Regional Management Corp. [RM] Filings

10-Q 1 rm-10q_20220630.htm 10-Q rm-10q_20220630.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period ended

Commission File Number: 001-35477

Regional Management Corp.

(Exact name of registrant as specified in its charter)


Delaware	57-0847115
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

979 Batesville Road, Suite B Greer, South Carolina	29651
(Address of principal executive offices)	(Zip Code)

(864) 448-7000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol

Name of Each Exchange on Which Registered

Common Stock, $0.10 par value

New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☒

Non-accelerated filer	☐	Smaller reporting company	☐

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 3, 2022, the registrant had outstanding 9,582,094 shares of Common Stock, $0.10 par value.

		Page No.
PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements

	Consolidated Balance Sheets Dated June 30, 2022 and December 31, 2021	3

	Consolidated Statements of Income for the Three and Six Months Ended June 30, 2022 and 2021	4

	Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2022 and 2021	5

	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2022 and 2021	7

	Notes to Consolidated Financial Statements	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	47

Item 4.	Controls and Procedures	48

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	49

Item 1A.	Risk Factors	49

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	49

Item 6.	Exhibits	50

SIGNATURE		51

ITEM 1.

FINANCIAL STATEMENTS.

Regional Management Corp. and Subsidiaries

Consolidated Balance Sheets

(in thousands, except par value amounts)

	June 30, 2022
	(Unaudited)			December 31, 2021
Assets
Cash	$	7,928		$	10,507
Net finance receivables		1,525,659			1,426,257
Unearned insurance premiums		(48,986	)		(47,837	)
Allowance for credit losses		(167,500	)		(159,300	)
Net finance receivables, less unearned insurance premiums and allowance for credit losses		1,309,173			1,219,120
Restricted cash		144,802			138,682
Lease assets		28,555			28,721
Deferred tax assets, net		19,798			18,420
Property and equipment		12,808			12,938
Intangible assets		10,312			9,517
Other assets		14,568			21,757
Total assets	$	1,547,944		$	1,459,662
Liabilities and Stockholders’ Equity
Liabilities:
Debt	$	1,194,570		$	1,107,953
Unamortized debt issuance costs		(10,819	)		(11,010	)
Net debt		1,183,751			1,096,943
Accounts payable and accrued expenses		34,492			49,283
Lease liabilities		31,117			30,700
Total liabilities		1,249,360			1,176,926
Commitments and contingencies (Note 11)
Stockholders’ equity:
Preferred stock ($0.10 par value, 100,000 shares authorized, none issued or outstanding)		—			—
Common stock ($0.10 par value, 1,000,000 shares authorized, 14,390 shares issued and 9,584 shares outstanding at June 30, 2022 and 14,157 shares issued and 9,788 shares outstanding at December 31, 2021)		1,439			1,416
Additional paid-in capital		108,345			104,745
Retained earnings		338,943			306,105
Treasury stock (4,807 shares at June 30, 2022 and 4,370 shares at December 31, 2021)		(150,143	)		(129,530	)
Total stockholders’ equity		298,584			282,736
Total liabilities and stockholders’ equity	$	1,547,944		$	1,459,662

The following table presents the assets and liabilities of our consolidated variable interest entities:

Assets
Cash	$	362		$	364
Net finance receivables		1,118,925			1,004,954
Allowance for credit losses		(120,462	)		(109,898	)
Restricted cash		123,714			118,818
Other assets		86			4
Total assets	$	1,122,625		$	1,014,242
Liabilities
Net debt	$	1,106,594		$	986,223
Accounts payable and accrued expenses		103			71
Total liabilities	$	1,106,697		$	986,294

See accompanying notes to consolidated financial statements.

Regional Management Corp. and Subsidiaries

Consolidated Statements of Income

(Unaudited)

(in thousands, except per share amounts)

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Revenue
Interest and fee income	$	109,771	$	88,793	$	217,402	$	176,072
Insurance income, net		10,220		8,656		20,764		16,641
Other income		2,880		2,227		5,553		4,694
Total revenue		122,871		99,676		243,719		197,407

Expenses
Provision for credit losses		45,400		20,549		76,258		31,911

Personnel		33,941		28,370		69,595		57,221
Occupancy		6,156		5,568		11,964		11,588
Marketing		4,108		4,776		7,199		7,486
Other		9,916		7,675		20,463		15,937
Total general and administrative expenses		54,121		46,389		109,221		92,232

Interest expense		7,564		7,801		7,505		14,936
Income before income taxes		15,786		24,937		50,735		58,328
Income taxes		3,804		4,771		11,970		12,640

Net income	$	11,982	$	20,166	$	38,765	$	45,688
Net income per common share:
Basic	$	1.29	$	1.98	$	4.13	$	4.41
Diluted	$	1.24	$	1.87	$	3.94	$	4.18
Weighted-average common shares outstanding:
Basic		9,261		10,200		9,396		10,371
Diluted		9,669		10,797		9,845		10,931

See accompanying notes to consolidated financial statements.

