have done this under state-licensed loans, it has a lift. And that's the lift that I referenced earlier in terms of we're estimating that lift on like-for-like loans to be about 200 basis points over time. And so, what we're seeing is tracking to that in terms of the early results. So that's what I would say in terms of the early results. You know, on the delinquency rate, you know, right now we're seeing a benefit on the delinquency rate, but we're still originating those loans under our current credit. So, you know, it's going to be like-for-like really, right? But we're monitoring it just to make sure that it would continue to be like-for-like. So we are seeing a little bit of a benefit on the delinquency rate from what we're generating, but again, we would expect those to be like-for-like under the bank partnership or under, you know, the state loan. And in terms of the things that Column could unlock for us, I'll turn that over to Lakhbir and he'll talk a little bit about that. Lakhbir Lamba: Yes, Bill, as Harp said, I think, you know, number 1 is sort of the increased revenue opportunity on existing products and clients. So there are in markets specific segments of customers where we don't take the risk because we can't price for that risk. And so this partnership allows us to price for the risk, and we are able to charge, you know, be it origination fees or what have you depending on the state itself. And so that creates a lift in the business. Number 2, it helps us increase speed to market. So historically, we basically said, hey, we'll build branches and enter states as we build additional end-to-end capability with the right credit, you know, within the right credit box. We could use a uniform product set using the Column charter and enter the markets faster. And then third, I would say, you know, the Column tech stack and the partnership enables us to get into a broader product ecosystem over time. Again, that's not today or this year, but we can work on launching an expansive product set that we couldn't do today ourselves. The question on delinquencies, what I will mention is, we are wanting to make sure that as we enter in bank partnership in various markets that we don't see a credit performance that is worse than how we do it under state-licensed models. And so the early read, we're just tracking and making sure it's not, you know, impacted negatively and so to your point the credit policy that we are using is sort of what we do day-to-day in the business and so delinquencies shouldn't be impacted, but we are confirming it. And the other thing we are confirming is, as we mentioned, we are eliminating over time as we launch bank partnerships in various markets you know the personal property insurance. So we want to make sure that as we are making those changes on the top line, on the credit line, there aren't any changes. So that's why we say it's an early. William Dezellem: That's very helpful. And then one additional follow-up. So if you are able to charge higher rates to higher-risk customers that you otherwise would not be lending to, is the implication then that this will accelerate your small loan originations and theoretically it should increase your feeder pipeline for the large loans as those new borrowers that you would not otherwise be lending to some of those will demonstrate their credit worthiness? Lakhbir Lamba: You have it exactly right. That's exactly the goal. Our current, as you mentioned, our feeder to new client acquisition is through our small checks and our leads coming through digital affiliates that are digitally sourced. In some of those cells, to your point, the loss rates are high and we can't price for them. And so with bank partnership we can price in certain those cells we can get those clients as you know new customers of Regional and we can, over time, renew them into larger loans. And so that's exactly sort of one of our opportunities as we go forward. Operator: This now concludes our question and answer session. I would like to turn the floor back over to Lakhbir for closing comments. Lakhbir Lamba: Thank you so much. Yes, I think in closing, you know, I just want to say 4 things. One, we are choosing to prioritize a stronger operating foundation. As I mentioned when I joined the company, we want to get returns up in the firm. It's our number 1 focus. We want to make sure this foundation continues to be really strong. Number 2, we are moving with purpose and speed in making sure we execute, have a strong, consistent execution culture. And that's, as you've heard, a number of initiatives, especially bank partnerships that we are pushing on. Number 3, bank partnership, as I mentioned, Bill, just to your question, we believe it is going to be transformational and accretive to the company as we go forward and it will help us grow the firm and net income significantly. And then lastly, I just want to thank our team. We are, as we execute a number of initiatives, the team is working hard and will be working hard and dedicated to our clients and helping us grow this company responsibly. So thank you. With that, back to you, operator. Operator: Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. Please disconnect your lines and have a wonderful day. Before you buy stock in Regional Management, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Regional Management wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Regional Management (RM) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management attributed the second quarter's lower-than-expected portfolio growth to deliberate underwriting tightening in high-risk segments and increased competition for new customer acquisition from Fintechs. The company identified specific geographic and channel segments where returns did not meet hurdles, leading to a strategic decision to prioritize a stronger operating foundation over volume. Credit performance was impacted by a net credit loss rate of 12.2%, which was modestly above forecast due to lighter portfolio growth and suspected synthetic fraud in certain digital channels. The auto-secured portfolio remains a key strategic driver, growing 32% year-over-year and maintaining a low 30-plus day delinquency rate of just 2%. Management is accelerating the bank partnership program with Column to achieve product uniformity, faster market entry, and improved unit economics through marketing and servicing fees. Operational efficiency improved with an 80-basis point reduction in the operating expense ratio to 12.4%, despite ongoing investments in technology and AI-driven collections. Full-year diluted EPS growth guidance was revised to 10% to 13%, reflecting a cautious approach to the macro environment and a focus on profitable growth. The bank partnership program is expected to be transformative, with management projecting a pre-tax margin improvement of at least 200 basis points on like-for-like loans compared to state-licensed operations. Management expects nearly all states to operate under the bank partnership model by the end of 2027, which is viewed as a primary enabler for significant net income growth. Third and fourth quarter earnings are projected to be sequentially stronger, driven by seasonal demand and the building benefits of strategic initiatives. The company plans to scale its new end-to-end digital lending capability methodically, ensuring it clears risk-adjusted return hurdles before aggressive expansion. A shift in accounting treatment for bank partnership loans will lead to immediate recognition of labor and digital marketing expenses, rather than deferring them over the loan's life. Management flagged elevated gas prices and inflation as ongoing risks to consumer free cash flow, particularly for customers with high debt-to-income ratios. The company implemented enhanced fraud detection and prevention capabilities in response to first-party abuse and credit builder trade line issues in digital affiliate channels. Regional Management entered Florida, its 20th state, which is identified as a meaningful long-term growth opportunity despite the current tightening cycle. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management clarified that the growth miss was driven by lower response rates in direct mail and deliberate tightening in digital affiliate channels where margins were compressing. Fintech competition is increasing in the personal lending space, particularly for customers who prefer end-to-end digital origination over branch visits. Strategic initiatives are already contributing to results, with a projected $5 million net income contribution from all such initiatives in the fourth quarter of 2026. The model allows the company to price for risk in segments where they previously could not, effectively expanding the addressable market for small loan 'feeder' originations. Funding costs are expected to tick up to 4.5% in the third quarter as lower-cost fixed-rate debt from 2021 matures and is replaced at current market rates. Management maintains 80% of total debt at fixed rates with a weighted average coupon of 4.8%, providing relative stability against rate volatility.

