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Exhibit 99.1

 

LOGO

Regional Management Corp. Announces Second Quarter 2017 Results

-    Net income of $6.1 million; diluted earnings per share of $0.52    -

-    Finance receivable growth of 12.5% from the prior year    -

-    30+ day delinquencies as a percentage of finance receivables of 6.5%    -

Greenville, South Carolina – August 1, 2017 – Regional Management Corp. (NYSE: RM), a diversified consumer finance company, today announced results for the second quarter ended June 30, 2017.

Second Quarter 2017 Highlights

 

    Net income for the second quarter of 2017 was $6.1 million, an increase of 3.8% from the prior-year period. Net income for the second quarter of 2017 included $0.3 million of after-tax Chief Operating Officer transition costs. Diluted earnings per share for the second quarter of 2017 was $0.52, based on a diluted share count of 11.7 million.

 

    Total finance receivables as of June 30, 2017 were $726.8 million, an increase of 12.5%, or $81.0 million, from the prior year, and up 4.6%, or $31.8 million, sequentially.

 

    Ninth consecutive quarter that total finance receivables have increased at least 10% over the prior-year period.

 

    Large loan finance receivables of $267.9 million increased $73.1 million, or 37.5%, from the prior-year period and now represent 36.9% of the total loan portfolio. Small loan finance receivables as of June 30, 2017 were $348.7 million, an increase of 9.0% over the prior-year period.

 

    Total revenue for the second quarter of 2017 was $65.3 million, an $8.0 million, or 14.0%, increase from the prior-year period.

 

    Interest and fee income increase of 13.7%, driven by a 12.5% increase in receivables compared to the prior-year period.

 

    Overall yield increase of 20 basis points on a year-over-year basis.

 

1


    Provision for credit losses for the second quarter of 2017 was $18.6 million, an increase of $5.2 million compared to the prior-year period. The provision for credit losses included $1.0 million related to a temporary shift of insurance claims expense. This line shift had no impact on the Company’s net income.

 

    Annualized net credit losses as a percentage of finance receivables were 9.9% (inclusive of 0.9% attributable to the shift in insurance claims expense noted above), an increase from 8.6% in the prior-year period. Sequentially, annualized net credit losses were down 100 basis points from 10.9% in the first quarter of 2017.

 

    Total delinquencies as a percentage of total finance receivables as of June 30, 2017 were 17.5%, an improvement from 18.3% as of June 30, 2016, and an increase from 15.7% as of March 31, 2017.

 

    30+ day contractual delinquencies were 6.5%, an improvement from 6.8% as of June 30, 2016 and flat sequentially.

 

    The Company entered into a $125.0 million revolving warehouse credit facility, which is expandable to $150.0 million, and also increased the committed line under its senior revolving credit facility to $638.0 million from its previous amount of $585.0 million.

“We were pleased with our second quarter performance, driven once again by double-digit top-line and finance receivables growth and further improving credit trends,” said Peter R. Knitzer, President and Chief Executive Officer of Regional Management. “Our ongoing focus on our core small and large loan categories led us to generate a 14% year-over-year increase in interest and fee income. In addition, we continued to concentrate on stabilizing credit, and as a result, we managed to reduce our net credit losses a full 100 basis points from the first quarter and keep our 30+ day delinquency level flat.”

“In addition to our strong results, in June we announced that we had entered into a $125 million warehouse credit facility, expandable to $150 million, and further increased our committed line under our revolving credit facility to $638 million,” added Mr. Knitzer. “Finally, we successfully converted our branches in Oklahoma and South Carolina to our new operating platform, and we remain on schedule to have all states converted to the new platform by the end of 2017. Overall, we continue to make good progress with our growth strategy and the buildout of our infrastructure in order to deliver long-term shareholder value.”

Second Quarter 2017 Results

Finance receivables outstanding at June 30, 2017 were $726.8 million, a 12.5% increase from $645.7 million in the prior year. Finance receivables increased primarily due to an increase in both the core small and large loan portfolios and the addition of eight net new branches.

