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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended
June 30,
2025
OR
☐
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
RM
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 July 30, 2025,
the registrant had outstanding
9,799,066
sh
ares of Common Stock, $0.10 par value.
Terms and abbreviations used in this report are defined below:
Term or Abbreviation
Definition
2015 Plan
2015 Long-Term Incentive Plan
2024 Plan
2024 Long-Term Incentive Plan
AFS
available-for-sale
ASU
Accounting Standards Update
Board
the Company's Board of Directors
B(W)
comparatively better shown as positives, comparatively worse shown as negatives
CODM
Chief Operating Decision Maker
Company
Regional Management Corp.
Cost of funds
annualized (as applicable) interest expense as a percentage of average net finance receivables
Debt balance
the balance for each respective debt agreement, composed of principal balance and accrued interest
Delinquency rate
delinquent loans outstanding as a percentage of ending net finance receivables
Efficiency ratio
annualized (as applicable) general and administrative expenses as a percentage of total revenue
Exchange Act
the Securities Exchange Act of 1934, as amended
FASB
Financial Accounting Standard Board
FICO
Fair Isaac Corporation
Funded debt-to-equity ratio
debt divided by total stockholders' equity
GAAP
U.S. Generally Accepted Accounting Principles
Inc (Dec)
comparative increases shown as positives, comparative decreases shown as negatives
Issuance Trust
the Company's indirect SPE through which private offerings and sales consisting of the issuance of classes of fixed-rate, asset-backed notes are completed
KTIP
key team member incentive program
LGD
loss given default
LTIP
long-term incentive program
Net credit loss rate
annualized (as applicable) net credit losses as a percentage of average net finance receivables
NQSO
nonqualified stock option
Operating expense ratio
annualized (as applicable) general and administrative expenses as a percentage of average net finance receivables
PD
probability of default
PRSU
performance restricted stock unit
QoQ
quarter-over-quarter
RMIT
Regional Management Issuance Trust
RMR
Regional Management Receivables
RMR III
Regional Management Receivables III, LLC
RMR IV
Regional Management Receivables IV, LLC
RMR V
Regional Management Receivables V, LLC
RMR VI
Regional Management Receivables VI, LLC
RMR VII
Regional Management Receivables VII, LLC
RSA
restricted stock award
RSU
restricted stock unit
SEC
Securities and Exchange Commission
SOFR
secured overnight financing rate
SPE
wholly owned, bankruptcy-remote, special purpose entity
Stockholders' equity ratio
total stockholders' equity as a percentage of total assets
Net finance receivables, less unearned insurance premiums and
allowance for credit losses
1,708,518
1,644,967
Restricted cash
117,658
131,684
Lease assets
42,665
38,442
Intangible assets
28,810
24,524
Restricted AFS investments
22,122
21,712
Property and equipment
13,328
13,677
Deferred tax assets, net
8,367
9,286
Other assets
21,391
20,866
Total assets
$
1,967,131
$
1,909,109
Liabilities and Stockholders’ Equity
Liabilities:
Debt
$
1,509,133
$
1,478,336
Unamortized debt issuance costs
(
6,862
)
(
6,338
)
Net debt
1,502,271
1,471,998
Lease liabilities
44,768
40,579
Other liabilities
57,141
39,454
Total liabilities
1,604,180
1,552,031
Commitments and contingencies (Note 12)
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,
15,225
shares issued and
9,962
shares outstanding at June 30, 2025 and
14,921
shares issued and
10,010
shares outstanding at December 31, 2024)
1,522
1,492
Additional paid-in capital
137,129
130,725
Retained earnings
389,557
378,482
Accumulated other comprehensive income (loss)
(
2
)
62
Treasury stock (
5,263
shares at June 30, 2025 and
4,911
shares at December 31, 2024)
(
165,255
)
(
153,683
)
Total stockholders’ equity
362,951
357,078
Total liabilities and stockholders’ equity
$
1,967,131
$
1,909,109
See accompanying notes to consolidated financial statements.
The Company was incorporated and began operations in 1987. The Company is engaged in the consumer finance business, offering large loans, small loans, and related payment and collateral protection insurance products. As of June 30, 2025, the Company operated under the name “Regional Finance” online and in branch locations in
19
states across the United States.