This article first appeared on GuruFocus. Net Income: $8.2 million for the second quarter. Diluted Earnings Per Share (EPS): $0.85 for the second quarter. Total Revenue: $168 million, up 7% year-over-year. Total Revenue Yield: 31.8%, down 110 basis points year-over-year. Net Credit Loss Rate: 12.2%, up 30 basis points year-over-year. 30+ Day Delinquency Rate: 7%, a 20 basis point improvement sequentially and a 40 basis point increase year-over-year. Operating Expense Ratio: 12.4%, an improvement of 80 basis points year-over-year. Interest Expense: $23 million, or 4.4% of average net finance receivables on an annualized basis. Total Originations: $504 million, down 1.3% year-over-year. Ending Net Finance Receivables: Up 9.6% year-over-year. Allowance for Credit Losses Rate: 10.4%, steady sequentially and up 10 basis points from the prior year period. Full-Year Diluted EPS Growth Guidance: 10% to 13%. Full-Year Portfolio Growth Guidance: 5% to 7%. Full-Year Net Income Growth Guidance: 6% to 9%. Warning! GuruFocus has detected 5 Warning Sign with RM. Is RM fairly valued? Test your thesis with our free DCF calculator. Release Date: July 29, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Total revenue increased 7% year-over-year to $168 million, driven by continued portfolio growth. Operating expense ratio improved by 80 basis points year-over-year to 12.4%, demonstrating strong operating leverage. Auto-secured portfolio grew 32% year-over-year, with a 30-plus day delinquency rate of just 2%. Bank partnership program with Column is scaling rapidly, with originations exceeding $65 million and expected to improve pre-tax margins by at least 200 basis points. Year-to-date net income and diluted EPS are up 14% and 17%, respectively, compared to the first half of last year. Portfolio growth fell below expectations due to lower response rates in direct mail campaigns and a more competitive environment. Net credit loss rate was modestly above forecast at 12.2%, partly due to slower portfolio growth. Total revenue yield declined 110 basis points year-over-year to 31.8%, driven by a mix shift toward larger, lower-yielding loans. Full-year guidance was revised downward, with diluted EPS growth now expected at 10% to 13% and portfolio growth at 5% to 7%. Funding costs are expected to tick up to 4.5% in the third quarter due to the maturation of lower-cost fixed-rate debt. Here are the key highlights from the Regional Management Corp (NYSE:RM) Q2 2026 earnings call, focusing on the most significant Q&A exchanges. Q: Can you separate out the drivers behind the lower-than-expected portfolio growth? How much was macro/consumer-driven versus competitive pressures, and are these trends continuing into July? A: (Lakhbir Lamba, President & CEO) The primary drivers were two-fold. First, we saw lower response rates in our direct mail campaigns. Second, we made deliberate decisions to tighten underwriting in certain geographic and channel-specific segments where returns did not meet our risk-adjusted hurdles. We also significantly enhanced our fraud detection capabilities, which impacted volume in the digital affiliate channel. These were proactive choices, not a macro-driven pullback. (Harpreet Rana, CFO) In July, we are tracking to our revised guidance for the third and fourth quarters. Q: How much of the origination volume from strategic initiatives like the Column bank partnership is contributing to the second half of 2026 versus 2027? A: (Harpreet Rana, CFO) The benefits from these initiatives are embedded in our full-year guidance. We expect the strategic initiatives to contribute approximately $5 million in net income in the fourth quarter of 2026. The full, transformative impact is expected in 2027 as we convert nearly all states to the bank partnership model by the end of that year. Q: The tightening in underwriting seems to contrast with a more benign competitive environment other lenders are seeing. Is this tightening more about macro trends or specific competitive dynamics? A: (Lakhbir Lamba, President & CEO) The tightening is less about macro trends and more about specific competitive dynamics and credit quality. We identified segments where we suspected synthetic fraud or first-party abuse. We acted decisively to enhance fraud prevention controls, which are now largely implemented. While we monitor the impact of inflation and gas prices on consumers with low free cash flow, that is not the primary driver of our actions. Q: Can you provide more detail on the early results of the Column bank partnership and why you view it as transformational? Also, why would delinquencies be lower under this model if you are using the same lending criteria? A: (Harpreet Rana, CFO) The early results are promising and tracking to our expectation of a 200 basis point improvement in pre-tax margin on like-for-like loans. (Lakhbir Lamba, President & CEO) The partnership is transformational because it allows us to price for risk in segments we previously couldn't, increases speed to market in new states, and enables a broader product ecosystem. Regarding delinquencies, we are monitoring the early portfolio to confirm that credit performance is not negatively impacted by the elimination of certain insurance products. The credit policy is the same, so we expect performance to be like-for-like. Q: Does the ability to charge higher rates to higher-risk customers under the Column partnership imply an acceleration of small loan originations and a larger feeder pipeline for large loans? A: (Lakhbir Lamba, President & CEO) You have it exactly right. That is the goal. Currently, we cannot price for risk in certain high-loss segments of our small loan and digital affiliate channels. The bank partnership allows us to price for that risk, acquire these customers, and over time, renew them into larger, more profitable loans. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

MarketBeat Week in Review – 04/27 - 05/01 Regional Management (NYSE:RM) reported second-quarter net income of $8.2 million, or $0.85 per diluted share, as revenue growth and improved operating efficiency were partly offset by higher credit-loss provisions and slower-than-expected portfolio expansion. Total revenue rose 6.7% year over year to $168 million, driven by growth in average net finance receivables. Ending net finance receivables reached $2.1 billion, up 9.6% from a year earlier, while receivables per branch increased 8% to about $6 million. → Why SK hynix Could Be the Best AI Chip Stock to Buy Now The $880M Bet to Survive Real Estate's Reset President and Chief Executive Officer Lakhbir Lamba said the company’s higher-quality auto-secured portfolio grew 32% from the prior year and represented 15% of the overall portfolio at quarter-end. The auto-secured portfolio had a 30-plus-day delinquency rate of 2%, he said. However, portfolio growth fell below the company’s expectations amid a more competitive environment for acquiring new customers and management’s decision to tighten underwriting in selected higher-risk segments. Total originations were $504 million, down 1.3% year over year. Large-loan originations increased more than 10%, while small-loan volumes declined. → 3 Value ETFs to Consider as Growth Stocks Lag Behind Home Sales Are Rising, But Who Stands to Benefit the Most? Regional Management’s 30-plus-day delinquency rate was 7%, improving 20 basis points sequentially but rising 40 basis points from a year earlier. The net credit loss rate was 12.2%, up 30 basis points year over year and modestly above the company’s forecast. Chief Financial and Administrative Officer Harp Rana said that after accounting for an approximately 20-basis-point effect from slower portfolio growth, the net credit loss rate was in line with expectations. The company expects seasonal delinquency increases in the third quarter but anticipates net credit losses will improve in both the third and fourth quarters. → 5 AI Stocks Are Pulling Back—Which Growth Catalysts Still Look Strongest? Lamba said management has identified and tightened credit in certain geographic, channel-specific and risk segments where returns did not meet its thresholds. The company also strengthened fraud detection and prevention capabilities in its direct-mail and digital-affiliate channels. He said the early results from those controls were promising. During the question-and-answer session, Lamba said lower response rates from direct-mail campaigns and competitive pressure in new-borrower acquisition were the principal factors behind the slower growth. He said the company believes fintech lenders have accounted for a growing share of personal-loan originations, particularly among consumers seeking fully digital application-to-funding experiences. Management said it continues to monitor inflation and elevated gas prices, particularly for customers with lower available cash flow. Still, Lamba said the underwriting tightening was driven less by broad macroeconomic weakness than by concerns about potential fraud, first-party abuse and credit-builder trade lines in certain segments. The company revised its full-year outlook, now forecasting: Diluted earnings-per-share growth of 10% to 13%. Net income growth of 6% to 9%. Portfolio growth of 5% to 7%. Rana said third- and fourth-quarter net income is expected to be meaningfully higher than the second-quarter level, with fourth-quarter income anticipated to exceed third-quarter income. The outlook reflects expected receivables growth, higher revenue in the second half, improving credit losses and growing contributions from strategic initiatives. A key part of Regional Management’s strategy is its bank partnership program with Column. The company has fully implemented the program for branch originations in Texas, its largest market, and expects to add states beginning later this year. Originations under the program have exceeded $65 million since launch and