 

2


For the second quarter ended June 30, 2017, the Company reported total revenue of $65.3 million, a 14.0% increase from $57.3 million in the prior-year period. Interest and fee income for the second quarter of 2017 was $59.8 million, a 13.7% increase from $52.6 million in the prior-year period, primarily due to an increase in the portfolios of both small and large loans compared to the prior-year period. Insurance income, net for the second quarter of 2017 was $3.1 million, an increase of $0.5 million from the prior-year period primarily due to a transition in insurance carriers, causing some of the Company’s insurance claims to impact net credit losses instead of insurance income. Other income for the second quarter of 2017 was $2.5 million, a 15.5% increase from the prior-year period and consistent with portfolio growth.

The provision for credit losses in the second quarter of 2017 was $18.6 million, compared to $13.4 million in the prior-year period. The increase was primarily due to the $81.0 million increase in finance receivables, the temporary shift of $1.0 million in insurance claims expense, and a $1.0 million build in allowance for credit losses compared to a slight release in the second quarter of 2016.

Net credit losses were $17.6 million in the second quarter of 2017, compared to $13.4 million in the prior-year period, consistent with portfolio growth. Net credit losses for the second quarter of 2017 included $1.6 million of losses attributable to a temporary shift of certain insurance claims expense into net credit losses during a transition in the Company’s insurance provider. Annualized net credit losses as a percentage of average finance receivables in the second quarter of 2017 were 9.9% (inclusive of 0.9% attributable to the shift in insurance claims expense noted above), an increase from 8.6% in the prior-year period, but an improvement from 10.9% in the first quarter of 2017.

General and administrative expenses for the second quarter of 2017 were $31.6 million, an increase of 7.1%, or $2.1 million, from the prior-year period. General and administrative expenses for the second quarters of 2017 and 2016 included $0.3 million and $0.6 million of loan system conversion costs, respectively. Sequentially, general and administrative expenses increased $0.2 million, or 0.6%, from the first quarter of 2017 as increased marketing and personnel costs were mostly offset by a decrease in other expenses.

Net income for the second quarter of 2017 was $6.1 million, an increase from $5.9 million in the prior-year period. Diluted earnings per share for the second quarter of 2017 were $0.52, an increase from $0.49 in the prior-year period.

First Half 2017 Results

For the six months ended June 30, 2017, the Company reported total revenue of $131.2 million, a 15.0% increase from $114.0 million in the prior-year period. Interest and fee income for the six months ended June 30, 2017 was $119.0 million, a 14.6% increase from $103.9 million in the prior-year period, primarily due to an increase in the portfolios of both small and large installment loans compared to the prior-year period. Insurance income, net for the six months ended June 30, 2017 was $6.9 million, a 24.4% increase from the prior-year period, in part due to the temporary shift of certain claims expense into provision for credit losses during the Company’s transition to a new insurance provider. Other income for the six months ended June 30, 2017 was $5.2 million, a 13.8% increase from the prior-year period.

 

3


The provision for credit losses for the six months ended June 30, 2017 was $37.7 million versus $27.2 million in the prior-year period. Net credit losses for the six months ended June 30, 2017 were $37.0 million, which includes $2.6 million of losses attributable to a temporary shift of certain insurance claims expense into net credit losses during a transition in the Company’s insurance provider, compared to $28.4 million in the prior-year period. Annualized net credit losses as a percentage of average finance receivables for the six months ended June 30, 2017 were 10.4% (inclusive of 0.7% attributable to the shift in insurance claims expense noted above), an increase from 9.1% in the prior-year period.

General and administrative expenses for the six months ended June 30, 2017 were $63.1 million, an increase of $3.7 million, or 6.3%, from $59.4 million in the prior-year period. Included in the six months 2017 and 2016 results were $0.8 million and $1.0 million in loan system conversion costs, respectively.

Net income for the six months ended June 30, 2017 was $13.8 million, a 24.2% increase compared to net income of $11.1 million in the prior-year period. The net income increase for the six months ended June 30, 2017 was partially due to $1.5 million of tax benefits from the exercise or vesting of share-based compensation that occurred during the first half of 2017. Diluted earnings per share for the six months ended June 30, 2017 was $1.17 compared to $0.89 in the prior-year period.

2017 De Novo Outlook

As of June 30, 2017, the Company’s branch network consisted of 347 locations. Regional Management opened 3 net de novo branches in the second quarter of 2017 and a total of 8 net de novo branches for the first half of 2017. For the full year 2017, the Company maintains its plan to open between 10 and 15 de novo branches.