The Company’s large loan receivables are direct loans to customers, some of which are convenience check receivables and the vast majority of which are secured by non-essential household goods, automobiles, and/or other vehicles. Convenience checks are direct loans originated by mailing checks to customers based on a pre-screening process that includes a review of the prospective customer’s credit profile provided by national credit reporting bureaus or data aggregators. A recipient of a convenience check is able to enter into a loan by endorsing and depositing or cashing the check. The Company’s small loan portfolio is comprised of branch small loan receivables and convenience check receivables. Branch small loan receivables are direct loans to customers and are secured by non-essential household goods and, in some instances, an automobile.
The Company’s loan volume and contractual delinquency follow seasonal trends. Demand for the Company’s loans is typically highest during the second, third, and fourth quarters, which the Company believes is largely due to customers borrowing money for vacation, back-to-school, and holiday spending. Loan demand has generally been the lowest during the first quarter, which the Company believes is largely due to the timing of income tax refunds. Delinquencies generally reach their lowest point in the first half of the year and rise in the second half of the year. Changes in quarterly growth or liquidation could result in larger allowance for credit loss releases in periods of portfolio liquidation and larger provisions for credit losses in periods of portfolio growth. Consequently, the Company experiences seasonal fluctuations in its operating results. However, changes in macroeconomic factors, including inflation, higher interest rates, and geopolitical conflict, have impacted the Company’s typical seasonal trends for loan volume and delinquency.
Note 2. Basis of Presentation and Significant Accounting Policies
Basis of presentation:
The consolidated financial statements of the Company have been prepared in accordance with SEC regulations and GAAP for interim financial information and, accordingly, do not include all information and note disclosures required by GAAP for complete financial statements. The interim financial statements in this Quarterly Report on Form 10-Q have not been audited by an independent registered public accounting firm in accordance with standards of the Public Company Accounting Oversight Board (United States), but in the opinion of management, the interim financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the Company’s financial position, results of operations, and cash flows in accordance with GAAP. These consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024
, as filed with the SEC.
Significant accounting policies:
The following is a description of significant accounting policies used in preparing the financial statements. The accounting and reporting policies of the Company are in accordance with GAAP.
Principles of consolidation:
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The Company operates through a separate wholly owned subsidiary in each state. The Company also consolidates VIEs when it is considered to be the primary beneficiary of the VIE because it has (i) power over the significant activities of the VIE and (ii) the obligation to absorb losses or the right to receive returns that could be significant to the VIE.
Variable interest entities:
The Company transfers pools of loans to SPEs to secure debt for general funding purposes. These entities have the limited purpose of acquiring finance receivables, in addition to holding and making payments on the related debts. Assets transferred to each SPE are legally isolated from the Company and its affiliates, as well as the claims of the Company’s and its affiliates’ creditors. Further, the assets of each SPE are owned by such SPE and are not available to satisfy the debts or other obligations of the Company or any of its affiliates. The Company continues to service the finance receivables transferred to the SPEs. The lenders and investors in the debt issued by the SPEs generally only have recourse to the assets of the SPEs and do not have recourse to the general credit of the Company.
The SPEs’ debt arrangements are structured to provide credit enhancements to the lenders and investors, which may include overcollateralization, subordination of interests, excess spread, and reserve funds. These enhancements, along with the isolated finance receivables pools, increase the creditworthiness of the SPEs above that of the Company as a whole. This increases the
marketability of the Company’s collateral for borrowing purposes, leading to more favorable borrowing terms, improved interest rate risk management, and additional flexibility to grow the business.
The SPEs are considered VIEs under GAAP and are consolidated into the financial statements of their primary beneficiary. The Company is considered to be the primary beneficiary of the SPEs because it has (i) power over the significant activities through its role as servicer of the finance receivables under each debt arrangement, (ii) the obligation to absorb losses that could be significant through note investment, if applicable, and (iii) the obligation to absorb losses or the right to receive returns that could be significant through the Company’s interest in the monthly residual cash flows of the SPEs.
Consolidation of VIEs results in these transactions being accounted for as secured borrowings; therefore, the pooled receivables and the related debts remain on the consolidated balance sheet of the Company. Each debt is secured solely by the assets of the VIEs and not by any other assets of the Company. The assets of the VIEs are the only source of funds for repayment on each debt, and restricted cash held by the VIEs can only be used to support payments on the debt. The Company recognizes revenue and provision for credit losses on the finance receivables of the VIEs and interest expense on the related secured debt.