currently represent roughly 28% of total originations on a run-rate basis, according to Lamba. Management expects that share to increase materially as more products and states are transitioned over the remainder of 2026 and in 2027. The company projects that the program can improve pretax margin by at least 200 basis points on like-for-like loans compared with state-licensed operations. Management attributed the expected margin improvement to marketing and servicing fees paid by the bank and higher interest and fee income, partly offset by bank program costs and lower insurance revenue due to the elimination of certain insurance products. As of the end of the second quarter, loans originated through the partnership in March and April had a one-plus-day delinquency rate 160 basis points better than comparable Texas state-licensed loans originated during the same period. Rana said the company expects credit performance to be broadly comparable between the two models and is monitoring the early results as the program expands. Lamba said the partnership could allow Regional Management to price loans for certain higher-risk customer segments that it currently does not serve in some states, potentially expanding small-loan originations and creating a pipeline of customers who could later qualify for larger loans. The company expects nearly all states in its network to operate under the bank partnership model by the end of 2027. In early July, Regional Management launched an end-to-end digital lending capability that allows customers to apply, be underwritten and receive funding online. Previously, the company’s digitally sourced customers generally completed underwriting and closing through branches. Lamba said the branch network remains central to the company’s operating model, while the new digital channel is intended to complement branches and improve its ability to compete with fintech lenders. The company plans to scale the channel deliberately using fraud authentication and machine-learning-based underwriting. Regional Management is also accelerating deployment of a new branch loan-origination platform, an enhanced machine-learning credit model and artificial intelligence tools for collections and customer service. It entered Florida during the second quarter, marking its 20th state. The company’s annualized operating expense ratio improved 80 basis points year over year to 12.4%. Rana said the ratio is expected to increase sequentially in the third quarter because certain labor and digital marketing expenses tied to bank-partnership loans will be recognized immediately rather than deferred over the life of the loan. Regional Management ended the quarter with $442 million in unused capacity and $128 million in available liquidity. Fixed-rate debt represented 80% of total debt at a weighted average coupon of 4.8%. The company expects its cost of funds to increase to 4.5% in the third quarter as lower-cost fixed-rate funding matures and is refinanced at current market rates. During the quarter, the company repurchased about 136,000 shares at a weighted average price of $36.68 per share. Its board also declared a third-quarter dividend of $0.30 per share. Regional Management Corp., headquartered in Wilmington, North Carolina, is a consumer finance company specializing in installment loan products for underbanked individuals. Since its founding in 1977, the company has developed a network of field-based branches alongside a digital platform to offer credit solutions in rural and small-town markets across the United States. The company's core offerings include consumer installment loans for everyday purchases, auto refinancing and lease buyouts, as well as ancillary services such as insurance referrals. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Regional Management Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

- Quarterly net income of $8.2 million and diluted earnings per share of $0.85 - - Year-to-date net income and diluted earnings per share up 14% and 17% year-over-year, respectively - - Annualized operating expense ratio improves 80 basis points year-over-year - GREENVILLE, S.C., July 29, 2026--(BUSINESS WIRE)--Regional Management Corp. (NYSE: RM), a diversified consumer finance company, today announced results for the second quarter ended June 30, 2026. "We delivered strong second quarter revenue of $168 million and improved our operating expense ratio by 80 basis points year-over-year to 12.4%, while growing our higher-quality auto-secured portfolio and returning capital to shareholders," said Lakhbir S. Lamba, President and Chief Executive Officer of Regional Management Corp. "Year-to-date, net income and diluted earnings per share are up 14% and 17%, respectively. At the same time, portfolio growth fell short of our expectations, and our net credit loss rate was modestly above our forecast, driven in part by slower portfolio growth. These results reflect a more competitive environment for customer acquisition and deliberate decisions to tighten underwriting in segments that did not meet our risk-adjusted return hurdles, which weighed on our near-term origination volumes." "We are accelerating execution against our strategic priorities, foremost among them our bank partnership," continued Mr. Lamba. "We have implemented the partnership in Texas, our largest market, and its early results are very promising. We believe this partnership will be transformative to the reach, economics, and returns of our business and can materially change the trajectory of our net income and returns as we move into 2027. We are building from an even stronger foundation, and I am confident that the disciplined decisions we are making today will drive sustainable and profitable growth over the longer term." Second Quarter 2026 Highlights Net income for the second quarter of 2026 was $8.2 million and diluted earnings per share was $0.85, down 19.6% and 17.5% year-over-year, respectively. Net income for the six months ended June 30, 2026 was $19.6 million and diluted earnings per share was $2.03, up 14.0% and 17.3% year-over-year, respectively. Net finance receivables as of June 30, 2026 were $2.1 billion, an improvement of $187.9 million, or 9.6%, from the prior-year period, driven by strong performance from large loans, including demand for auto-secured products, and 12 new branches opened since June 30, 2025. Total originations of $503.6 million decreased 1.3% from the prior-year period. Large loan net finance receivables of $1.7 billion increased $246.3 million, or 17.4%, from the prior-year period and represented 77.3% of the total loan portfolio, compared to 72.1% in the prior-year period. Auto-secured net finance receivables of $323.7 million increased $78.1 million, or 31.8%, from the prior-year period and represented 15.1% of the total loan portfolio, compared to 12.5% in the prior-year period. Small loan net finance receivables of $488.6 million decreased $58.4 million, or 10.7%, from the prior-year period and represented 22.7% of the total loan portfolio, compared to 27.9% in the prior-year period. Second quarter total revenue of $168.0 million, an increase of $10.6 million, or 6.7%, from the prior-year period, primarily due to growth in average net finance receivables. Total revenue yield (annualized total revenue as a percentage of average net finance receivables) for the second quarter of 2026 was 31.8%, up 30 basis points sequentially, consistent with seasonality and the impact of our bank partnership, offset in part by lower insurance revenue yield. Total revenue yield decreased 110 basis points from the prior-year period primarily due to product mix shift. Interest and fee yield (annualized interest and fee income as a percentage of average net finance receivables) for the second quarter of 2026 was 28.4%, compared to 29.4% in the prior-year period, a decrease of 100 basis points from the prior-year period primarily due to product mix shift. Provision for credit losses for the second quarter of 2026 was $69.0 million, an increase of $8.4 million, or 13.9%, from the prior-year period, driven by portfolio growth. The net credit loss rate (annualized net credit losses as a percentage of average net finance receivables) for the second quarter of 2026 was 12.2%, a 30 basis point increase compared to 11.9% in the prior-year period. The current-quarter net credit loss rate included approximately 20 basis points of impact from slower portfolio growth. The provision for credit losses for the second quarter of 2026 included a sequential reserve increase of $4.5 million, primarily due to portfolio growth occurring during the second quarter of 2026. The allowance for credit losses was $224.0 million as of June 30, 2026, or 10.4% of net finance receivables, consistent sequentially. As of June 30, 2026, 30+ day contractual delinquencies totaled $149.4 million, or 7.0% of net finance receivables, a 20 basis point improvement sequentially and a 40 basis point increase from the prior-year period. The current-quarter delinquency percentage included approximately 20 basis points of impact from slower portfolio growth. The 30+ day contractual delinquency rate on the company’s higher-quality auto-secured portfolio was 2.0% as of June 30, 2026. General and administrative expenses for the second quarter of 2026 were $65.4 million, an increase of $2.5 million from the prior-year period. The operating expense ratio (annualized general and administrative expenses as a percentage of average net finance receivables) for the second quarter of 2026 was 12.4%. The ratio reflected an improvement of 80 basis points from 13.2% in the prior-year period. In the second quarter of 2026, the company repurchased 136,325 shares of its common stock at a weighted-average price of $36.68 per share under the company’s stock repurchase program. Strategic Highlights During the second quarter, the company continued to scale its