Liquidity and Capital Resources

As of June 30, 2017, the Company had finance receivables of $726.8 million and outstanding long-term debt of $497.0 million (consisting of $446.6 million of long-term debt on its $638.0 million senior revolving credit facility, $24.0 million of long-term debt on its $125.0 million revolving warehouse credit facility, and $26.4 million of long-term debt on its $75.7 million amortizing loan). During the second quarter of 2017, the Company entered into a $125.0 million revolving warehouse credit facility, which is expandable to $150.0 million and is secured by certain large loan receivables. The warehouse credit facility has an initial term of 18 months, to be followed by a 12-month amortization period.

Conference Call Information

Regional Management Corp. will host a conference call and webcast today at 5:00 PM ET to discuss these results.

The dial-in number for the conference call is (855) 590-2959 (toll-free) or (503) 343-6651 (direct), passcode 53608307. Please dial the number 10 minutes prior to the scheduled start time.

 

4


*** A supplemental slide presentation will be made available on Regional Management’s website prior to the earnings call at www.RegionalManagement.com. ***

In addition, a live webcast of the conference call will also be available on Regional Management’s website at www.RegionalManagement.com.

A replay will be available following the end of the call through Tuesday, August 8, 2017, by telephone at (855) 859-2056 (toll-free) or (404) 537-3406 (direct), passcode 53608307. A webcast replay of the call will be available at www.RegionalManagement.com for one year following the call.

Forward-Looking Statements

This press release may contain various “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, which represent Regional Management Corp.’s expectations or beliefs concerning future events. 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 are about matters that are inherently subject to risks and uncertainties, many of which are outside of the control of Regional Management. Factors that could cause actual results or performance to differ from the expectations expressed or implied in such forward-looking statements include, but are not limited to, the following: changes in general economic conditions, including levels of unemployment and bankruptcies; risks associated with Regional Management’s transition to a new loan origination and servicing software system; risks related to opening new branches, including the ability or inability to open new branches as planned; risks inherent in making loans, including repayment risks and value of collateral, which risks may increase in light of adverse or recessionary economic conditions; changes in interest rates; the risk that Regional Management’s existing sources of liquidity become insufficient to satisfy its needs or that its access to these sources becomes unexpectedly restricted; changes in federal, state, or local laws, regulations, or regulatory policies and practices, and risks associated with the manner in which laws and regulations are interpreted, implemented, and enforced; the timing and amount of revenues that may be recognized by Regional Management; changes in current revenue and expense trends (including trends affecting delinquencies and credit losses); changes in Regional Management’s markets and general changes in the economy (particularly in the markets served by Regional Management); changes in the competitive environment in which Regional Management operates or in the demand for its products; risks related to acquisitions; changes in operating and administrative expenses; and the departure, transition, or replacement of key personnel. Such factors and others are discussed in greater detail in Regional Management’s filings with the Securities and Exchange Commission. Regional Management will not update the information contained in this press release beyond the publication date, except to the extent required by law, and is not responsible for changes made to this document by wire services or Internet services.

 

5


About Regional Management Corp.

Regional Management Corp. (NYSE: RM) is a diversified consumer finance company providing a broad array of loan products primarily to customers with limited access to consumer credit from banks, thrifts, credit card companies, and other traditional lenders. Regional Management began operations in 1987 with four branches in South Carolina and has since expanded its branch network across South Carolina, Texas, North Carolina, Tennessee, Alabama, Oklahoma, New Mexico, Georgia, and Virginia. Each of its loan products is structured on a fixed rate, fixed term basis with fully amortizing equal monthly installment payments and is repayable at any time without penalty. Regional Management’s loans are sourced through its multiple channel platform, including in its branches, through direct mail campaigns, independent and franchise automobile dealerships, online credit application networks, retailers, and its consumer website. For more information, please visit www.RegionalManagement.com.

Contact:

Investor Relations

Garrett Edson, (203) 682-8331

 

6


Regional Management Corp. and Subsidiaries

Consolidated Statements of Income

(Unaudited)

(in thousands, except per share amounts)

 

                 Better (Worse)                 Better (Worse)  
     2Q 17     2Q 16     $     %     YTD 17     YTD 16     $     %  

Revenue

                

Interest and fee income

   $ 59,787     $ 52,589     $ 7,198       13.7   $ 119,042     $ 103,889     $ 15,153       14.6

Insurance income, net

     3,085       2,601       484       18.6     6,890       5,540       1,350       24.4