Use of estimates:
The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and disclosure of contingent assets and liabilities for the periods indicated in the financial statements. Actual results could differ from those estimates.
Estimates that are susceptible to change relate to the determination of the allowance for credit losses, the valuation of deferred tax assets and liabilities, and the fair value of financial instruments.
Recent accounting pronouncements:
In December 2023, the FASB issued ASU 2023-09, enhancing the transparency and decision usefulness of income tax disclosures. The amendment, among other things, improves transparency of income tax disclosures by requiring more consistent categories and greater disaggregation of information in rate reconciliations, and disaggregation of income taxes paid by jurisdiction. The amendments in this update are effective for annual periods beginning after December 15, 2024, and early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The income tax guidance should be applied on a prospective basis, however, retrospective application is permitted. The Company is currently evaluating the impact of this update on its consolidated financial statements.
In November 2024, the FASB issued ASU 2024-03, enhancing the disclosures about a company’s expenses. The amendment, among other things, improves these disclosures by requiring disaggregated expense information about a company’s expense types. The amendments in this update are effective for annual periods beginning after December 15, 2026, and early adoption is permitted. The enhanced expense guidance can be applied on either a prospective (for financial statements issued during reporting periods after the effective date of this ASU) or retrospective (to any or all prior periods presented) basis. The Company is currently evaluating the impact of this update on its consolidated financial statements.
Net finance receivables:
Generally, the Company classifies finance receivables as held for investment based on management’s intent at the time of origination. The Company determines classification on a receivable-by-receivable basis. The Company classifies finance receivables as held for investment due to its ability and intent to hold them until their contractual maturities. Net finance receivables consist of the Company’s installment loans. The Company carries net finance receivables at amortized cost, which includes remaining principal balance, accrued interest, and net unamortized deferred origination costs and unamortized fees.
Loan renewals are a significant piece of new volume and are considered a terminal event of the previous loan. The Company may renew delinquent secured or unsecured loan accounts if the customer meets the Company’s underwriting criteria and it does not appear the cause of past delinquency will affect the customer’s ability to repay the renewed loan.
Finance receivable origination fees and costs:
Non-refundable fees received and direct costs (personnel and digital loan origination costs) incurred for the origination of finance receivables are deferred and recognized to interest income over their contractual lives using the constant yield method. Unamortized amounts are recognized in interest income at the time that finance receivables are paid in full, renewed, or charged off.
Nonaccrual status:
Accrual of interest income on finance receivables is suspended when an account becomes
90
days delinquent. If the account is charged off, the accrued interest income is reversed as a reduction of interest and fee income. Interest received on such loans is accounted for on the cash-basis method, until qualifying for return to accrual. Under the cash-basis method, interest income is recorded when the payment is received. Loans resume accruing interest when the past due status is brought below
90
days. The Company made a policy election to not record an allowance for credit losses related to accrued interest because it has nonaccrual and charge-off policies that result in the timely suspension and reversal of accrued interest.
Allowance for credit losses:
The allowance for credit losses is based on historical credit experience, current conditions, and reasonable and supportable economic forecasts. The historical loss experience is adjusted for quantitative and qualitative factors that are not fully reflected in the historical data. In determining its estimate of expected credit losses, the Company evaluates information related to credit metrics, changes in its lending strategies and underwriting practices, and the current and forecasted direction of the economic and business environment. These metrics include, but are not limited to, loan portfolio mix and growth, unemployment, credit loss trends, delinquency trends, changes in underwriting, and operational risks.
The Company selected a PD / LGD model to estimate its base allowance for credit losses, in which the estimated loss is equal to the product of PD and LGD. Historical net finance receivables are tracked over the term of the pools to identify the incidences of loss (PDs) and the average severity of losses (LGDs).
To enhance the precision of the allowance for credit loss estimate, the Company evaluates its finance receivable portfolio on a pool basis and segments each pool of finance receivables with similar credit risk characteristics. As part of its evaluation, the Company considers loan portfolio characteristics such as product type, loan size, loan term, internal or external credit scores, delinquency status, geographical location, and vintage. Based on analysis of historical loss experience, the Company selected the following segmentation: product type, FICO score, and delinquency status.