bank partnership program with Column N.A., a nationally chartered bank, through which it has originated more than $65 million in loans since the program’s launch. The company has fully implemented the program for branch originations in Texas, its largest state, and plans to extend it to additional states beginning in the second half of 2026, with substantially all of its branch network expected to operate under the program by the end of 2027. Originating in partnership with a nationally chartered bank enables the company to offer more consistent products and pricing nationwide, accelerates its entry into new states, and broadens the base of customers it can serve, while improving loan-level economics as the program scales. Early origination, margin, and credit results have been encouraging. In July 2026, the company launched an end-to-end digital lending capability that enables customers to complete the entire loan process online, strengthening its omni-channel operating model and its ability to compete with fintech lenders while its branch network remains at the core of its operations. The company intends to scale the capability in a disciplined manner as it confirms strong credit performance and risk-adjusted returns. The company also entered Florida in May 2026, its 20th state, and accelerated investments across its technology and analytics platform, including a new branch loan origination system, an enhanced machine-learning credit model, and the deployment of artificial intelligence in collections and customer service. Third Quarter 2026 Dividend The company’s Board of Directors has declared a dividend of $0.30 per common share for the third quarter of 2026. The dividend will be paid on September 16, 2026 to shareholders of record as of the close of business on August 19, 2026. 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 June 30, 2026, the company had net finance receivables of $2.1 billion and debt of $1.7 billion. The debt consisted of: $208.1 million on the company’s $355 million senior revolving credit facility, $132.1 million on the company’s aggregate $425 million revolving warehouse credit facilities, and $1.3 billion through the company’s asset-backed securitizations. As of June 30, 2026, the company’s unused capacity to fund future growth on its revolving credit facilities (subject to the borrowing base) was $442 million, or 56.6%, and the company had available liquidity of $127.9 million, including unrestricted cash on hand and immediate availability to draw down cash from its revolving credit facilities. As of June 30, 2026, the company’s fixed-rate debt as a percentage of total debt was 80%, with a weighted-average coupon of 4.8%. The company had a funded debt-to-equity ratio of 4.4 to 1.0 and a stockholders’ equity ratio of 17.8%, each as of June 30, 2026. On a non-GAAP basis, the company had a funded debt-to-tangible equity ratio of 4.9 to 1.0, as of June 30, 2026. 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 (877) 407-0752 (toll-free) or (201) 389-0912 (international). 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 20 states across the United States. Each of its loan products 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, opening new branches as planned, and continuing to expand our lending partnership with Column N.A.; 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 evolving underwriting models and processes, including as to the effectiveness of Regional Management's 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 realize the anticipated benefits from our lending partnership with Column N.A.; the ability to make technological improvements as quickly as competitors; security breaches, cyber-attacks, failures in information systems, or fraudulent activity; the development and use of artificial intelligence; 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; any future public health crises, including the impact of such crisis on our operations and financial condition; 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; the impact of changes in tax laws and guidance, 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 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. 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. 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. View source version on businesswire.com: https://www.businesswire.com/news/home/20260729150106/en/ Contacts Investor RelationsGarrett Edson, (203) [email protected]

Regional Management reported a strong Q1 with $11.4 million net income ( $1.18 diluted EPS, +69% YoY), record quarterly revenue of $167 million, an 11% loan book expansion to $2.1 billion, and improved operating leverage with the operating expense ratio down 180 bps to 12.2%. Credit trends were broadly stable: 30+ day delinquency was 7.2% (up 10 bps YoY, down 30 bps sequentially), net credit losses rose modestly, the allowance rate ticked up to 10.4% despite a $1.4 million allowance decline from seasonal liquidation, and management is watching macro risks like elevated gas prices. Growth initiatives and outlook: the company will enter Florida in Q2 (its 20th state), its auto‑secured portfolio grew to $300 million (+38% YoY, ~14% of portfolio) with a 2% 30+ day delinquency, the bank partnership with Column is expanding to 12 branches, and guidance remains for ~10% full‑year portfolio growth and 20–25% net income growth (Q2 expected as the seasonal low). Interested in Regional Management Corp.? Here are five stocks we like better. MarketBeat Week in Review – 04/27 - 05/01 Regional Management (NYSE:RM) reported what management described as a “strong start to 2026,” highlighting higher earnings, continued portfolio growth, and improved operating efficiency during its first quarter 2026 earnings call. President and CEO Lakhbir Lamba said the company generated net income of $11.4 million, or $1.18 in diluted EPS, up 69% year-over-year. He attributed the performance to portfolio growth, revenue gains, and operating efficiency improvements. → Meta Posted Its Best Sales Growth Since 2021—So Why Did Shares Fall? The $880M Bet to Survive Real Estate's Reset The company’s loan portfolio grew by $214 million year-over-year to $2.1 billion, representing 11% growth, while revenue reached a first-quarter record and rose 9% from the prior-year period. Lamba also emphasized operating leverage, noting that G&A expenses declined 2% year-over-year and the operating expense ratio improved 180 basis points to 12.2%, which he called an “all-time best for the company.” EVP and Chief Financial and Administrative Officer Harp Rana added that return on equity improved to 12.2%, up 430 basis points year-over-year, reflecting “higher earnings and operating efficiency.” Total revenue was $167 million for the quarter. Rana said revenue yield declined sequentially and year-over-year due to seasonality and continued mix shift toward larger, lower-yielding loans, but he expects revenue yield to “increase modestly” sequentially in the second quarter, consistent with typical seasonal trends. → 5 Stocks to Buy in May Before the Next AI Surge Hits Home Sales Are Rising, But Who Stands to Benefit the Most? Management characterized credit as stable and within expectations. Lamba said 30+ day delinquency and net credit loss rates were flat year-over-year after adjusting for higher portfolio liquidation in the quarter, while noting the company is monitoring macroeconomic conditions such as elevated gas prices and inflation. Rana reported a 30+ day delinquency rate of 7.2%, up 10 basis points year-over-year and improving 30 basis points sequentially. He said the net credit loss rate increased modestly by 10 basis points year-over-year, and both delinquency and net credit loss rates included about 10 basis points of impact from higher liquidation in first quarter 2026 versus first quarter 2025. Looking to the second quarter, Rana said management expects delinquency and net credit losses to decline sequentially on normal seasonality. → Verizon’s Signal Strength: The Turnaround Call Is Loud and Clear The allowance for credit losses declined by $1.4 million during the quarter, which Rana said primarily reflected seasonal portfolio liquidation. The allowance rate increased slightly to 10.4% due to updated macro assumptions and a prudent stance. On the Q&A, Rana said the company increased the reserve rate versus the fourth quarter based on macro factors including oil and gas prices, and indicated the allowance rate could move depending on how those factors evolve. In response to questions about gas prices and consumer health, Rana said customers remained “adaptable” and “resilient,” and that the company is watching indicators including first payment defaults and delinquency. Lamba said the company is monitoring roll rates and paying particular attention to consumers with higher debt service burdens and lower free income if elevated gas prices persist. Lamba outlined several strategic priorities underway. The company plans to enter Florida in the second quarter, which he said will mark expansion into its 20th state. He also pointed to continued growth in the company’s auto-secured lending product. The auto-secured portfolio ended the quarter at $300 million in outstandings, up 38% year-over-year, and now represents 14% of total portfolio. Lamba said the product carried a 30+ day delinquency rate of 2% and continues to generate “attractive credit performance and returns.” During the Q&A, Rana said the auto-secured portfolio grew by $83 million and increased as a share of the portfolio from 11.6% last year to 14.3% this year. Another key initiative is Regional’s bank partnership strategy. Lamba noted that the company announced in early March the launch of a partnership with Column, a nationally chartered bank. He said the partnership is expected to provide benefits over time as it scales, including optimizing risk-adjusted yields, expanding