Regional Management Corp. RM, a diversified specialty consumer finance company, today announced results for the second quarter ended June 30, 2015.
Second Quarter 2015 Highlights
- Net income for the second quarter of 2015 was $5.4 million, an increase of 22.5% from the prior-year period. Diluted earnings per share were $0.41 based on a diluted share count of 13.1 million.
-
Regional Management's most important loan categories continue to grow:
- Large loan finance receivables as of June 30, 2015 were $93.2 million, an increase of 47.2% sequentially and 116.8% compared to the prior-year period.
- Branch small loan and convenience check finance receivables, collectively, as of June 30, 2015 were $314.9 million, an increase of 8.0% sequentially and 14.3% over the prior-year period.
- Total finance receivables as of June 30, 2015 were $572.5 million, an increase of 10.5% from the prior-year period.
- Total second quarter of 2015 revenue was $53.0 million, an 11.7% increase from the prior-year period.
- Total delinquencies as a percentage of total finance receivables as of June 30, 2015 were 20.6%, compared to 23.6% as of June 30, 2014 and 19.2% as of March 31, 2015.
- Net charge-offs were $12.9 million for the second quarter of 2015, or 9.4% of average finance receivables, improving from 10.5% in the prior-year period. The related provision for credit losses for the second quarter of 2015 was $12.1 million, or 22.8% of revenue, a decline from 28.7% in the prior-year period.
- Regional Management opened 10 new branches in the second quarter of 2015. As of June 30, 2015, Regional Management's branch network consisted of 316 locations.
"We are gratified that all of our efforts toward improving the operational performance of the business helped produce improved results in the second quarter," said Michael R. Dunn, Chief Executive Officer of Regional Management Corp. "We had a strong quarter in receivable growth driven by improved marketing initiatives and in-branch activity. Large loans, which we continue to believe will be a strong driver of our future growth, increased 47% on a sequential basis and 117% from the prior-year period. Branch small loans and convenience checks, which have always been important to the company, also generated solid double-digit growth from the prior-year period. The strong receivable performance led to revenue growth of 11.7% compared to the prior-year period and 1.0% compared to the first quarter of 2015."
"Total delinquency at the end of the quarter was 20.6%, down from 23.6% in the prior-year period, and up 1.4% from our record low first quarter of 2015," continued Mr. Dunn. "This level of delinquency is a return to a more normalized profile for the business. We also continued to make progress on achieving operational efficiencies. Total expenses in our branches were $17.1 million, up $1.6 million compared to the prior-year period, but importantly down $2.3 million from the first quarter of 2015, driven primarily by a reduction in our existing branch staffing of 130 people since the end of 2014. Moving forward, our focus remains on growing our core small and large loan portfolios, while maintaining more normalized levels of delinquencies and continuing to focus on our expense structure. Overall, we believe we have solidly positioned ourselves for future consistent top and bottom line growth, and I am proud of the entire Regional Management team for their hard work and dedication in getting us back on track in a short period of time."
Second Quarter 2015 Results
Finance receivables outstanding at June 30, 2015 were $572.5 million, a 10.5% increase from $518.0 million in the prior-year period. Finance receivables increased primarily due to enhanced efforts to increase originations of both small and large installment loans and the addition of 23 de novo branches since June 30, 2014.
For the second quarter ended June 30, 2015, Regional Management reported total revenue of $53.0 million, an 11.7% increase from $47.4 million in the prior-year period. Interest and fee income for the second quarter of 2015 was $47.7 million, an 11.0% increase from $43.0 million in the prior-year period, primarily due to a significant increase in the portfolios of both small and large installment loans compared to the prior-year period. Insurance income for the second quarter of 2015 was $3.1 million, a 25.8% increase from the prior-year period.
Provision for credit losses in the second quarter of 2015 was $12.1 million versus $13.6 million in the prior-year period. Net charge-offs of $12.9 million in the second quarter of 2015 exceeded the provision by $0.8 million as the Company released a portion of the allowance recorded in 2014 for convenience checks. Annualized net charge-offs as a percentage of average finance receivables for the second quarter of 2015 were 9.4%, an improvement from 10.5% in the prior-year period.
On a sequential basis, provision for credit losses increased 24.6%, reflecting the significant increase in small and large loan originations during the second quarter of 2015.
General and administrative expenses for the second quarter of 2015 were $28.2 million, an increase of $5.0 million, or 21.7%, from $23.2 million in the prior-year period. The increase was driven primarily by $1.6 million of additional branch expenses and $3.2 million of additional home office expenses. Branch expenses include changes in staffing and incentive plans for all branches, as well as the expenses associated with 23 branches added since June 30, 2014. The increase in home office expenses includes additional personnel, incentive plan changes and consulting fees.
Net income for the second quarter of 2015 was $5.4 million, a 22.5% increase compared to net income of $4.4 million in the prior-year period. Diluted earnings per share for the second quarter of 2015 were $0.41, an increase from $0.34 in the prior-year period.