As finance receivables are originated, provisions for credit losses are recorded in amounts sufficient to maintain an allowance for credit losses at an adequate level to provide for estimated losses over the contractual life of the finance receivables (considering the effect of prepayments). Subsequent changes to the contractual terms that are a result of re-underwriting are not included in the finance receivable’s contractual life (considering the effect of prepayments). The Company uses its segmentation loss experience to forecast expected credit losses. Historical information about losses generally provides a basis for the estimate of expected credit losses. The Company also considers the need to adjust historical information to reflect the extent to which current conditions differ from the conditions that existed for the period over which historical information was evaluated. These adjustments to historical loss information may be qualitative or quantitative in nature.
Reasonable and supportable macroeconomic forecasts are required for the Company’s allowance for credit loss model. The Company engaged a major rating service to assist with compiling a reasonable and supportable forecast. The Company reviews macroeconomic forecasts to use in its allowance for credit losses. The Company adjusts the historical loss experience by relevant qualitative factors for these expectations. The Company does not require reversion adjustments, as the contractual lives of its portfolio are shorter than its available forecast periods.
The Company charges credit losses against the allowance for all products when an account reaches
180
days contractually delinquent, subject to certain exceptions. The Company’s customer accounts without a lien on a vehicle in a confirmed bankruptcy are charged off in the month following the bankruptcy notification or at
60
days contractually delinquent, subject to certain exceptions. Deceased borrower accounts are charged off in the month following the proper notification of passing, with the exception of borrowers with credit life insurance. Subsequent recoveries of amounts charged off, if any, are credited to the allowance.
Restricted cash:
Restricted cash includes cash and cash equivalents for which the Company’s ability to withdraw funds is contractually limited. The Company’s restricted cash consists of cash reserves that are maintained as collateral for potential credit life insurance claims and cash restricted for debt servicing of the Company’s revolving warehouse credit facilities and securitizations.
Restricted AFS investments:
The Company classifies its investments in debt securities that were purchased with the Company’s restricted cash as restricted AFS investments and carries the investments at fair value. Unrealized gains and losses, net of taxes, are excluded from earnings and reported in other comprehensive income or loss until realized. The unrealized gains and losses, net of taxes, are recorded on the consolidated balance sheet in accumulated other comprehensive income or loss in stockholders’ equity. Realized gains and losses from the sale of AFS investments are specifically identified and reclassified from accumulated other comprehensive income or loss and included within earnings on the consolidated statement of income.
Share-based compensation:
The
Company measures compensation cost for share-based awards at estimated fair value and recognizes compensation expense over the service period for awards expected to vest. The Company uses the closing stock price on the date of grant as the fair value of RSAs, performance-contingent RSUs, and service-based RSUs. The fair value of NQSOs is determined using the Black-Scholes valuation model, and the fair value of PRSUs is determined using the Monte Carlo valuation model. When applicable, the Black-Scholes and Monte Carlo models require the input of assumptions, including expected volatility, expected dividends, expected term, risk-free interest rate, and a discount associated with post-vest holding restrictions, changes to which can affect the fair value estimate. Expected volatility is based on the Company’s historical stock price volatility. Expected dividends are calculated using the expected dividend yield (annualized dividends divided by the grant date stock price). The
expected
term is calculated by using the simplified method (average of the vesting and original contractual terms) due to insufficient historical data to estimate the expected term. The risk-free rate is based on the zero-coupon U.S. Treasury bond rate over the expected term of the awards. The estimated discount associated with post-vest holding restrictions is calculated using a blend of the Finnerty and Chaffe models. In addition, the estimation of share-based awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from current estimates, such amounts will be recorded as a cumulative adjustment in the period estimates are revised.
Note 3. Finance Receivables, Credit Quality Information, and Allowance for Credit Losses
Net finance receivables for the periods indicated consisted of the following:
Dollars in thousands
June 30, 2025
December 31, 2024
Large loans
$
1,413,367
$
1,336,780
Small loans
546,997
555,755
Total
$
1,960,364
$
1,892,535
Net finance receivables included net deferred origination fees and costs of
$
15.2
million
and
$
15.7
million
as of June 30, 2025 and December 31, 2024, respectively.
The credit quality of the Company’s finance receivable portfolio is dependent on the Company’s ability to enforce sound underwriting standards, maintain diligent servicing of the portfolio, and respond to changing economic conditions as it manages and grows its portfolio. The allowance for credit losses uses FICO scores and delinquency as key data points in estimating the allowance. The Company uses
six
FICO band categories to assess FICO scores. The first three FICO band categories include subprime FICO scores below 620. The fourth and fifth FICO band categories include near-prime FICO scores ranging from 620 to 659. The sixth FICO band category includes prime FICO scores of 660 or higher.