Other income

     2,466       2,135       331       15.5     5,226       4,593       633       13.8
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenue

     65,338       57,325       8,013       14.0     131,158       114,022       17,136       15.0
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Expenses

                

Provision for credit losses

     18,589       13,386       (5,203     (38.9 )%      37,723       27,177       (10,546     (38.8 )% 

Personnel

     18,387       16,674       (1,713     (10.3 )%      36,555       33,801       (2,754     (8.1 )% 

Occupancy

     5,419       4,770       (649     (13.6 )%      10,704       9,633       (1,071     (11.1 )% 

Marketing

     1,779       2,062       283       13.7     2,984       3,577       593       16.6

Other

     6,057       6,042       (15     (0.2 )%      12,853       12,342       (511     (4.1 )% 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total general and administrative

     31,642       29,548       (2,094     (7.1 )%      63,096       59,353       (3,743     (6.3 )% 

Interest expense

     5,221       4,811       (410     (8.5 )%      10,434       9,521       (913     (9.6 )% 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     9,886       9,580       306       3.2     19,905       17,971       1,934       10.8

Income taxes

     3,751       3,668       (83     (2.3 )%      6,136       6,883       747       10.9
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 6,135     $ 5,912     $ 223       3.8   $ 13,769     $ 11,088     $ 2,681       24.2
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income per common share:

                

Basic

   $ 0.53     $ 0.50     $ 0.03       6.0   $ 1.19     $ 0.90     $ 0.29       32.2
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 0.52     $ 0.49     $ 0.03       6.1   $ 1.17     $ 0.89     $ 0.28       31.5
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Weighted-average shares outstanding:

                

Basic

     11,554       11,756       202       1.7     11,524       12,256       732       6.0
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     11,730       11,974       244       2.0     11,723       12,462       739       5.9
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Return on average assets (annualized)

     3.5     3.8         3.9     3.6    
  

 

 

   

 

 

       

 

 

   

 

 

     

Return on average equity (annualized)

     11.3     12.0         12.9     11.1    
  

 

 

   

 

 

       

 

 

   

 

 

     

 

7


Regional Management Corp. and Subsidiaries

Consolidated Balance Sheets

(Unaudited)

(in thousands, except par value amounts)

 

                 Increase (Decrease)  
     2Q 17     2Q 16     $     %  

Assets

        

Cash

   $ 3,678     $ 2,827     $ 851       30.1

Gross finance receivables

     933,257       820,688       112,569       13.7

Unearned finance charges and insurance premiums

     (206,490     (174,944     (31,546     (18.0 )% 
  

 

 

   

 

 

   

 

 

   

 

 

 

Finance receivables

     726,767       645,744       81,023       12.5

Allowance for credit losses

     (42,000     (36,200     (5,800     (16.0 )% 
  

 

 

   

 

 

   

 

 

   

 

 

 

Net finance receivables

     684,767       609,544       75,223       12.3

Property and equipment

     11,653       9,208       2,445       26.6

Restricted cash

     10,630       8,237       2,393       29.1

Intangible assets

     8,480       4,601       3,879       84.3

Deferred tax asset

     1,776       —         1,776       100.0

Other assets

     6,549       8,386       (1,837     (21.9 )% 
  

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

   $ 727,533     $ 642,803     $ 84,730       13.2
  

 

 

   

 

 

   

 

 

   

 

 

 

Liabilities and Stockholders’ Equity

        

Liabilities:

        

Long-term debt

   $ 497,049     $ 441,147     $ 55,902       12.7

Unamortized debt issuance costs

     (5,539     (2,285     (3,254     (142.4 )% 
  

 

 

   

 

 

   

 

 

   

 

 

 

Net long-term debt

     491,510       438,862       52,648       12.0

Accounts payable and accrued expenses

     14,656       10,571       4,085       38.6

Deferred tax liability

     —         446       (446     (100.0 )% 
  

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities

     506,166       449,879       56,287       12.5

Commitments and Contingencies

        

Stockholders’ equity:

        

Preferred stock ($0.10 par value, 100,000 shares authorized, no shares issued or outstanding)

     —         —         —         —    

Common stock ($0.10 par value, 1,000,000 shares authorized, 13,201 shares issued and 11,655 shares outstanding at June 30, 2017 and 12,961 shares issued and 11,415 shares outstanding at June 30, 2016)