relationships with existing customers, broadening the addressable market, creating greater product and operational uniformity across states, enabling faster entry into new markets, opening additional fee income opportunities, and increasing wallet share through new products. Regional launched the partnership in one branch with select products and has expanded to 12 branches. Lamba said management is encouraged by early origination results related to volume, mix, and revenue characteristics, while noting the data is currently focused primarily on origination, credit quality, and yield metrics, with early credit performance expected in coming months. In response to analyst questions about rollout timing, Rana said the company will remain “measured,” focusing first on ensuring the technology, branch operations, and customer experience work as expected, and then scaling through training and state-by-state expansion. Lamba said Regional is increasing investment in data, credit analytics, “emerging AI capabilities,” and fraud detection, including controls for first-party and synthetic fraud. He reiterated a long-term objective to reduce the net credit loss rate, with a stated “long-term target below 10%.” On the Q&A, Lamba said the company already has machine learning models in production across origination and collections that help it “take better risks” and “price better for risk.” While he did not provide specific guidance on AI-related operating expense impacts, he said the company believes automation of origination and servicing/collections workflows could reduce variable costs over time. Rana added that near-term operating expense dynamics will reflect continued investments, while productivity improvements should come from scale and, over the medium term, improvements in cost to originate and cost to service. Management said capital generation remained strong. Lamba stated the company generated $12 million of capital and returned more than $10 million to shareholders through dividends and share repurchases while continuing to fund portfolio growth. Rana said the board declared a $0.30 per share dividend and the company repurchased about 208,000 shares during the quarter. Rana also highlighted the company’s funding position, including $560 million of unused capacity and a high proportion of fixed-rate debt, which represented 84% of total debt at quarter end. He said funding costs are expected to “tick up slightly” in the second quarter. Looking ahead, Lamba said the company’s expectations for the year are unchanged, targeting full-year portfolio growth of 10% and net income growth of 20% to 25%, while remaining prepared to moderate growth if macroeconomic or credit conditions warrant. Both Lamba and Rana reiterated that the second quarter is expected to be the low point for net income due to seasonal impacts from first-quarter tax refund-related portfolio liquidation, followed by stronger performance in the third and fourth quarters. Rana also discussed the seasonal pattern of provisioning under CECL as the portfolio rebuilds in the second quarter and contributes to stronger revenue and earnings later in the year. Regional Management Corp., headquartered in Wilmington, North Carolina, is a consumer finance company specializing in installment loan products for underbanked individuals. Since its founding in 1977, the company has developed a network of field-based branches alongside a digital platform to offer credit solutions in rural and small-town markets across the United States. The company's core offerings include consumer installment loans for everyday purchases, auto refinancing and lease buyouts, as well as ancillary services such as insurance referrals. The article "Regional Management Q1 Earnings Call Highlights" was originally published by MarketBeat.

Image source: The Motley Fool. Wednesday, April 29, 2026 at 5 p.m. ET President and Chief Executive Officer — Latvir Lambda Chief Financial and Administrative Officer — Harpreet Rana Latvir Lambda, President and CEO of Regional Management Corp. Latvir Lambda: Thanks, Garrett, and good afternoon, everyone. We delivered a strong start to 2026 with solid financial performance, continued year-over-year portfolio growth, and further progress on our strategic priorities. Over the past few months, I have spent significant time across the organization continuing to listen, learn, and evaluate our business, and I am increasingly excited about the opportunities ahead. As I have deepened my understanding of our customers, products, and markets, I see a clear path to stronger performance and improving return outcomes over time. Our results in the first quarter reflect the strength of our operating model, disciplined execution, and continued investment in the business. Joining me on the call today is Harpreet Rana, our Chief Financial and Administrative Officer. I will begin with a summary of our first quarter results, provide an update on our strategic initiatives, and then Harpreet will walk through the financial details. We generated net income of $11.4 million, or $1.18 of diluted earnings per share, representing an increase of 69% year over year. These results were driven by continued portfolio growth, strong revenue performance, and further improvement in operating efficiency. Our loan portfolio increased by $214 million year over year to $2.1 billion, representing 11% growth, and we generated record revenue for our first quarter, up 9% compared to the prior-year period. Demand for our products remains healthy, and we continue to grow this portfolio in a disciplined manner. We also delivered strong operating leverage. Our operating expense ratio improved 180 basis points year over year to 12.2%, another all-time best for the company. Notably, revenue growth outpaced G&A and interest expense growth by a wide margin, reflecting the scalability of our model. Capital generation remained strong in the quarter. We had $12 million of capital generation and returned more than $10 million to shareholders through dividends and share repurchases while continuing to fund portfolio growth. Our 30-plus day delinquency and net credit loss rates in Q1 were flat year over year after adjusting for this year's larger portfolio liquidation. Our customers remain stable and resilient in the current economic environment, and overall credit trends continue to perform within our expectations. That said, we are closely monitoring macroeconomic conditions, including elevated gas prices and inflation, and we remain disciplined and conservative in our underwriting. As we discussed on our last call, we are focused on continuing to improve our net credit loss rate over time, with a long-term target below 10%. In support of this objective, we are increasing our investment in data, credit analytics, emerging AI capabilities, and fraud detection, including first-party and synthetic fraud controls. We are actively evaluating and beginning to deploy AI initiatives to enhance our underwriting, decisioning capabilities, and collections over time, while maintaining appropriate risk controls. These investments are critical to improving credit performance as we scale the portfolio and enter new markets. We continue to make good progress on our key strategic priorities. First, we are continuing to invest in market expansion. We plan to enter the state of Florida in the second quarter, which will mark our expansion into our twentieth state and represents an important long-term growth opportunity. Second, responsible portfolio growth remains a core priority. We are seeing continued strength in our auto secured lending product. The auto secured portfolio reached $300 million in outstandings at the end of the first quarter, representing a 38% increase year over year. It now accounts for 14% of our total portfolio and carries a 30-plus day delinquency rate of 2%. This product continues to deliver attractive credit performance and returns. Third, we are advancing our bank partnership strategy. In early March, we announced the launch of our partnership with Column, a nationally chartered bank. We expect this partnership to provide several important strategic benefits over time as it scales, including optimization of risk-adjusted yields, expanded relationships with existing customers and a broader addressable market, greater product and operational uniformity across states, faster entry into new markets, additional fee income opportunities, and increased wallet share over time from the introduction of new products. We launched the partnership in one branch with select products and have since expanded to 12 branches. We are encouraged by the early results, particularly in the origination trends, including volume, mix, and revenue characteristics. As we expected, at this stage, our data is primarily focused on origination, credit quality, and yield metrics, and we expect to begin seeing early credit performance in the coming months. We plan to expand the partnership throughout the year as we continue to evaluate results, assess customer adoption, and refine the strategy. Fourth, we are continuing to invest in an end-to-end digital originations capability. We see meaningful long-term opportunity in this channel, including the ability to reach higher-credit-quality customers and expand our addressable market. We are focused on creating a frictionless digital experience with strong fraud detection, credit underwriting, and risk-based pricing capabilities as we scale this channel. We are also evaluating the use of AI to enhance customer acquisition, improve decisioning speed and accuracy, and optimize channel performance over time. Our bank partnership will play an important role in supporting this initiative over time. Looking ahead, our expectations for the year remain unchanged. We continue to target full-year portfolio growth of 10% and net income growth in the range of 20% to 25%, while