The contractual delinquency of the net finance receivables portfolio by product and aging for the periods indicated are as follows:
June 30, 2025
Large
Small
Total
Dollars in thousands
$
%
$
%
$
%
Current
$
1,225,581
86.7
%
$
446,446
81.7
%
$
1,672,027
85.3
%
1 to 29 days past due
111,096
7.9
%
47,855
8.7
%
158,951
8.1
%
Delinquent accounts:
30 to 59 days
21,441
1.5
%
13,921
2.6
%
35,362
1.8
%
60 to 89 days
17,247
1.2
%
11,702
2.1
%
28,949
1.5
%
90 to 119 days
13,501
1.0
%
8,847
1.6
%
22,348
1.1
%
120 to 149 days
12,826
0.9
%
8,799
1.6
%
21,625
1.1
%
150 to 179 days
11,675
0.8
%
9,427
1.7
%
21,102
1.1
%
Total delinquency
$
76,690
5.4
%
$
52,696
9.6
%
$
129,386
6.6
%
Total net finance receivables
$
1,413,367
100.0
%
$
546,997
100.0
%
$
1,960,364
100.0
%
Net finance receivables in nonaccrual status
$
46,034
3.3
%
$
30,491
5.6
%
$
76,525
3.9
%
December 31, 2024
Large
Small
Total
Dollars in thousands
$
%
$
%
$
%
Current
$
1,139,070
85.2
%
$
451,311
81.2
%
$
1,590,381
84.0
%
1 to 29 days past due
109,656
8.2
%
46,656
8.4
%
156,312
8.3
%
Delinquent accounts:
30 to 59 days
22,909
1.7
%
14,039
2.5
%
36,948
1.9
%
60 to 89 days
21,493
1.6
%
13,749
2.5
%
35,242
1.9
%
90 to 119 days
16,609
1.3
%
11,476
2.1
%
28,085
1.5
%
120 to 149 days
14,357
1.1
%
9,630
1.7
%
23,987
1.3
%
150 to 179 days
12,686
0.9
%
8,894
1.6
%
21,580
1.1
%
Total delinquency
$
88,054
6.6
%
$
57,788
10.4
%
$
145,842
7.7
%
Total net finance receivables
$
1,336,780
100.0
%
$
555,755
100.0
%
$
1,892,535
100.0
%
Net finance receivables in nonaccrual status
$
54,228
4.1
%
$
34,602
6.2
%
$
88,830
4.7
%
The accrual of interest income on finance receivables is suspended when an account becomes 90 days delinquent. If a loan is charged off, the accrued interest is reversed as a reduction of interest and fee income. During the three months ended June 30, 2025 and 2024, the Company reversed
$
7.1
million
and
$
6.5
million
of accrued interest as reductions of interest and fee income, respectively. The Company reversed
$
14.4
million
and
$
11.6
million
of accrued interest as reductions of interest and fee income for the six months ended June 30, 2025 and 2024, respectively.