First Half 2015 Results
For the six months ended June 30, 2015, Regional Management reported total revenue of $105.5 million, an 8.8% increase from $97.0 million in the prior-year period. Interest and fee income for the six months ended June 30, 2015 was $94.7 million, an 8.8% increase from $87.0 million in the prior-year period, primarily due to a significant increase in the portfolios of both small and large installment loans compared to the prior-year period. Insurance income for the six months ended June 30, 2015 was $6.0 million, a 4.7% increase from the prior-year period.
Provision for credit losses for the six months ended June 30, 2015 was $21.8 million versus $30.6 million in the prior-year period. Net charge-offs of $26.2 million in the six months ended June 30, 2015 exceeded the provision by $4.4 million as the Company released a portion of the allowance recorded in 2014 for convenience checks. Annualized net charge-offs as a percentage of average finance receivables for the six months ended June 30, 2015 was 9.6%, a decline from 10.1% in the prior-year period.
General and administrative expenses for the six months ended June 30, 2015 were $60.9 million, an increase of $17.8 million, or 41.2%, from $43.1 million in the prior-year period. Included in six months 2015 results were a total of $2.7 million in non-operating expenses, while six months 2014 results included a non-operating benefit of $1.4 million related to a change in the Company's vacation pay policy. The balance of the expense increase of $13.7 million was driven primarily by $6.5 million of additional branch expenses, $5.5 million of additional home office expenses and $1.7 million of additional marketing costs. Branch expenses include changes in staffing and incentive plans for all branches as well as the expenses associated with 52 branches added since December 31, 2013. The increase in home office expenses includes additional personnel, incentive plan changes, the write-off of GoldPoint software costs and legal and consulting fees.
GAAP net income for the six months ended June 30, 2015 was $9.5 million, a 5.3% decrease compared to GAAP net income of $10.0 million in the prior-year period, and diluted earnings per share for the six months ended June 30, 2015 were $0.73 compared to $0.77 in the prior-year period. Excluding the aforementioned non-operating expenses, non-GAAP net income for the six months ended June 30, 2015 totaled $11.2 million and non-GAAP diluted earnings per share were $0.86. For a reconciliation of non-GAAP financial measures to the nearest comparable GAAP financial measure, please refer to the reconciliation table accompanying this release.
Peter Knitzer Appointed to Board of Directors
The Company announced today that Peter Knitzer has been appointed to the Board of Directors, effective immediately. The appointment increases the Company's Board size from six directors to seven. Mr. Knitzer will serve on the Company's Compensation Committee and Corporate Governance and Nominating Committee, and brings to the Board an extensive analytical and financial background with respect to optimizing and integrating digital and traditional consumer marketing, sales and service capabilities, as well as significant experience with public and private financial services companies.
Mr. Knitzer has been an advisor to financial services companies since 2013. Previously, Mr. Knitzer served as Executive Vice President and head of the Payments group at CIBC and President and Director at E*TRADE Bank. Prior to joining E*TRADE, Mr. Knitzer spent 14 years at Citigroup in various senior roles, including Chairman & Chief Executive Officer of Citibank North America — a top 10 retail and commercial bank with 1,000+ branches and 22,000+ employees — Business Head, Cross-Sell Customer Management for all Citigroup businesses and EVP/Managing Director of Citi Cards, Citigroup's leading global credit card business. Mr. Knitzer has also previously held senior marketing positions at Chase Manhattan Bank, American Express and Nabisco Brands. He received his MBA in marketing and finance from Columbia University Graduate School of Business and his BA in political science from Brown University.
Mr. Knitzer has also served as a Director for Habitat for Humanity from 2008–2014, including Board Chair from 2011–2013. He is currently on the Advisory Board of Columbia University Business School's Lang Center for Entrepreneurship.
2015 De Novo Outlook
As of June 30, 2015, Regional Management's branch network consisted of 316 locations. Regional Management opened 10 de novo branches in the second quarter of 2015 and, for the full year 2015, plans to open a minimum of 25 to 30 de novo branches.
Liquidity and Capital Resources
As of June 30, 2015, Regional Management had finance receivables of $572.5 million and outstanding debt of $359.5 million on its $500.0 million senior revolving credit facility.
Conference Call Information
Regional Management Corp. will host a conference call and webcast today at 4:30 PM ET to discuss these results.
The dial-in number for the conference call is (877) 415-3185 (toll-free) or (857) 244-7328 (direct), passcode 80833819. Please dial the number 10 minutes prior to the scheduled start time. 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 Thursday, July 30, 2015, by telephone at (888) 286-8010 (toll-free) or (617) 801-6888 (direct), passcode 29160961. A webcast replay of the call will be available at http://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: the continuation or worsening of adverse conditions in the global and domestic credit markets and uncertainties regarding, or the impact of, governmental responses to those conditions; changes in interest rates; risks related to acquisitions; 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; recently-enacted or proposed legislation; 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 charge-offs); changes in Regional Management's markets and general changes in the economy (particularly in the markets served by Regional Management); 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 and is not responsible for updating the information contained in this press release beyond the publication date, or for changes made to this document by wire services or Internet services.