     1,320       1,296       24       1.9

Additional paid-in-capital

     92,535       90,828       1,707       1.9

Retained earnings

     152,558       125,846       26,712       21.2

Treasury stock (1,546 shares at June 30, 2017 and 2016)

     (25,046     (25,046     —         0.0
  

 

 

   

 

 

   

 

 

   

 

 

 

Total stockholders’ equity

     221,367       192,924       28,443       14.7
  

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 727,533     $ 642,803     $ 84,730       13.2
  

 

 

   

 

 

   

 

 

   

 

 

 

 

8


Regional Management Corp. and Subsidiaries

Selected Financial Data

(Unaudited)

(in thousands, except per share amounts)

 

     Averages and Yields  
     2Q 17     1Q 17     2Q 16  
     Average Finance
Receivables
     Average Yield
(Annualized)
    Average Finance
Receivables
     Average Yield
(Annualized)
    Average Finance
Receivables
     Average Yield
(Annualized)
 

Small loans

   $ 341,184        42.9   $ 349,521        42.3   $ 313,388        43.0

Large loans

     253,049        29.0     239,033        28.7     178,683        28.8

Automobile loans

     83,082        16.5     88,150        16.6     103,626        17.9

Retail loans

     30,486        19.1     32,560        18.7     29,007        19.1
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total interest and fee yield

   $ 707,801        33.8   $ 709,264        33.4   $ 624,704        33.7
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total revenue yield

   $ 707,801        36.9   $ 709,264        37.1   $ 624,704        36.7
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

 

     Components of Increase in Interest and Fee Income
2Q 17 Compared to 2Q 16
Increase (Decrease)
 
       Volume          Rate          Volume & Rate          Net    

Small loans

   $ 2,988      $ (81    $ (7    $ 2,900  

Large loans

     5,358        60        26        5,444  

Automobile loans

     (921      (365      73        (1,213

Retail loans

     71        (3      (1      67  

Product mix

     (501      568        (67      —    
  

 

 

    

 

 

    

 

 

    

 

 

 

Total increase in interest and fee income

   $ 6,995      $ 179      $ 24      $ 7,198  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

     Net Loans Originated (1)  
     2Q 17      1Q 17      QoQ $
Inc (Dec)
    QoQ %
Inc (Dec)
    2Q 16      YoY $
Inc (Dec)
    YoY %
Inc (Dec)
 

Small loans

   $ 160,380      $ 115,359      $ 45,021       39.0   $ 153,049      $ 7,331       4.8

Large loans

     86,771        57,020        29,751       52.2     72,174        14,597       20.2

Automobile loans

     5,828        8,789        (2,961     (33.7 )%      9,355        (3,527     (37.7 )% 

Retail loans

     6,353        6,264        89       1.4     8,627        (2,274     (26.4 )% 
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Total net loans originated

   $ 259,332      $ 187,432      $ 71,900       38.4   $ 243,205      $ 16,127       6.6
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

 

(1) Represents the balance of loan origination and refinancing net of unearned finance charges

 

9


     Other Key Metrics  
     2Q 17     1Q 17     2Q 16  

Net credit losses

   $ 17,589     $ 19,384     $ 13,416  

Percentage of average finance receivables (annualized)

     9.9     10.9     8.6

Provision for credit losses

   $ 18,589     $ 19,134     $ 13,386  

Percentage of average finance receivables (annualized)

     10.5     10.8     8.6

Percentage of total revenue

     28.5     29.1     23.4

General and administrative expenses

   $ 31,642     $ 31,454     $ 29,548  

Percentage of average finance receivables (annualized)

     17.9     17.7     18.9

Percentage of total revenue

     48.4     47.8     51.5

Same store results:

      

Finance receivables at period-end

   $ 723,547     $ 682,218     $ 611,589  

Finance receivable growth rate

     12.0     12.6     9.5

Number of branches in calculation

     336       329       306  

 

     Finance Receivables by Product  
     2Q 17      1Q 17      QoQ $
Inc (Dec)
    QoQ %
Inc (Dec)
    2Q 16      YoY $
Inc (Dec)
    YoY %
Inc (Dec)
 

Small loans

   $ 348,742      $ 335,552      $ 13,190       3.9   $ 320,077      $ 28,665       9.0

Large loans

     267,921        242,380        25,541       10.5     194,857        73,064       37.5
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Total core loans

     616,663        577,932        38,731       6.7     514,934        101,729       19.8