The following are reconciliations of the allowance for credit losses by product for the periods indicated:
As of and For the Three Months Ended June 30, 2025
Dollars in thousands
Large
Small
Total
Beginning balance
$
134,411
$
64,689
$
199,100
Provision for credit losses
36,068
24,519
60,587
Credit losses
(
34,640
)
(
25,888
)
(
60,528
)
Recoveries
2,271
1,370
3,641
Ending balance
$
138,110
$
64,690
$
202,800
Net finance receivables
$
1,413,367
$
546,997
$
1,960,364
Allowance as percentage of net finance receivables
As of and For the Three Months Ended June 30, 2024
Dollars in thousands
Large
Small
Total
Beginning balance
$
126,528
$
60,572
$
187,100
Provision for credit losses
31,493
22,309
53,802
Credit losses
(
35,957
)
(
22,656
)
(
58,613
)
Recoveries
1,914
1,197
3,111
Ending balance
$
123,978
$
61,422
$
185,400
Net finance receivables
$
1,266,032
$
507,711
$
1,773,743
Allowance as percentage of net finance receivables
9.8
%
12.1
%
10.5
%
As of and For the Six Months Ended June 30, 2025
Dollars in thousands
Large
Small
Total
Beginning balance
$
133,506
$
65,994
$
199,500
Provision for credit losses
70,689
47,890
118,579
Credit losses
(
70,395
)
(
51,842
)
(
122,237
)
Recoveries
4,310
2,648
6,958
Ending balance
$
138,110
$
64,690
$
202,800
Net finance receivables
$
1,413,367
$
546,997
$
1,960,364
Allowance as percentage of net finance receivables
9.8
%
11.8
%
10.3
%
As of and For the Six Months Ended June 30, 2024
Dollars in thousands
Large
Small
Total
Beginning balance
$
127,992
$
59,408
$
187,400
Provision for credit losses
60,148
40,077
100,225
Credit losses
(
67,668
)
(
40,138
)
(
107,806
)
Recoveries
3,506
2,075
5,581
Ending balance
$
123,978
$
61,422
$
185,400
Net finance receivables
$
1,266,032
$
507,711
$
1,773,743
Allowance as percentage of net finance receivables
9.8
%
12.1
%
10.5
%
The Company uses certain loan modification programs for borrowers experiencing financial difficulties as a loss mitigation strategy to improve collectability of the loans and assist customers through financial setbacks. The programs consist of offering payment deferrals, refinancing, and, in limited instances, settlements. Customers may also pursue financial assistance through external sources, such as filing for bankruptcy protection. Modification programs available to our customers are described in more detail below:
•
Customers with temporary hardships may be offered payment deferrals related to past due payments. Such deferrals extend the customer’s maturity date and are generally considered insignificant delays, unless the deferral exceeds three deferrals in a rolling twelve-month period.
•
Customers with delinquent loans who meet certain criteria are eligible to receive a reduced interest rate and/or term extension, making the monthly payments more affordable.
•
The Company may also agree to settle a past-due loan by accepting less than the full principal balance owed, in certain limited cases, once it is determined that collection of the entire outstanding balance is unlikely.
•
Customers who receive bankruptcy protection may receive principal forgiveness, interest rate reductions, and/or term extensions.
The information relating to modifications made to borrowers experiencing financial difficulty and their related percentage of applicable net finance receivables for the periods indicated are as follows:
As of and for the Three Months Ended June 30, 2025
Large
Small
Total
Dollars in thousands
$
%
$
%
$
%
Interest rate reduction
$
4,484
0.3
%
$
1,391
0.3
%
$
5,875
0.3
%
Interest rate reduction & term extension
1,831
0.1
%
425
0.1
%
2,256
0.1
%
Term extension
924
0.1
%
125
—
1,049
0.1
%
Principal forgiveness, interest rate reduction, & term extension
242
—
6
—
248
—
Total
$
7,481
0.5
%
$
1,947
0.4
%
$
9,428
0.5
%
As of and for the Three Months Ended June 30, 2024
Large
Small
Total
Dollars in thousands
$
%
$
%
$
%
Interest rate reduction
$
651
0.1
%
$
179
—
$
830
—
Interest rate reduction & term extension
2,635
0.2
%
461
0.1
%
3,096
0.2
%
Term extension
2,117
0.2
%
438
0.1
%
2,555
0.1
%
Principal forgiveness, interest rate reduction, & term extension
162
—
7
—
169
—
Total
$
5,565
0.4
%
$
1,085
0.2
%
$
6,650
0.4
%
As of and for the Six Months Ended June 30, 2025
Large
Small
Total
Dollars in thousands
$
%
$
%
$
%
Interest rate reduction
$
9,536
0.7
%
$
3,134
0.6
%
$
12,670
0.6
%
Interest rate reduction & term extension
4,111
0.3
%
868
0.2
%
4,979
0.3
%
Term extension
1,008
0.1
%
187
—
1,195
0.1
%
Principal forgiveness, interest rate reduction, & term extension
406
—
16
—
422
—
Total
$
15,061
1.1
%
$
4,205
0.8
%
$
19,266
1.0
%
As of and for the Six Months Ended June 30, 2024
Large
Small
Total
Dollars in thousands
$
%
$
%
$
%
Interest rate reduction
$
699
0.1
%
$
181
—
$
880
—
Interest rate reduction & term extension
6,111
0.5
%
1,051
0.2
%
7,162
0.4
%
Term extension
2,496
0.2
%
538
0.1
%
3,034
0.2
%
Principal forgiveness, interest rate reduction, & term extension
287
—
19
—
306
—
Total
$
9,593
0.8
%
$
1,789
0.4
%
$
11,382
0.6
%
The financial effects of the modifications made to borrowers experiencing financial difficulty for the periods indicated are as follows:
Three Months Ended June 30, 2025
Loan Modification
Product
Financial Effect
Interest rate reduction
Large loans
Reduced the weighted-average contractual interest rate by
18.4
%.