About Regional Management Corp.
Regional Management Corp. RM is a diversified specialty 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 and Georgia. 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 http://www.RegionalManagement.com.
| Regional Management Corp. and Subsidiaries | ||||||||||||||||||||||||||||||
| Consolidated Statements of Income | ||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||
| (in thousands, except per share amounts) | ||||||||||||||||||||||||||||||
| Better (Worse) | Better (Worse) | |||||||||||||||||||||||||||||
| 2Q'15 | 2Q'14 | $ | % | YTD'15 | YTD'14 | $ | % | |||||||||||||||||||||||
| Revenue | ||||||||||||||||||||||||||||||
| Interest and fee income | $ | 47,668 | $ | 42,962 | $ | 4,706 | 11.0 | % | $ | 94,733 | $ | 87,041 | $ | 7,692 | 8.8 | % | ||||||||||||||
| Insurance income, net | 3,120 | 2,481 | 639 | 25.8 | % | 6,049 | 5,776 | 273 | 4.7 | % | ||||||||||||||||||||
| Other income | 2,213 | 1,994 | 219 | 11.0 | % | 4,743 | 4,201 | 542 | 12.9 | % | ||||||||||||||||||||
| Total revenue | 53,001 | 47,437 | 5,564 | 11.7 | % | 105,525 | 97,018 | 8,507 | 8.8 | % | ||||||||||||||||||||
| Expenses | ||||||||||||||||||||||||||||||
| Provision for credit losses | 12,102 | 13,620 | 1,518 | 11.1 | % | 21,814 | 30,564 | 8,750 | 28.6 | % | ||||||||||||||||||||
| Personnel | 16,211 | 13,068 | (3,143 | ) | -24.1 | % | 35,971 | 24,242 | (11,729 | ) | -48.4 | % | ||||||||||||||||||
| Occupancy | 4,256 | 3,713 | (543 | ) | -14.6 | % | 8,381 | 7,133 | (1,248 | ) | -17.5 | % | ||||||||||||||||||
| Marketing | 2,009 | 1,750 | (259 | ) | -14.8 | % | 4,480 | 2,732 | (1,748 | ) | -64.0 | % | ||||||||||||||||||
| Other | 5,767 | 4,667 | (1,100 | ) | -23.6 | % | 12,034 | 8,990 | (3,044 | ) | -33.9 | % | ||||||||||||||||||
| Total general and administrative expenses | 28,243 | 23,198 | (5,045 | ) | -21.7 | % | 60,866 | 43,097 | (17,769 | ) | -41.2 | % | ||||||||||||||||||
| Interest expense | 3,932 | 3,556 | (376 | ) | -10.6 | % | 7,536 | 7,319 | (217 | ) | -3.0 | % | ||||||||||||||||||
| Income before income taxes | 8,724 | 7,063 | 1,661 | 23.5 | % | 15,309 | 16,038 | (729 | ) | -4.5 | % | |||||||||||||||||||
| Income taxes | 3,316 | 2,649 | (667 | ) | -25.2 | % | 5,818 | 6,014 | 196 | 3.3 | % | |||||||||||||||||||
| Net income | $ | 5,408 | $ | 4,414 | $ | 994 | 22.5 | % | $ | 9,491 | $ | 10,024 | $ | (533 | ) | -5.3 | % | |||||||||||||
| Net income per common share: | ||||||||||||||||||||||||||||||
| Basic | $ | 0.42 | $ | 0.35 | $ | 0.07 | 20.0 | % | $ | 0.74 | $ | 0.79 | $ | (0.05 | ) | -6.3 | % | |||||||||||||
| Diluted | $ | 0.41 | $ | 0.34 | $ | 0.07 | 20.6 | % | $ | 0.73 | $ | 0.77 | $ | (0.04 | ) | -5.2 | % | |||||||||||||
| Weighted-average shares outstanding: | ||||||||||||||||||||||||||||||
| Basic | 12,845 | 12,691 | (154 | ) | -1.2 | % | 12,812 | 12,673 | (139 | ) | -1.1 | % | ||||||||||||||||||
| Diluted | 13,078 | 12,916 | (162 | ) | -1.3 | % | 13,040 | 12,958 | (82 | ) | -0.6 | % | ||||||||||||||||||
| Return on average assets (annualized) | 4.0 | % | 3.6 | % | 3.6 | % | 4.0 | % | ||||||||||||||||||||||
| Return on average equity (annualized) | 11.5 | % | 10.4 | % | 10.3 | % | 12.0 | % | ||||||||||||||||||||||
| Regional Management Corp. and Subsidiaries | |||||||||||||||
| Consolidated Balance Sheets | |||||||||||||||
| (Unaudited) | |||||||||||||||
| (in thousands, except par value amounts) | |||||||||||||||
| Increase (Decrease) | |||||||||||||||
| 2Q'15 | 2Q'14 | $ | % | ||||||||||||
| Assets | |||||||||||||||
