Regional Management Corp. Announces Second Quarter 2025 Results

- Net income of $10.1 million and diluted earnings per share of $1.03, up 20% year-over-year -

- Record originations and 10.5% year-over-year portfolio growth drive record revenue -

- Improving credit performance, with 30+ day contractual delinquency and net credit loss rates better by 30 basis points and 80 basis points year-over-year, respectively -

- Annualized operating expense ratio of 13.2%, an all-time best -

Regional Management Corp. (NYSE:RM), a diversified consumer finance company, today announced results for the second quarter ended June 30, 2025.

"We delivered a very strong second quarter, marked by record originations and revenue, improving credit performance, an all-time best operating expense ratio, and significant improvements across other key financial metrics," said Robert W. Beck, President and Chief Executive Officer of Regional Management Corp. "Net income grew to $10.1 million, up 20% year-over-year, and our diluted EPS reached $1.03. This performance reflects outstanding execution by our team as we continue to drive growth, improve our operating effectiveness, and deliver strong returns for shareholders."

"Our portfolio remains healthy and continues to expand responsibly," added Mr. Beck "Net finance receivables rose by $70 million sequentially on $510 million of originations and were up 10.5% year-over-year, aligned with our target of at least 10% portfolio growth in 2025. We are also seeing the positive effects of our credit tightening initiatives, with our 30+ day delinquency rate improving to 6.6% and our net credit loss rate down to 11.9%, both improving significantly from prior periods. We have returned $17.6 million to shareholders year-to-date through buybacks and dividends, while our book value per share increased to $36.43."

"Strategically, we continue to invest in our footprint and innovation," continued Mr. Beck. "We have opened 17 new branches since early September of last year—11 in new markets—and expect to open another 5 to 10 branches in the coming months. Our barbell strategy is driving results, with robust growth in both our auto-secured and higher-margin small loan portfolios. At the same time, we are rolling out new origination and analytics tools while realizing meaningful G&A savings through network and corporate optimization. I believe the second quarter stands as one of our strongest in recent years, and we remain well-positioned to sustain our momentum and create long-term value."

Second Quarter 2025 Highlights

• Net income for the second quarter of 2025 was $10.1 million and diluted earnings per share was $1.03, up 20.1% and 19.8% year-over-year, respectively.
• Net finance receivables as of June 30, 2025 were a record $2.0 billion, an improvement of $186.6 million, or 10.5%, from the prior-year period, driven by receivables growth in 17 new branches opened since the beginning of September 2024 and strong execution of the company's barbell strategy, which balances growth in higher-quality, auto-secured products with growth in the higher-margin small loan portfolio.
  • Record total originations of $510.3 million, up 19.8% from the prior-year period, while maintaining conservative underwriting criteria.
  • Large loan net finance receivables of $1.4 billion increased $147.3 million, or 11.6%, from the prior-year period and represented 72.1% of the total loan portfolio, compared to 71.4% in the prior-year period.
    • Auto-secured net finance receivables of $245.7 million increased $66.2 million, or 36.9%, from the prior-year period and represented 12.5% of the total loan portfolio, compared to 10.1% in the prior-year period.
  • Small loan net finance receivables of $547.0 million increased $39.3 million, or 7.7%, from the prior-year period and represented 27.9% of the total loan portfolio, compared to 28.6% in the prior-year period.
  • Net finance receivables with annual percentage rates (APRs) above 36% increased by 16.3% year-over-year and now represent 18.1% of the portfolio, up from 17.2% in the prior-year period, driven by the increase in the higher-margin small loan portfolio.
  • Customer accounts improved by 6.1% from the prior-year period.
• Record quarterly total revenue of $157.4 million, an increase of $14.4 million, or 10.1%, from the prior-year period, primarily due to growth in average net finance receivables.
  • Total revenue yield for the second quarter of 2025 was 32.9%, compared to 32.7% in the prior-year period.
  • Total revenue yield and interest and fee yield improved 20 and 10 basis points, respectively, from the prior-year period.
• Provision for credit losses for the second quarter of 2025 was $60.6 million, an increase of $6.8 million, or 12.6%, 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 2025 was 11.9%, an 80 basis point improvement compared to 12.7% in the prior-year period. The net credit loss rate included a 40 basis point impact from losses related to prior-year hurricane activity.
  • The allowance for credit losses was $202.8 million as of June 30, 2025, or 10.3% of net finance receivables, an improvement compared to 10.5% sequentially and in the prior-year period. The provision for credit losses for the second quarter of 2025 included a reserve increase of $3.7 million, primarily due to portfolio growth occurring during the second quarter of 2025.
  • The decline in the allowance for credit losses rate was attributable to the release of the remaining hurricane reserves against the associated net credit losses in the second quarter.
• As of June 30, 2025, 30+ day contractual delinquencies totaled $129.4 million, or 6.6% of net finance receivables, a 50 basis point improvement sequentially and 30 basis point improvement from the prior-year period.
  • The delinquency rate of the large loan portfolio was 5.4% as of the end of the second quarter of 2025, a 60 basis point improvement from the prior-year period.
  • The delinquency rate of the small loan portfolio was 9.6% as of the end of the second quarter of 2025, a 50 basis point increase from the prior-year period, reflecting growth in the higher-margin portfolio.
• General and administrative expenses for the second quarter of 2025 were $62.9 million, an increase of $2.8 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 2025 was 13.2%, an all-time best. The ratio reflected improvements of 80 and 60 basis points from 14.0% and 13.8% in the prior-quarter and prior-year periods, respectively. Revenue growth outpaced G&A expense growth by more than 5x in the second quarter.
• In the second quarter of 2025, the company repurchased 164,692 shares of its common stock at a weighted-average price of $30.36 per share under the company's $30 million stock repurchase program.

Third Quarter 2025 Dividend

The company's Board of Directors has declared a dividend of $0.30 per common share for the third quarter of 2025. The dividend will be paid on September 10, 2025 to shareholders of record as of the close of business on August 20, 2025. 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, 2025, the company had net finance receivables of $2.0 billion and debt of $1.5 billion. The debt consisted of:

• $165.5 million on the company's $355 million senior revolving credit facility,
• $82.4 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, 2025, the company's unused capacity to fund future growth on its revolving credit facilities (subject to the borrowing base) was $534 million, or 68.4%, and the company had available liquidity of $121.6 million, including unrestricted cash on hand and immediate availability to draw down cash from its revolving credit facilities. As of June 30, 2025, the company's fixed-rate debt as a percentage of total debt was 84%, with a weighted-average coupon of 4.5% and a weighted-average revolving duration of 1.2 years.

The company had a funded debt-to-equity ratio of 4.2 to 1.0 and a stockholders' equity ratio of 18.5%, each as of June 30, 2025. On a non-GAAP basis, the company had a funded debt-to-tangible equity ratio of 4.5 to 1.0, as of June 30, 2025. 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. Most of its loan products are secured, and each is structured on a fixed-rate, fixed-term basis with fully amortizing equal monthly installment payments, repayable at any time without penalty. 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 make technological improvements as quickly as competitors; security breaches, cyber-attacks, failures in information systems, or fraudulent activity; 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.

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Investor Relations

Garrett Edson, (203) 682-8331

[email protected]