Automobile loans

     79,861        85,869        (6,008     (7.0 )%      100,721        (20,860     (20.7 )% 

Retail loans

     30,243        31,203        (960     (3.1 )%      30,089        154       0.5
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Total finance receivables

   $ 726,767      $ 695,004      $ 31,763       4.6   $ 645,744      $ 81,023       12.5
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Number of branches at period end

     347        344        3       0.9     338        9       2.7

Average finance receivables per branch

   $ 2,094      $ 2,020      $ 74       3.7   $ 1,910      $ 184       9.6
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

 

10


     Contractual Delinquency by Aging  
     2Q 17     1Q 17     2Q 16  

Allowance for credit losses

   $ 42,000        5.8   $ 41,000        5.9   $ 36,200        5.6

Current

     599,344        82.5     586,085        84.3     527,080        81.7

1 to 29 days past due

     80,064        11.0     63,978        9.2     74,439        11.5
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Delinquent accounts:

               

30 to 59 days

     17,018        2.3     13,860        2.1     16,710        2.5

60 to 89 days

     10,726        1.5     9,889        1.4     10,045        1.6

90 to 119 days

     7,793        1.0     7,569        1.0     7,237        1.1

120 to 149 days

     6,302        0.9     6,975        1.0     5,358        0.8

150 to 179 days

     5,520        0.8     6,648        1.0     4,875        0.8
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total contractual delinquency

   $ 47,359        6.5   $ 44,941        6.5   $ 44,225        6.8
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total finance receivables

   $ 726,767        100.0   $ 695,004        100.0   $ 645,744        100.0
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

1 day and over past due

   $ 127,423        17.5   $ 108,919        15.7   $ 118,664        18.3
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

 

     Contractual Delinquency by Product  
     2Q 17     1Q 17     2Q 16  

Small loans

   $ 26,610        7.6   $ 26,573        7.9   $ 26,436        8.3

Large loans

     13,839        5.2     12,142        5.0     8,459        4.3

Automobile loans

     5,172        6.5     4,513        5.3     7,768        7.7

Retail loans

     1,738        5.7     1,713        5.5     1,562        5.2
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total contractual delinquency

   $ 47,359        6.5   $ 44,941        6.5   $ 44,225        6.8
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

 

11


     Quarterly Trend  
     2Q 16      3Q 16      4Q 16      1Q 17      2Q 17      QoQ $
B(W)
    YoY $
B(W)
 

Revenue

                   

Interest and fee income

   $ 52,589      $ 57,420      $ 59,654      $ 59,255      $ 59,787      $ 532     $ 7,198  

Insurance income, net

     2,601        2,346        1,570        3,805        3,085        (720     484  

Other income

     2,135        2,709        2,797        2,760        2,466        (294     331  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total revenue

     57,325        62,475        64,021        65,820        65,338        (482     8,013  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Expenses

                   

Provision for credit losses

     13,386        16,410        19,427        19,134        18,589        545       (5,203

Personnel

     16,674        18,180        16,998        18,168        18,387        (219     (1,713

Occupancy

     4,770        5,175        5,251        5,285        5,419        (134     (649

Marketing

     2,062        1,786        1,474        1,205        1,779        (574     283  

Other

     6,042        5,312        5,103        6,796        6,057        739       (15
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total general and administrative

     29,548        30,453        28,826        31,454        31,642        (188     (2,094

Interest expense

     4,811        5,116        5,287        5,213        5,221        (8     (410
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Income before income taxes

     9,580        10,496        10,481        10,019        9,886        (133     306  

Income taxes

     3,668        4,020        4,014        2,385        3,751        (1,366     (83
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Net income

   $ 5,912      $ 6,476      $ 6,467      $ 7,634      $ 6,135      $ (1,499   $ 223  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Net income per common share:

                   

Basic

   $ 0.50      $ 0.57      $ 0.57      $ 0.66      $ 0.53      $ (0.13   $ 0.03  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Diluted

   $ 0.49      $ 0.56      $ 0.55      $ 0.65      $ 0.52      $ (0.13   $ 0.03  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Weighted-average shares outstanding:

                   

Basic

     11,756        11,384        11,408        11,494        11,554        (60     202  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Diluted

     11,974        11,664        11,763        11,715        11,730        (15     244  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Net interest margin