| Cash | $ | 4,793 | $ | 3,562 | $ | 1,231 | 34.6 | % | |||||||
| Gross finance receivables | 704,862 | 622,854 | 82,008 | 13.2 | % | ||||||||||
| Less unearned finance charges, insurance premiums, and commissions | (132,337 | ) | (104,879 | ) | (27,458 | ) | -26.2 | % | |||||||
| Finance receivables | 572,525 | 517,975 | 54,550 | 10.5 | % | ||||||||||
| Allowance for credit losses | (36,171 | ) | (34,584 | ) | (1,587 | ) | -4.6 | % | |||||||
| Net finance receivables | 536,354 | 483,391 | 52,963 | 11.0 | % | ||||||||||
| Property and equipment, net of accumulated depreciation | 8,646 | 7,929 | 717 | 9.0 | % | ||||||||||
| Deferred tax asset, net | 2,305 | — | 2,305 | 100.0 | % | ||||||||||
| Repossessed assets at net realizable value | 407 | 615 | (208 | ) | -33.8 | % | |||||||||
| Goodwill | 716 | 716 | — | 0.0 | % | ||||||||||
| Intangible assets, net | 655 | 1,068 | (413 | ) | -38.7 | % | |||||||||
| Other assets | 7,105 | 6,714 | 391 | 5.8 | % | ||||||||||
| Total assets | $ | 560,981 | $ | 503,995 | $ | 56,986 | 11.3 | % | |||||||
| Liabilities and Stockholders' Equity | |||||||||||||||
| Liabilities: | |||||||||||||||
| Senior revolving credit facility | $ | 359,491 | $ | 324,570 | $ | 34,921 | 10.8 | % | |||||||
| Accounts payable and accrued expenses | 10,733 | 6,718 | 4,015 | 59.8 | % | ||||||||||
| Deferred tax liability, net | — | 847 | (847 | ) | -100.0 | % | |||||||||
| Total liabilities | 370,224 | 332,135 | 38,089 | 11.5 | % | ||||||||||
| 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, 12,889 and 12,702 shares issued and outstanding at June 30, 2015 and 2014, respectively |
1,289 | 1,270 | 19 | 1.5 | % | ||||||||||
| Additional paid-in-capital | 88,584 | 83,975 | 4,609 | 5.5 | % | ||||||||||
| Retained earnings | 100,884 | 86,615 | 14,269 | 16.5 | % | ||||||||||
| Total stockholders' equity | 190,757 | 171,860 | 18,897 | 11.0 | % | ||||||||||
| Total liabilities and stockholders' equity | $ | 560,981 | $ | 503,995 | $ | 56,986 | 11.3 | % | |||||||
| Regional Management Corp. and Subsidiaries | ||||||||||||||||||
| Selected Financial Data | ||||||||||||||||||
| (Unaudited) | ||||||||||||||||||
| (in thousands, except per share amounts) | ||||||||||||||||||
| Averages and Yields | ||||||||||||||||||
| 2Q'15 | 1Q'15 | 2Q'14 | ||||||||||||||||
|
Average Finance Receivables |
Average Yield
(Annualized) |
Average Finance Receivables |
Average Yield
(Annualized) |
Average Finance Receivables |
Average Yield
(Annualized) |
|||||||||||||
| Branch small loans | $ | 130,806 | 45.3 | % | $ | 124,350 | 46.2 | % | $ | 103,595 | 48.5 | % | ||||||
| Convenience checks | 171,323 | 45.0 | % | 181,425 | 45.9 | % | 158,564 | 44.4 | % | |||||||||
| Large loans | 79,756 | 27.7 | % | 52,738 | 26.7 | % | 42,380 | 27.3 | % | |||||||||
| Automobile loans | 143,659 | 19.3 | % | 150,107 | 19.2 | % | 173,676 | 19.8 | % | |||||||||
| Retail loans | 24,556 | 18.8 | % | 25,121 | 18.2 | % | 28,810 | 18.4 | % | |||||||||
| Total interest and fee yield | $ | 550,100 | 34.7 | % | $ | 533,741 | 35.3 | % | $ | 507,025 | 33.9 | % | ||||||
| Total revenue yield | $ | 550,100 | 38.5 | % | $ | 533,741 | 39.4 | % | $ | 507,025 | 37.4 | % | ||||||
|
Components of Increase in Interest and Fee Income |
||||||||||||
| 2Q'15 Compared to 2Q'14 | ||||||||||||
| Increase (Decrease) | ||||||||||||
| Volume | Rate | Net | ||||||||||
| Branch small loans | $ | 3,124 | $ | (884 | ) | $ | 2,240 | |||||
| Convenience checks | 1,432 | 230 | 1,662 | |||||||||
| Large loans | 2,585 | 43 | 2,628 | |||||||||