Small loans
Reduced the weighted-average contractual interest rate by
28.8
%.
Term extension
Large loans
Added a weighted-average
1.3
years to the life of loans.
Small loans
Added a weighted-average
1.3
years to the life of loans.
Principal forgiveness
Large loans
Reduced the amortized cost basis of the loans by $
0.3
million.
Small loans
Reduced the amortized cost basis of the loans by $
0.1
million.
Reduced the weighted-average contractual interest rate by
9.6
%.
Small loans
Reduced the weighted-average contractual interest rate by
17.6
%.
Term extension
Large loans
Added a weighted-average
1.1
years to the life of loans.
Small loans
Added a weighted-average
1.0
years to the life of loans.
Principal forgiveness
Large loans
Reduced the amortized cost basis of the loans by $
0.3
million.
Small loans
Reduced the amortized cost basis of the loans by $
0.1
million.
Six Months Ended June 30, 2025
Loan Modification
Product
Financial Effect
Interest rate reduction
Large loans
Reduced the weighted-average contractual interest rate by
18.4
%.
Small loans
Reduced the weighted-average contractual interest rate by
29.3
%.
Term extension
Large loans
Added a weighted-average
1.4
years to the life of loans.
Small loans
Added a weighted-average
1.3
years to the life of loans.
Principal forgiveness
Large loans
Reduced the amortized cost basis of the loans by $
0.6
million.
Small loans
Reduced the amortized cost basis of the loans by $
0.2
million.
Six Months Ended June 30, 2024
Loan Modification
Product
Financial Effect
Interest rate reduction
Large loans
Reduced the weighted-average contractual interest rate by
8.4
%.
Small loans
Reduced the weighted-average contractual interest rate by
15.5
%.
Term extension
Large loans
Added a weighted-average
1.3
years to the life of loans.
Small loans
Added a weighted-average
1.2
years to the life of loans.
Principal forgiveness
Large loans
Reduced the amortized cost basis of the loans by $
0.6
million.
Small loans
Reduced the amortized cost basis of the loans by $
0.3
million.
The following tables provide the amortized cost basis for modifications made to borrowers experiencing financial difficulty within the previous twelve months that subsequently defaulted. The Company defines payment default as 90 days past due for this disclosure. The respective amounts for each modification for the periods indicated are as follows:
As of and for the Three Months Ended June 30, 2025
Dollars in thousands
Large
Small
Total
Interest rate reduction
$
1,924
$
852
$
2,776
Interest rate reduction & term extension
678
152
830
Term extension
68
18
86
Principal forgiveness, interest rate reduction, & term extension
63
—
63
Total
$
2,733
$
1,022
$
3,755
As of and for the Three Months Ended June 30, 2024
Dollars in thousands
Large
Small
Total
Interest rate reduction & term extension
$
1,141
$
235
$
1,376
Term extension
45
15
60
Principal forgiveness, interest rate reduction, & term extension
26
—
26
Total
$
1,212
$
250
$
1,462
As of and for the Six Months Ended June 30, 2025
Dollars in thousands
Large
Small
Total
Interest rate reduction
$
2,396
$
977
$
3,373
Interest rate reduction & term extension
863
176
1,039
Term extension
106
24
130
Principal forgiveness, interest rate reduction, & term extension
Principal forgiveness, interest rate reduction, & term extension
27
4
31
Total
$
1,533
$
298
$
1,831
The contractual delinquencies of loans that were modified to borrowers experiencing financial difficulty within the previous twelve months for the periods indicated are as follows:
June 30, 2025
Dollars in thousands
Large
Small
Total
Current
$
16,807
$
3,944
$
20,751
30 - 89 days past due
3,035
1,084
4,119
90+ days past due
1,845
823
2,668
Total (1)
$
21,687
$
5,851
$
27,538
(1)
Excludes modified finance receivables that subsequently charged of
f of
$
2.4
million
and
$
0.8
million
i
n large and small loans, respectively
.