Regional Management Corp. and Subsidiaries

Consolidated Statements of Stockholders’ Equity

(Unaudited)

(in thousands)

	Three Months Ended June 30, 2022
	Common Stock						Additional Paid-In			Retained			Treasury
	Shares			Amount			Capital			Earnings			Stock			Total
Balance, March 31, 2022		14,360		$	1,436		$	105,989		$	329,878		$	(138,561	)	$	298,742
Cash dividends		—			—			—			(2,917	)		—			(2,917	)
Issuance of restricted stock awards		40			4			(4	)		—			—			—
Exercise of stock options		—			—			—			—			—			—
Repurchase of common stock		—			—			—			—			(11,582	)		(11,582	)
Shares withheld related to net share settlement		(10	)		(1	)		(387	)		—			—			(388	)
Share-based compensation		—			—			2,747			—			—			2,747
Net income		—			—			—			11,982			—			11,982
Balance, June 30, 2022		14,390		$	1,439		$	108,345		$	338,943		$	(150,143	)	$	298,584

	Three Months Ended June 30, 2021
	Common Stock						Additional Paid-In			Retained			Treasury
	Shares			Amount			Capital			Earnings			Stock			Total
Balance, March 31, 2021		14,063		$	1,406		$	105,493		$	250,659		$	(73,922	)	$	283,636
Cash dividends		—			—			—			(2,653	)		—			(2,653	)
Issuance of restricted stock awards		18			1			(1	)		—			—			—
Exercise of stock options		213			21			—			—			—			21
Repurchase of common stock		—			—			—			—			(22,190	)		(22,190	)
Shares withheld related to net share settlement		(153	)		(14	)		(1,849	)		—			—			(1,863	)
Share-based compensation		—			—			1,866			—			—			1,866
Net income		—			—			—			20,166			—			20,166
Balance, June 30, 2021		14,141		$	1,414		$	105,509		$	268,172		$	(96,112	)	$	278,983

	Six Months Ended June 30, 2022
	Common Stock						Additional Paid-In			Retained			Treasury
	Shares			Amount			Capital			Earnings			Stock			Total
Balance, December 31, 2021		14,157		$	1,416		$	104,745		$	306,105		$	(129,530	)	$	282,736
Cash dividends		—			—			—			(5,927	)		—			(5,927	)
Issuance of restricted stock awards		218			22			(22	)		—			—			—
Exercise of stock options		61			6			—			—			—			6
Repurchase of common stock		—			—			—			—			(20,613	)		(20,613	)
Shares withheld related to net share settlement		(46	)		(5	)		(1,231	)		—			—			(1,236	)
Share-based compensation		—			—			4,853			—			—			4,853
Net income		—			—			—			38,765			—			38,765
Balance, June 30, 2022		14,390		$	1,439		$	108,345		$	338,943		$	(150,143	)	$	298,584

	Six Months Ended June 30, 2021
	Common Stock				Additional Paid-In		Retained			Treasury
	Shares		Amount		Capital		Earnings			Stock			Total
Balance, December 31, 2020		13,851	$	1,385	$	105,483	$	227,343		$	(62,088	)	$	272,123
Cash Dividends		—		—		—		(4,859	)

Regional Management Corp. [RM] Filings
10-Q	[2022-08-05]
10-Q	[2022-05-06]
10-K	[2022-03-04]
10-Q	[2021-11-04]
10-Q	[2021-08-03]
10-Q	[2021-05-06]
10-K	[2021-02-25]
10-Q	[2020-11-05]
10-Q	[2020-08-07]
10-Q	[2020-05-08]
10-K	[2020-03-16]
10-Q	[2019-11-06]
10-Q	[2019-07-31]
10-Q	[2019-05-08]
10-K	[2019-03-08]
10-Q	[2018-11-08]
10-Q	[2018-08-06]
10-Q	[2018-05-01]
10-K	[2018-02-23]
10-Q	[2017-11-08]
10-Q	[2017-08-01]
10-Q	[2017-05-02]
10-K	[2017-02-10]
10-Q	[2016-10-27]
10-Q	[2016-07-26]
10-Q	[2016-04-28]
10-K	[2016-02-23]
10-Q	[2015-10-30]
10-Q	[2015-07-31]
10-Q	[2015-05-08]
10-K	[2015-03-16]
10-Q	[2014-11-10]
10-Q	[2014-08-07]
10-Q	[2014-05-08]
10-K	[2014-03-17]
10-Q	[2013-11-08]
10-Q	[2013-08-09]
10-Q	[2013-05-13]
10-K	[2013-03-18]
10-Q	[2012-11-14]
10-Q	[2012-08-13]
10-Q	[2012-05-10]