| Automobile loans | (1,516 | ) | (139 | ) | (1,655 | ) | ||||||
| Retail loans | (191 | ) | 22 | (169 | ) | |||||||
| Change in product mix | (1,718 | ) | 1,718 | — | ||||||||
| Total increase in interest and fee income | $ | 3,716 | $ | 990 | $ | 4,706 | ||||||
| Percentage of change in interest and fee income | 79.0 | % | 21.0 | % | 100.0 | % | ||||||
| Net Loans Originated (1) | |||||||||||||||||||||||
| 2Q'15 | 1Q'15 | 2Q'14 |
QoQ $
Inc (Dec) |
QoQ %
Inc (Dec) |
YoY $
Inc (Dec) |
YoY %
Inc (Dec) |
|||||||||||||||||
| Branch small loans | $ | 80,818 | $ | 51,371 | $ | 62,751 | $ | 29,447 | 57.3 | % | $ | 18,067 | 28.8 | % | |||||||||
| Convenience checks | 90,745 | 60,653 | 84,576 | 30,092 | 49.6 | % | 6,169 | 7.3 | % | ||||||||||||||
| Large loans | 46,134 | 29,829 | 13,020 | 16,305 | 54.7 | % | 33,114 | 254.3 | % | ||||||||||||||
| Automobile loans | 11,802 | 14,590 | 18,786 | (2,788 | ) | -19.1 | % | (6,984 | ) | -37.2 | % | ||||||||||||
| Retail loans | 8,136 | 6,727 | 7,345 | 1,409 | 20.9 | % | 791 | 10.8 | % | ||||||||||||||
| Total net loans originated | $ | 237,635 | $ | 163,170 | $ | 186,478 | $ | 74,465 | 45.6 | % | $ | 51,157 | 27.4 | % | |||||||||
|
(1) Represents the balance of loan origination and refinancing net of unearned finance charges |
|||||||||||||||||||||||
| Other Key Metrics | ||||||||||||
| 2Q'15 | 1Q'15 | 2Q'14 | ||||||||||
| Net charge-offs | $ | 12,881 | $ | 13,273 | $ | 13,361 | ||||||
| Percentage of average finance receivables (annualized) | 9.4 | % | 9.9 | % | 10.5 | % | ||||||
| Provision for credit losses | $ | 12,102 | $ | 9,712 | $ | 13,620 | ||||||
| Percentage of average finance receivables (annualized) | 8.8 | % | 7.3 | % | 10.7 | % | ||||||
| Percentage of total revenue | 22.8 | % | 18.5 | % | 28.7 | % | ||||||
| General and administrative expenses | $ | 28,243 | $ | 32,623 | $ | 23,198 | ||||||
| Percentage of average finance receivables (annualized) | 20.5 | % | 24.4 | % | 18.3 | % | ||||||
| Percentage of total revenue | 53.3 | % | 62.1 | % | 48.9 | % | ||||||
| Same store results: | ||||||||||||
| Finance receivables at period-end | $ | 545,928 | $ | 501,393 | $ | 484,048 | ||||||
| Finance receivable growth rate | 8.0 | % | 1.1 | % | 6.6 | % | ||||||
| Number of branches in calculation | 281 | 264 | 232 | |||||||||
| Finance Receivables by Product | |||||||||||||||||||||||
| 2Q'15 | 1Q'15 |
QoQ $
Inc (Dec) |
QoQ %
Inc (Dec) |
2Q'14 |
YoY $
Inc (Dec) |
YoY %
Inc (Dec) |
|||||||||||||||||
| Branch small loans | $ | 140,161 | $ | 121,649 | $ | 18,512 | 15.2 | % | $ | 107,598 | $ | 32,563 | 30.3 | % | |||||||||
| Convenience checks | 174,786 | 170,013 | 4,773 | 2.8 | % | 167,858 | 6,928 | 4.1 | % | ||||||||||||||
| Large loans | 93,203 | 63,338 | 29,865 | 47.2 | % | 42,996 | 50,207 | 116.8 | % | ||||||||||||||
| Automobile loans | 139,593 | 146,724 | (7,131 | ) | -4.9 | % | 171,777 | (32,184 | ) | -18.7 | % | ||||||||||||
| Retail loans | 24,782 | 24,183 | 599 | 2.5 | % | 27,746 | (2,964 | ) | -10.7 | % | |||||||||||||
| Total finance receivables | $ | 572,525 | $ | 525,907 | $ | 46,618 | 8.9 | % | $ | 517,975 | $ | 54,550 | 10.5 | % | |||||||||
| 2Q'14 | 1Q'14 |
QoQ $
Inc (Dec) |
QoQ %
Inc (Dec) |
||||||||||||||||||||
| Total finance receivables | $ | 517,975 | $ | 501,734 | $ | 16,241 | 3.2 | % | |||||||||||||||
| Contractual Delinquency by Aging | ||||||||||||||||||
| 2Q'15 | 1Q'15 | 2Q'14 | ||||||||||||||||
| Amount |
Percentage of Total Finance Receivables |
Amount |