remaining prepared to moderate portfolio growth if warranted by macroeconomic or credit conditions. As a reminder, we expect second quarter net income to represent the low point for the year, consistent with normal seasonal trends. First quarter tax refund activity results in portfolio liquidation, which impacts second quarter revenue, while growth begins to accelerate as we move through the second quarter, driving sequentially higher CECL provisioning and G&A expenses. Portfolio growth in the second quarter and throughout the remainder of the year supports stronger revenue and earnings in the third and fourth quarters. We also expect net credit losses to remain seasonally elevated in the second quarter before improving to lower levels in the second half of the year. In addition, we anticipate the benefits of our bank partnership, portfolio growth, and other strategic initiatives will build throughout the year, supporting stronger earnings performance in the third and fourth quarters. Over the longer term, our objective remains clear. We will deliver sustainable, profitable growth while generating attractive returns for shareholders. We will continue to improve our return on equity through responsible portfolio growth, improving credit performance, operating leverage, and disciplined capital management. Regional Management Corp. is off to a strong start in 2026. We have a clear strategy, strong execution, and meaningful opportunities ahead, and we remain focused on delivering long-term value for our shareholders. With that, I will turn the call over to Harpreet. Harpreet Rana: Thank you, Latvir, and good afternoon, everyone. I will now take you through our first quarter results in more detail. Starting on page four of the supplemental presentation, we delivered another quarter of strong year-over-year improvement across our key financial metrics. Net income was $11.4 million, and diluted earnings per share were $1.18, both driven by continued year-over-year portfolio and revenue growth, stable credit performance, strong operating leverage, and a disciplined balance sheet. Return on equity improved to 12.2%, up 430 basis points year over year, reflecting higher earnings and operating efficiency. Turning to pages five and six, total originations were $388 million, down modestly year over year as expected due to a stronger tax refund season and disciplined underwriting. Portfolio growth remained strong, with ending net receivables of $2.1 billion, representing 11% year-over-year growth. This growth continues to be driven by larger loans, including our auto secured product, as well as contributions from new branches. Average receivables per branch increased to approximately $5.9 million, up nearly 11% year over year, reflecting improved branch productivity and continued maturation of our newer locations. From a sequential perspective, we saw a $36 million reduction in receivables, consistent with normal seasonal patterns driven by first quarter tax refund activity. Looking ahead, we expect to return to sequential portfolio growth in the second quarter, while maintaining the flexibility to adjust originations if macroeconomic or credit conditions warrant. Turning to page seven, total revenue was a first quarter record of $167 million, increasing 9% year over year, driven by higher average receivables. Total revenue yield declined on both a sequential and a year-over-year basis primarily due to normal seasonality and continued mix shift toward larger, lower-yielding loans. As we move into the second quarter, we expect revenue yield to increase modestly on a sequential basis, consistent with typical seasonal trends. Turning to page eight, credit performance remained stable. Our 30-plus day delinquency rate was 7.2%, up 10 basis points year over year, and improved 30 basis points sequentially, reflecting normal seasonal patterns. Our net credit loss rate increased modestly by 10 basis points year over year, also consistent with expectations. Both our delinquency rate and NCL rate included roughly 10 basis points of impact from higher liquidation in 2026 compared to 2025. Looking ahead to the second quarter, we expect delinquency and net credit losses to decline sequentially, consistent with seasonal patterns. Overall, credit performance remains in line with our expectations, and we continue to monitor macroeconomic conditions closely. Turning to page nine, the allowance for credit losses declined by $1.4 million during the quarter, primarily reflecting seasonal portfolio liquidation. The allowance rate increased slightly to 10.4%, reflecting updates to macroeconomic assumptions and continued prudence in reserving. Subject to economic conditions and credit performance, we expect our allowance rate to stay flat sequentially in the second quarter. Turning to page 10, we continue to demonstrate strong operating leverage. Our operating expense ratio improved to 12.2%, an all-time best and a 180 basis point improvement year over year, while we continue to invest in key initiatives. Total G&A expenses declined modestly year over year, reflecting continued discipline in managing expenses while scaling the business. For the second quarter, we expect a sequential increase in our operating expense ratio but a year-over-year improvement from the second quarter of last year. Turning to pages eleven and twelve, interest expense was $22.9 million, or 4.3% of average receivables on an annualized basis. We continue to maintain a strong and flexible funding profile, including $516 million of unused capacity, a diversified funding structure, and a high proportion of fixed-rate debt, which represented 84% of total debt at quarter end. This positions us well to support continued portfolio growth. Looking ahead, we anticipate that our funding costs will tick up slightly in the second quarter. Turning to page 13, we continue to generate strong capital and allocate it in a disciplined manner. During the quarter, we had approximately $12 million of capital generation, and we returned over $10 million to shareholders through dividends and share repurchases. Our Board declared a $0.30 per share dividend, and we repurchased approximately 208 thousand shares during the quarter. Finally, turning to page 14 and building on Latvir’s comments about second quarter net income and seasonality, I will provide some additional detail on how we expect the year to progress from a quarterly perspective. As we noted, we expect second quarter net income to represent the low point for the year, followed by stronger performance in the third and fourth quarters, consistent with our normal seasonal pattern. The primary driver of this cadence is the impact of first quarter tax refund activity, which results in seasonal portfolio liquidation in the first quarter and, in turn, impacts average receivables and revenue in the second quarter. At the same time, we begin to rebuild the portfolio during the second quarter, with growth typically accelerating as we move through the quarter. This results in a sequential increase in provision for credit losses in the second quarter as we reserve for new originations. As that portfolio growth takes hold, we see the benefit in the second half of the year. The increase in receivables exiting the second quarter drives higher revenue in both the third and fourth quarters, and those growth tailwinds continue throughout the back half of the year. While provisioning for loan growth remains elevated in the third and fourth quarters relative to the first quarter, it is more comparable to second quarter levels, allowing revenue growth to drive stronger earnings. From a credit perspective, we expect net credit losses to remain seasonally elevated in the second quarter before improving in the third and fourth quarters. Finally, as Latvir mentioned, we expect the benefits of our strategic initiatives to build as we move through the year, with increasing contribution in the second half. That concludes my remarks, and I will now turn the call back over to Latvir. Latvir Lambda: To close, we are very pleased with how we started 2026 and are encouraged by the momentum we are carrying into the rest of the year. We delivered strong results while continuing to invest in the business, improve underlying credit performance, and drive operating leverage. Importantly, we did this in a disciplined way that positions us well for sustainable, profitable growth. As we look ahead, our priorities are clear: continue growing the portfolio responsibly, improving credit outcomes, expanding into attractive new markets, and investing in our people, technology, and digital, data, and AI-driven capabilities to enhance risk-adjusted returns. We believe the opportunities in front of us across products, markets, and operating efficiency are compelling, and we are focused on executing against them thoughtfully. We have a strong foundation, a resilient customer base, and a highly capable team. I am confident in our ability to continue creating long-term value for our shareholders. My sincere thanks to the Regional Management Corp. team for delivering a great quarter. Operator: Thank you. We will now be conducting a question and answer session. You may press 2 if you would like to remove your question from the queue. Pick up your handset before pressing the star keys. Our first question will come from Kyle Joseph with Stephens. Kyle Joseph: Hey, good afternoon, guys. Thanks for taking my question. Just curious, a lot of moving parts in the first quarter with elevated tax refunds and then gas prices rising in March. Just kind of walk us through how loan demand and credit performed and the cadence of demand, and then how that has trended into April with gas prices remaining elevated? Harpreet Rana: Okay, Kyle. It is Harp. I will take that question. In terms of the elevated refunds, that was something that we had expected. We had all heard that refunds