   $ 52,514      $ 57,359      $ 58,734      $ 60,607      $ 60,117      $ (490   $ 7,603  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Net credit margin

   $ 39,128      $ 40,949      $ 39,307      $ 41,473      $ 41,528      $ 55     $ 2,400  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 
     2Q 16      3Q 16      4Q 16      1Q 17      2Q 17      QoQ $
Inc (Dec)
    YoY $
Inc (Dec)
 

Total assets

   $ 642,803      $ 691,329      $ 712,224      $ 690,432      $ 727,533      $ 37,101     $ 84,730  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Finance receivables

   $ 645,744      $ 696,149      $ 717,775      $ 695,004      $ 726,767      $ 31,763     $ 81,023  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Allowance for credit losses

   $ 36,200      $ 39,100      $ 41,250      $ 41,000      $ 42,000      $ 1,000     $ 5,800  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Long-term debt

   $ 441,147      $ 481,766      $ 491,678      $ 462,994      $ 497,049      $ 34,055     $ 55,902  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 
     General & Administrative Expenses Trend  
     2Q 16      3Q 16      4Q 16      1Q 17      2Q 17      QoQ $
B(W)
    YoY $
B(W)
 

Legacy operations expenses

   $ 18,224      $ 19,596      $ 19,238      $ 20,497      $ 19,208      $ 1,289     $ (984

2017 new branch expenses

              276        499        (223     (499
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total operations expenses

     18,224        19,596        19,238        20,773        19,707        1,066       (1,483

Marketing expenses

     2,062        1,786        1,474        1,205        1,779        (574     283  

Home office expenses

     9,262        9,071        8,114        9,476        10,156        (680     (894
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total G&A expenses

   $ 29,548      $ 30,453      $ 28,826      $ 31,454      $ 31,642      $ (188   $ (2,094
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

 

12


     Averages and Yields  
     YTD 17     YTD 16  
     Average Finance
Receivables
     Average Yield     Average Finance
Receivables
     Average Yield  

Small loans

   $ 346,752        42.4   $ 320,806        42.3

Large loans

     246,564        28.8     166,312        28.4

Automobile loans

     85,580        16.5     107,463        18.1

Retail loans

     31,569        18.8     28,494        19.1
  

 

 

    

 

 

   

 

 

    

 

 

 

Total interest and fee yield

   $ 710,465        33.5   $ 623,075        33.3
  

 

 

    

 

 

   

 

 

    

 

 

 

Total revenue yield

   $ 710,465        36.9   $ 623,075        36.6
  

 

 

    

 

 

   

 

 

    

 

 

 

 

     Components of Increase in Interest and Fee Income
YTD 17 Compared to YTD 16
Increase (Decrease)
 
       Volume          Rate          Volume & Rate          Net    

Small loans

   $ 5,485      $ 192      $ 15      $ 5,692  

Large loans

     11,410        284        137        11,831  

Automobile loans

     (1,975      (809      165        (2,619

Retail loans

     294        (41      (4      249  

Product mix

     (643      884        (241      —    
  

 

 

    

 

 

    

 

 

    

 

 

 

Total increase in interest and fee income

   $ 14,571      $ 510      $ 72      $ 15,153  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

     Net Loans Originated (1)  
     YTD 17      YTD 16      YTD $
Inc (Dec)
     YTD %
Inc (Dec)
 

Small loans

   $ 275,739      $ 267,426      $ 8,313        3.1

Large loans

     143,791        120,743        23,048        19.1

Automobile loans

     14,617        17,840        (3,223      (18.1 )% 

Retail loans

     12,617        17,328        (4,711      (27.2 )% 
  

 

 

    

 

 

    

 

 

    

 

 

 

Total net loans originated

   $ 446,764      $ 423,337      $ 23,427        5.5
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) Represents the balance of loan origination and refinancing net of unearned finance charges

 

     Other Key Metrics  
     YTD 17     YTD 16  

Net credit losses

   $ 36,973     $ 28,429  

Percentage of average finance receivables (annualized)

     10.4     9.1

Provision for credit losses

   $ 37,723     $ 27,177  

Percentage of average finance receivables (annualized)

     10.6     8.7

Percentage of total revenue

     28.8     23.8

General and administrative expenses

   $ 63,096     $ 59,353  

Percentage of average finance receivables (annualized)

     17.8     19.1

Percentage of total revenue

     48.1     52.1

 

13