Percentage of Total Finance Receivables |
Amount |
Percentage of Total Finance Receivables |
|||||||||||||
| Allowance for credit losses | $ | 36,171 | 6.3 | % | $ | 36,950 | 7.0 | % | $ | 34,584 | 6.7 | % | ||||||
| Current | 454,424 | 79.4 | % | 425,088 | 80.8 | % | 395,791 | 76.4 | % | |||||||||
| 1 to 29 days past due | 81,275 | 14.2 | % | 67,653 | 12.9 | % | 87,799 | 17.0 | % | |||||||||
| Delinquent accounts: | ||||||||||||||||||
| 30 to 59 days | 14,665 | 2.5 | % | 11,596 | 2.2 | % | 14,984 | 2.9 | % | |||||||||
| 60 to 89 days | 8,113 | 1.4 | % | 6,824 | 1.3 | % | 6,772 | 1.3 | % | |||||||||
| 90 to 119 days | 5,633 | 1.0 | % | 4,844 | 0.9 | % | 4,435 | 0.9 | % | |||||||||
| 120 to 149 days | 4,597 | 0.8 | % | 4,881 | 0.9 | % | 3,206 | 0.6 | % | |||||||||
| 150 to 179 days | 3,818 | 0.7 | % | 5,021 | 1.0 | % | 2,155 | 0.4 | % | |||||||||
| 180 days and over | — | 0.0 | % | — | 0.0 | % | 2,833 | 0.5 | % | |||||||||
| Total contractual delinquency | $ | 36,826 | 6.4 | % | $ | 33,166 | 6.3 | % | $ | 34,385 | 6.6 | % | ||||||
| Total finance receivables | $ | 572,525 | 100.0 | % | $ | 525,907 | 100.0 | % | $ | 517,975 | 100.0 | % | ||||||
| 1 day and over past due | $ | 118,101 | 20.6 | % | $ | 100,819 | 19.2 | % | $ | 122,184 | 23.6 | % | ||||||
| Contractual Delinquency by Product | ||||||||||||||||||||||
| 2Q'15 | 1Q'15 | 2Q'14 | ||||||||||||||||||||
| Amount |
Percentage of Product Finance Receivables |
Amount |
Percentage of Product Finance Receivables |
Amount |
Percentage of Product Finance Receivables |
|||||||||||||||||
| Branch small loans | $ | 10,804 | 7.7 | % | $ 8,890 | 7.3 | % | $ 8,525 | 7.9 | % | ||||||||||||
| Convenience checks | 13,561 | 7.8 | % | 14,681 | 8.6 | % | 11,197 | 6.7 | % | |||||||||||||
| Large loans | 2,748 | 2.9 | % | 1,704 | 2.7 | % | 2,437 | 5.7 | % | |||||||||||||
| Automobile loans | 8,619 | 6.2 | % | 6,854 | 4.7 | % | 10,981 | 6.4 | % | |||||||||||||
| Retail loans | 1,094 | 4.4 | % | 1,037 | 4.3 | % | 1,245 | 4.5 | % | |||||||||||||
| Total contractual delinquency | 36,826 | 6.4 | % | 33,166 | 6.3 | % | 34,385 | 6.6 | % | |||||||||||||
| Quarterly Trend | |||||||||||||||||||||||
| 2Q'14 | 3Q'14 | 4Q'14 | 1Q'15 | 2Q'15 |
QoQ $
B(W) |
YoY $
B(W) |
|||||||||||||||||
| Revenue | |||||||||||||||||||||||
| Interest and fee income | $ | 42,962 | $ | 48,792 | $ | 48,964 | $ | 47,065 | $ | 47,668 | $ | 603 | $ | 4,706 | |||||||||
| Insurance income, net | 2,481 | 2,636 | 2,261 | 2,929 | 3,120 | 191 | 639 | ||||||||||||||||
| Other income | 1,994 | 2,481 | 2,567 | 2,530 | 2,213 | (317 | ) | 219 | |||||||||||||||
| Total revenue | 47,437 | 53,909 | 53,792 | 52,524 | 53,001 | 477 | 5,564 | ||||||||||||||||
| Expenses | |||||||||||||||||||||||
| Provision for credit losses | 13,620 | 22,542 | 15,950 | 9,712 | 12,102 | (2,390 | ) | 1,518 | |||||||||||||||
| Personnel | 13,068 | 14,042 | 17,099 | 19,760 | 16,211 | 3,549 | (3,143 | ) | |||||||||||||||
| Occupancy | 3,713 | 4,179 | 4,115 | 4,125 | 4,256 | (131 | ) | (543 | ) | ||||||||||||||
| Marketing | 1,750 | 1,756 | 1,842 | 2,471 | 2,009 | 462 | (259 | ) | |||||||||||||||
| Other | 4,667 | 5,307 | 5,340 | 6,267 | 5,767 | 500 | (1,100 | ) | |||||||||||||||
| Total general and administrative | 23,198 | 25,284 | 28,396 | 32,623 | 28,243 | 4,380 | (5,045 | ) | |||||||||||||||
| Interest expense | 3,556 | 3,848 | 3,780 | 3,604 | 3,932 | (328 | ) | (376 | ) | ||||||||||||||
| Income before income taxes | 7,063 | 2,235 | 5,666 | 6,585 | 8,724 | 2,139 | 1,661 | ||||||||||||||||