were going to be outsized, and they did come in higher than where they were last year but not quite as high as what everyone expected. Demand was where we expected it to be, knowing that refunds were going to be higher, so that is what we saw there. In terms of gas prices, it continues to be something that we are watching. What we found in the first quarter is our customers continue to be adaptable and resilient, but we do understand that inflation, and particularly gas prices, can take a toll on their wallet. So we continue to watch that through first payment default, delinquency rate, and also through any listening that we do when we have conversations with our customers, particularly even collections conversations, just to understand what is causing them the pain point. Right now, they appear to continue to be resilient, but again, in the second quarter, we continue to watch the gas prices, particularly given how much they have increased this week. Latvir Lambda: The only thing I will add to that is we are, as far as monitoring the portfolio, looking at all rates, both early and late stage, and our reserve posture reflects the higher gas prices and potentially some impact on inflation. The segment of consumer we are really monitoring is high debt service coverage or debt-to-income and low-premium consumer. If gas prices remain elevated for a prolonged period, discretionary spending gets tested, and we are continuing to monitor that. Kyle Joseph: Got it. Really helpful. Thanks. And then second question, kind of a two-part question. First, as you think about AI and you talked about incorporating AI, where do you think OpEx can go over that time frame? And then, as a follow-up, the relationship with Column is very exciting. Walk us through how you think about that impacting the P&L as that expands. Latvir Lambda: Thanks, Kyle. On AI, we see value in machine learning models in origination and collections—some we have mentioned in the past that are already in the company and deployed. Those models help us take better risk and then price better for risk. In terms of Gen AI and agent AI deployments, although I do not have a specific guidance for you on the subject, we believe both our cost to originate and cost to service/collect over time can come down as we automate both the origination and collections journeys using agent/AI workflows. That is the track we are taking in this space. In terms of your second question, on the Column partnership, we believe there are certain segments of consumers we cannot serve today because we are focused on implementing based on state laws and state charter. Those segments of consumers we believe we can originate using a national charter over time. That is a state-by-state specific analysis and execution. Second, we are now going to be in 20 states. We still have a bunch of work to do to expand in other markets. We believe a national charter execution and product uniformity increase our speed to market in those markets. We can scale up faster, especially with the digital originations capability we are building in parallel. Third, there are pockets of customers or business where we do not get paid for the risk we take. We are very thoughtful in evaluating opportunities where we can optimize risk and return better in the business as we go forward. Lastly, Column Bank’s technology stack is pretty advanced. We believe the consumer we serve has needs for a bunch of other products. We will evaluate each one of them on their own business cases and see if we can launch and diversify our product set through branches and/or digital channels using the Column tech stack and charter. That is a next year and beyond opportunity. Harp, anything you want to add? Harpreet Rana: Just in terms of where OpEx can go, how I would think about OpEx in the near term is, as we talk about some of the investment that we are going to continue to make in those areas, there will be some productivity improvement in the short to medium term, and then, really, in terms of OpEx, additional leverage will come through scale. If there are enhancements in the cost to originate and the cost to service, those will come in the medium term. That is how I would think about that. Kyle Joseph: Thanks for taking my questions. Operator: Thank you. Our next question comes from Vincent Albert Caintic with BTIG. Vincent Albert Caintic: Hi, good afternoon. Thanks for taking my questions, and I really appreciate the very detailed quarterly guidance that you gave. Thank you very much for that. First question, I wanted to go over some of the macro assumptions that you are having in your guidance estimates, particularly when you are thinking about your credit reserve rate. I noticed that it is going to be flat for the rest of the year implied in guidance. Just wondering what you are assuming in there—if there are any macro changes or what you are thinking about unemployment. Thank you. Harpreet Rana: Hey, Vincent. It is Harp. We did take the reserve rate up quarter over quarter versus where we were in the fourth quarter of last year, and the reason why we took that up was based upon some of the macro that we were seeing, which was basically oil prices and gas prices, and just being prudent around that in terms of what that could mean for our customers. In terms of where it is going to be next quarter or the quarter after, I cannot really say right now. In the prepared remarks, we have assumed that we are going to be flat to the 10.4% that we are at in the first quarter, barring any other macro news. It could go up if things get a little bit tighter—if oil continues to increase and inflation and gas prices continue to increase—or it could come back down if oil prices come back down to where they were a few weeks ago and gas prices moderate. Vincent Albert Caintic: Okay. Got it. That is helpful. Thank you. And then second question, how should we think about product growth? I appreciate the overall loan growth guidance, but if you could talk about small dollar loans versus large loans. It looks like auto is doing really well, and you sound pretty excited about that. If you could describe the mix shift in terms of where you want to go and where the customer demand is as you are thinking about the year. Thank you. Harpreet Rana: Vincent, it is Harp again. In terms of priorities, auto secured is one of the priorities that Latvir laid out in his prepared remarks, and you can see how our larger loans have grown over time. That continues to be a priority given the returns on that product. However, we remain very much committed to our small loans as well. We often talk about our graduation strategy. In 2025, we refinanced 26,000 of those small loan customers and moved them up to larger small loans or large loans, and we were also able to bring down their rate. That is really a part of our customer journey and relationship strategy. Harpreet Rana: So, Zach, it is really hard to give you what a normal number would be, but you are probably looking at last year as well. In terms of what we saw this year, I would say it is pretty typical. What we have read is tax refunds on average were up by about $300 over last year. In terms of our allowance, if you think about a $7 million bill, that swing of $8.4 million is going to drop right down to the bottom line. Of course, other things are going to continue to improve, such as revenue, which is going to continue to improve, and growth will end up being a tailwind the rest of the year. So you will see revenue improve, but in the second quarter, you will see that swing because of the growth in the CECL provision that will drop down to the bottom line. Zach Oster: Got it. Understood. And then one more question if I could add it on. Thinking about macro assumptions, any updated commentary on rate cuts or any assumptions going into or exiting the quarter on the allowance rate in terms of the rate cuts? Harpreet Rana: In terms of rate cuts, the Fed held flat today. That was our expectation. I think when we all entered the year, we probably thought that there was going to be one rate cut at the beginning of the year. With them holding flat, we have taken what the forecast is on rates, as well as the forecast and other macro narrative, into account when we did our reserve calculation. When we look at the macro, we do look at a ratings agency outlook and incorporate those into the future. We took all of that into consideration as well as, of course, our own core portfolio—product mix, delinquency status, FICO. We look at our own portfolio and then the macro assumptions for the rest of the year in order to come up with the reserve rate. We anticipated where we are today in terms of taking up that reserve rate, if that helps. Latvir Lambda: The biggest levers in our credit assumptions are the labor market—which has been stable—inflation, which is an outcome of everything that is happening around gas prices and what have you, and GDP. Those are big levers as we model our reserve content. The biggest uncertainty that remains on the credit side is gas prices and how prolonged this whole geopolitical conflict in the Middle East may be. Harpreet Rana: Zach, I will add one other thing to what Latvir just said. In terms of open jobs, we talk about that on these calls. There are still about 7 million open jobs, and we know that open jobs for our target segment matter looking out into the future when we do our reserve, just in terms of what the unemployment picture looks like. So right now, we will say that our customers are resilient and adaptable. There are plenty of open jobs available for them. As Latvir mentioned, inflation and gas prices—we continue to watch those as we move into the second quarter. Zach Oster: Understood. Thank you for the color. Operator: Moving next to William Joseph Dezellem with Tieton Capital. William Joseph Dezellem: Thank you. A couple of questions. First, relative to your originations in the first quarter, the small loan originations were down, call it, 19%, while the large loan originations were up 10%. Can you walk us through the dynamics that led to that differential in origination change versus the first quarter of last year? Harpreet Rana: Hey, Bill. Nice to hear from you. A couple of things. On the small loan originations, in higher tax season, we do expect our small loans to pay off, and we expect originations—in terms of response rate—to be muted in the first quarter. That is what you are seeing in 2026. When you compare that to 2025, we had 17 de novos come online between the fourth quarter and first quarter, and those de novos have mail support. Although you did have an origination impact on small loans last year, that was offset by the fact that we had those de novos coming online. That is part of what you are seeing in the year-over-year origination dynamics. And then in terms of the large loans, it is really the auto secured product. As we grow that business, that is what you are seeing on the large loan year over year. William Joseph Dezellem: That is very helpful. Thank you. And Before you buy stock in Regional Management, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Regional Management wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $497,606!