Q2 2024 Regional Management Corp Earnings Call Transcript
Key Points
- Regional Management Corp (RM) delivered $8.4 million of net income in the second quarter, a 40% increase compared to the same period last year.
- The company's total revenue grew by 7% year-over-year, reaching $143 million in the second quarter.
- RM's portfolio grew by $29 million sequentially to $1.8 billion, up 5% from the prior year.
- The total revenue yield increased by 80 basis points year-over-year due to increased pricing, growth of higher-margin small loans, and improved credit performance.
- RM maintained tight control over G&A expenses while still investing in growth and strategic initiatives, with revenue growth outpacing G&A expense growth by 2.9 times.
- The company increased its full-year net credit loss (NCL) rate guidance to 11.1% to 11.2%, reflecting the lingering effects of inflation and the growth in higher-margin small loans.
- Despite the growth in revenue, the shift to small loans negatively impacted overall portfolio credit performance and required higher G&A expenses to support the greater collection intensity.
- RM's 30-plus day delinquency rate remained stable at 6.9%, but the growth in the high-margin small loan portfolio added incremental delinquency and NCL rates.
- The economic environment, particularly inflation, has not improved at the pace predicted, continuing to strain RM's customer base.
- The company expects higher provisioning for loan losses in the second half of the year due to higher receivables growth, which will be a near-term drag on earnings.
Ladies and gentlemen, greetings, and welcome to the Regional Management second-quarter 2024 earnings conference call. (Operator Instructions)
As a reminder, this conference is being recorded.
It is now my pleasure to introduce your host, Garrett Edson, ICR. Please go ahead.
Thank you and good afternoon. By now, everyone should have access to our earnings announcement and supplemental presentation which were released prior to this call and may be found on our website at regionalmanagement.com.
Before we begin our formal remarks, I will direct you to page 2 of our supplemental presentation, which contains important disclosures concerning forward-looking statements and the use of non-GAAP financial measures. Part of our discussion today may include forward-looking statements which are based on management's current expectations, estimates, and projections about the company's future financial performance and business prospects.
These forward-looking statements speak
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