| Income taxes | 2,649 | 838 | 2,285 | 2,502 | 3,316 | (814 | ) | (667 | ) | ||||||||||||||
| Net income | $ | 4,414 | $ | 1,397 | $ | 3,381 | $ | 4,083 | $ | 5,408 | $ | 1,325 | $ | 994 | |||||||||
| Net income per common share: | |||||||||||||||||||||||
| Basic | $ | 0.35 | $ | 0.11 | $ | 0.27 | $ | 0.32 | $ | 0.42 | $ | 0.10 | $ | 0.07 | |||||||||
| Diluted | $ | 0.34 | $ | 0.11 | $ | 0.26 | $ | 0.31 | $ | 0.41 | $ | 0.10 | $ | 0.07 | |||||||||
| Weighted-average shares outstanding: | |||||||||||||||||||||||
| Basic | 12,691 | 12,714 | 12,744 | 12,838 | 12,845 | (7 | ) | (154 | ) | ||||||||||||||
| Diluted | 12,916 | 12,934 | 12,955 | 13,061 | 13,078 | (17 | ) | (162 | ) | ||||||||||||||
| 2Q'14 | 3Q'14 | 4Q'14 | 1Q'15 | 2Q'15 |
QoQ $
Inc (Dec) |
YoY $
Inc (Dec) |
|||||||||||||||||
| Total assets | 503,995 | 522,820 | 530,270 | 507,742 | 560,981 | 53,239 | 56,986 | ||||||||||||||||
| Finance receivables | 517,975 | 543,353 | 546,192 | 525,907 | 572,525 | 46,618 | 54,550 | ||||||||||||||||
| Allowance for credit losses | 34,584 | 43,301 | 40,511 | 36,950 | 36,171 | 779 | (1,587 | ) | |||||||||||||||
| Senior revolving credit facility | 324,570 | 339,323 | 341,419 | 312,538 | 359,491 | 46,953 | 34,921 | ||||||||||||||||
| Headcount Trend | |||||||||||||||
| 2Q'14 | 3Q'14 | 4Q'14 | 1Q'15 | 2Q'15 |
QoQ
Inc (Dec) |
YoY
Inc (Dec) |
|||||||||
| Branch headcount | 1,176 | 1,313 | 1,335 | 1,273 | 1,205 | (68 | ) | 29 | |||||||
| 2015 new branches | 15 | 40 | 25 | 40 | |||||||||||
| Total branch headcount | 1,176 | 1,313 | 1,335 | 1,288 | 1,245 | (43 | ) | 69 | |||||||
| Home office headcount | 88 | 92 | 105 | 125 | 120 | (5 | ) | 32 | |||||||
| Total headcount | 1,264 | 1,405 | 1,440 | 1,413 | 1,365 | (48 | ) | 101 | |||||||
| Number of branches | 293 | 296 | 300 | 306 | 316 | 10 | 23 | ||||||||
| General & Administrative Expenses Trend | |||||||||||||||||||||||
| 2Q'14 | 3Q'14 | 4Q'14 | 1Q'15 | 2Q'15 |
QoQ $
B(W) |
YoY $
B(W) |
|||||||||||||||||
| Branch G&A expenses | $ | 15,525 | $ | 16,866 | $ | 18,020 | $ | 19,284 | $ | 16,596 | $ | 2,688 | $ | (1,071 | ) | ||||||||
| 2015 new branches | 86 | 498 | (412 | ) | (498 | ) | |||||||||||||||||
| Total branch G&A expenses | 15,525 | 16,866 | 18,020 | 19,370 | 17,094 | 2,276 | (1,569 | ) | |||||||||||||||
| Marketing | 1,750 | 1,756 | 1,842 | 2,471 | 2,009 | 462 | (259 | ) | |||||||||||||||
| Home office G&A expenses | 5,923 | 6,662 | 8,534 | 10,782 | 9,140 | 1,642 | (3,217 | ) | |||||||||||||||
| Total G&A expenses | $ | 23,198 | $ | 25,284 | $ | 28,396 | $ | 32,623 | $ | 28,243 | $ | 4,380 | $ | (5,045 | ) | ||||||||
| Averages and Yields | ||||||||||||
| YTD'15 | YTD'14 | |||||||||||
|
Average Finance Receivables |
Average Yield
(Annualized) |
Average Finance Receivables |
Average Yield
(Annualized) |
|||||||||
| Branch small loans | $ | 128,425 | 45.4 | % | $ | 105,096 | 48.0 | % | ||||
| Convenience checks | 177,283 | 45.2 | % | 165,293 | 43.6 | % | ||||||
| Large loans | 66,663 | 27.1 | % | 42,583 | 26.9 | % | ||||||
| Automobile loans | 146,905 | 19.3 | % | 175,915 | 19.7 | % | ||||||
| Retail loans | 24,932 | 18.5 | % | 29,635 | 18.1 | % | ||||||
| Total interest and fee yield | $ | 544,208 | 34.8 | % | $ | 518,522 | 33.6 | % | ||||
| Total revenue yield | $ | 544,208 | 38.8 | % | $ | 518,522 | 37.4 | % | ||||
|
|
||||||||||||
|
Components of Increase in Interest and Fee Income |
||||||||||||
| YTD'15 Compared to YTD'14 | ||||||||||||
| Increase (Decrease) | ||||||||||||
| Volume | Rate | Net | ||||||||||