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,306,846!* Now, it’s worth noting Stock Advisor’s total average return is 985% — a market-crushing outperformance compared to 200% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of April 29, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. RM Q1 2026 Earnings Transcript was originally published by The Motley Fool

- Net income of $11.4 million and diluted earnings per share of $1.18, up 63% and 69% year-over-year, respectively - - Originations of $388.0 million and 11.3% year-over-year portfolio growth drive record first quarter revenue - - Annualized operating expense ratio of 12.2%, an all-time best and an improvement of 180 basis points year-over-year - GREENVILLE, S.C., April 29, 2026--(BUSINESS WIRE)--Regional Management Corp. (NYSE: RM), a diversified consumer finance company, today announced results for the first quarter ended March 31, 2026. "We delivered a strong start to 2026, with solid financial results, continued year-over-year portfolio growth, and further improvement in operating efficiency," said Lakhbir S. Lamba, President and Chief Executive Officer of Regional Management Corp. "First quarter diluted EPS increased 69% year-over-year, driven by disciplined execution, stable credit performance, and the scalability of our operating model." "We continue to make good progress on our strategic priorities, including expanding our auto-secured portfolio, entering new markets, and advancing our bank partnership with Column," added Mr. Lamba. "Early results from the partnership are encouraging, and we believe it will enhance our ability to grow the business, broaden our product offerings, and improve risk-adjusted returns over time." "Looking ahead, we remain focused on responsible portfolio growth, improving credit performance, and driving operating leverage," continued Mr. Lamba. "We are confident in our outlook for 2026 and our ability to deliver sustainable, profitable growth and increasing returns for our shareholders." First Quarter 2026 Highlights Net income for the first quarter of 2026 was $11.4 million and diluted earnings per share was $1.18, up 62.7% and 68.6% year-over-year, respectively. Net finance receivables as of March 31, 2026 were $2.1 billion, an improvement of $213.7 million, or 11.3%, from the prior-year period, driven by strong performance from large loans, including demand for auto-secured products, and 10 new branches opened since March 31, 2025. Total originations of $388.0 million, down 1.1% from the prior-year period, due to a stronger tax refund season and disciplined underwriting. Large loan net finance receivables of $1.6 billion increased $245.7 million, or 18.3%, from the prior-year period and represented 75.6% of the total loan portfolio, compared to 71.2% in the prior-year period. Auto-secured net finance receivables of $301.3 million increased $82.6 million, or 37.7%, from the prior-year period and represented 14.3% of the total loan portfolio, compared to 11.6% in the prior-year period. Small loan net finance receivables of $512.5 million decreased $32.1 million, or 5.9%, from the prior-year period and represented 24.4% of the total loan portfolio, compared to 28.8% in the prior-year period. Record first quarter total revenue of $167.3 million, an increase of $14.3 million, or 9.4%, from the prior-year period, primarily due to growth in average net finance receivables. Total revenue yield (annualized total revenue as a percentage of average net finance receivables) for the first quarter of 2026 was 31.5%, compared to 32.4% in the prior-year period, a decrease of 90 basis points primarily due to product mix shift. Interest and fee yield (annualized interest and fee income as a percentage of average net finance receivables) decreased 60 basis points from the prior-year period primarily due to product mix shift. Provision for credit losses for the first quarter of 2026 was $64.9 million, an increase of $6.9 million, or 11.9%, from the prior-year period, driven by portfolio growth. The net credit loss rate (annualized net credit losses as a percentage of average net finance receivables) for the first quarter of 2026 was 12.5%, a 10 basis point increase compared to 12.4% in the prior-year period. Higher portfolio liquidation in the first quarter of 2026 compared to the prior-year period impacted the net credit loss rate by 10 basis points. The provision for credit losses for the first quarter of 2026 included a sequential reserve decrease of $1.4 million due to seasonal portfolio liquidation occurring during the first quarter of 2026. The allowance for credit losses was $219.5 million as of March 31, 2026, or 10.4% of net finance receivables, a 10 basis point increase sequentially, reflecting updates to macroeconomic assumptions. As of March 31, 2026, 30+ day contractual delinquencies totaled $150.9 million, or 7.2% of net finance receivables, a 30 basis point improvement sequentially due to seasonality and a 10 basis point increase from the prior-year period. Higher portfolio liquidation in the first quarter of 2026 compared to the prior-year period impacted the delinquency rate by 10 basis points. General and administrative expenses for the first quarter of 2026 were $64.7 million, an improvement of $1.4 million from the prior-year period. The operating expense ratio (annualized general and administrative expenses as a percentage of average net finance receivables) for the first quarter of 2026 was 12.2%, an all-time best. The ratio reflected improvements of 20 basis points and 180 basis points from 12.4% and 14.0% in the prior-quarter and prior-year periods, respectively. In the first quarter of 2026, the company repurchased 207,975 shares of its common stock at a weighted-average price of $36.06 per share under the company's stock repurchase program. Second Quarter 2026 Dividend The company’s Board of Directors has declared a dividend of $0.30 per common share for the second quarter of 2026. The dividend will be paid on June 10, 2026 to shareholders of record as of the close of business on May 20, 2026. 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 March 31, 2026, the company had net finance receivables of $2.1 billion and debt of $1.6 billion. The debt consisted of: $200.1 million on the company’s $355 million senior revolving credit facility, $66.0 million on the company’s aggregate $425 million revolving warehouse credit facilities, and $1.4 billion through the company’s asset-backed securitizations. As of March 31, 2026, the company’s unused capacity to fund future growth on its revolving credit facilities (subject to the borrowing base) was $516 million, or 66.1%, and the company had available liquidity of $135.6 million, including unrestricted cash on hand and immediate availability to draw down cash from its revolving credit facilities. As of March 31, 2026, the company’s fixed-rate debt as a percentage of total debt was 84%, with a weighted-average coupon of 4.7%. The company had a funded debt-to-equity ratio of 4.3 to 1.0 and a stockholders’ equity ratio of 18.1%, each as of March 31, 2026. On a non-GAAP basis, the company had a funded debt-to-tangible equity ratio of 4.7 to 1.0, as of March 31, 2026. 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 (877) 407-0752 (toll-free) or (201) 389-0912 (international). 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 19 states across the United States. Each of its loan products 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 evolving underwriting models and processes, including as to the effectiveness of Regional Management's 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 realize the anticipated benefits from our lending partnership with Column N.A.; the ability to make technological improvements as quickly as competitors; security breaches, cyber-attacks, failures in information systems, or fraudulent activity; the development and use of artificial intelligence; 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; any future public health crises, including the impact of such crisis on our operations and financial condition; 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; the impact of changes in tax laws and guidance, 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 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. 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. 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. View source version on businesswire.com: https://www.businesswire.com/news/home/20260429906769/en/ Contacts Investor Relations Garrett Edson, (203) 682-8331 [email protected]