| Branch small loans | $ | 5,359 | $ | (1,417 | ) | $ | 3,942 | |||||
| Convenience checks | 2,678 | 1,351 | 4,029 | |||||||||
| Large loans | 3,266 | 46 | 3,312 | |||||||||
| Automobile loans | (2,920 | ) | (285 | ) | (3,205 | ) | ||||||
| Retail loans | (419 | ) | 33 | (386 | ) | |||||||
| Change in product mix | (3,561 | ) | 3,561 | — | ||||||||
| Total increase in interest and fee income | $ | 4,403 | $ | 3,289 | $ | 7,692 | ||||||
| Percentage of change in interest and fee income | 57.2 | % | 42.8 | % | 100.0 | % | ||||||
| Net Loans Originated (1) | |||||||||||||
| YTD'15 | YTD'14 |
YTD $
Inc (Dec) |
YTD %
Inc (Dec) |
||||||||||
| Branch small loans | $ | 132,189 | $ | 105,597 | $ | 26,592 | 25.2 | % | |||||
| Convenience checks | 151,398 | 137,233 | 14,165 | 10.3 | % | ||||||||
| Large loans | 75,963 | 23,378 | 52,585 | 224.9 | % | ||||||||
| Automobile loans | 26,392 | 37,684 | (11,292 | ) | -30.0 | % | |||||||
| Retail loans | 14,863 | 15,862 | (999 | ) | -6.3 | % | |||||||
| Total net loans originated | $ | 400,805 | $ | 319,754 | $ | 81,051 | 25.3 | % | |||||
|
(1) Represents the balance of loan origination and refinancing net of unearned finance charges |
|||||||||||||
| Other Key Metrics | ||||||||
| YTD'15 | YTD'14 | |||||||
| Net charge-offs | $ | 26,154 | $ | 26,069 | ||||
| Percentage of average finance receivables (annualized) | 9.6 | % | 10.1 | % | ||||
| Provision for credit losses | $ | 21,814 | $ | 30,564 | ||||
| Percentage of average finance receivables (annualized) | 8.0 | % | 11.8 | % | ||||
| Percentage of total revenue | 20.7 | % | 31.5 | % | ||||
| General and administrative expenses | $ | 60,866 | $ | 43,097 | ||||
| Percentage of average finance receivables (annualized) | 22.4 | % | 16.6 | % | ||||
| Percentage of total revenue | 57.7 | % | 44.4 | % | ||||
Because it adjusts for certain non-operating and non-cash items, the Company believes that non-GAAP measures are useful to investors as supplemental financial measures that, when viewed with its GAAP financial information, provide information regarding trends in the Company's results of operations and credit metrics, which is intended to help investors meaningfully evaluate and compare the Company's results of operations and credit metrics between periods.
| Non-GAAP Reconciliation | ||||||||||
| YTD'15 | Adjustments | Non-GAAP | ||||||||
| General and administrative expenses | $ | 60,866 | $ | (2,676 | )(1)(2)(3) | $ | 58,190 | |||
| Income taxes | $ | 5,818 | $ |
1,017 |
(5) |
$ | 6,835 | |||
| Net income | $ | 9,491 | $ | 1,659 | $ | 11,150 | ||||
| Diluted net income per common share | $ | 0.73 | $ | 0.13 | $ | 0.86 | ||||
| Non-GAAP Reconciliation | ||||||||||
| YTD'14 | Adjustments | Non-GAAP | ||||||||
| General and administrative expenses | $ | 43,097 | $ |
566 |
(2)(4) |
$ | 43,663 | |||
| Income taxes | $ | 6,014 | $ | (212 | )(5) | $ | 5,802 | |||
| Net income | $ | 10,024 | $ | (354 | ) | $ | 9,670 | |||
| Diluted net income per common share | $ | 0.77 | $ | (0.02 | ) | $ | 0.75 | |||
| (1) | Exclude executive retirement agreement costs of $533 | |
| (2) | Exclude loan system conversion costs of $613 and $822 for YTD'15 and YTD'14 | |
| (3) | Exclude CEO equity award costs of $1,530 | |
| (4) | Benefit related to vacation policy change of $1,388 | |
| (5) | Tax effect of the adjustments | |
View source version on businesswire.com: http://www.businesswire.com/news/home/20150723006465/en/
Investor Relations
Garrett Edson, 203-682-8331
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