June 30, 2024
Dollars in thousands
Large
Small
Total
Current
$
12,113
$
2,071
$
14,184
30 - 89 days past due
2,000
387
2,387
90+ days past due
1,066
253
1,319
Total (1)
$
15,179
$
2,711
$
17,890
(1)
Excludes modified finance receivables that subsequently charge
d off of
$
1.5
million
and
$
0.3
million
i
n large and small loans, respectively.
Note 4. Restricted Available-for-Sale Investments
The following tables reconcile the amortized cost, gross unrealized gains and losses included in accumulated other comprehensive income or loss, and estimated fair value of the Company’s restricted AFS investments as of the periods indicated:
June 30, 2025
Dollars in thousands
Amortized Cost
Gross Unrealized Gains
Gross Unrealized Losses
Estimated Fair Value
Restricted investments
$
22,124
$
—
$
(
2
)
$
22,122
December 31, 2024
Dollars in thousands
Amortized Cost
Gross Unrealized Gains
Gross Unrealized Losses
Estimated Fair Value
Restricted investments
$
21,633
$
92
$
(
13
)
$
21,712
The following tables include the gross unrealized losses and estimated fair values of restricted AFS investments that were in a continuous unrealized loss position, for which no allowance for credit loss has been recorded, as of the periods indicated:
The restricted AFS investments consist of U.S. Treasuries which are measured at fair value and include accrued interest receivables of
$
13
thousand
as of both June 30, 2025 and December 31, 2024
. The investments consist of highly rated securities backed by the U.S. federal government. As a result, the Company has
not
recorded an allowance for credit losses related to the restricted AFS investments.
The following table includes the amortized cost and estimated fair values of restricted AFS investments by contractual maturity as of the period indicated:
June 30, 2025
Dollars in thousands
Amortized Cost
Estimated Fair Value
Due in one year
$
19,910
$
19,910
Due within one year to five years
2,214
2,212
Due within five years to ten years
—
—
Due after ten years
—
—
Total
$
22,124
$
22,122
The Company ha
d
no
gross realized gains or losses d
uring the three and six months ended June 30, 2025 and 2024
, respectively. For additional information on the Company's restricted AFS investments, see Note 8, "Disclosure About Fair Value of Financial Instruments."
Note 5. Variable Interest Entities
As part of its overall funding strategy, the Company has transferred certain finance receivables to affiliated VIEs for asset-backed financing transactions, including securitizations. The Company’s revolving warehouse credit facilities and securitizations are issued by the Company’s SPEs, which are considered VIEs under GAAP and are consolidated into the financial statements of their primary beneficiary.
These debts are supported by the expected cash flows from the underlying collateralized finance receivables. Collections on these finance receivables are remitted to restricted cash collection accounts, which totaled
$
83.6
million
and
$
117.1
million
as of June 30, 2025 and December 31, 2024, respectively. Cash inflows from the finance receivables are distributed to the lenders/investors, the service providers, and/or the residual interest that the Company owns in accordance with a monthly contractual priority of payments. The SPEs pay a servicing fee to the Company, which is eliminated in consolidation. Distributions from the SPEs to the Company are permitted under the debt arrangements.
At each sale of receivables from the Company’s affiliates to the SPEs, the Company makes certain representations and warranties about the quality and nature of the collateralized receivables. The debt arrangements require the Company to repurchase the receivables in certain circumstances, including circumstances in which the representations and warranties made by the Company concerning the quality and characteristics of the receivables are inaccurate. Assets transferred to each SPE are legally isolated from the Company and its affiliates, as well as the claims of the Company’s and its affiliates’ creditors. Further, the assets of each SPE are owned by such SPE and are not available to satisfy the debts or other obligations of the Company or any of its affiliates.
The following table presents the assets and liabilities of our consolidated VIEs:
Dollars in thousands
June 30, 2025
December 31, 2024
Assets
Cash
$
381
$
378
Net finance receivables
1,461,658
1,317,604
Allowance for credit losses
(
148,872
)
(
136,850
)
Restricted cash
96,958
130,970
Other assets
3,194
3,078
Total assets
$
1,413,319
$
1,315,180
Liabilities
Net debt
$
1,336,929
$
1,253,096
Other liabilities
21
19
Total liabilities
$
1,336,950
$
1,253,115
Note 6. Debt
The following is a summary of the Company’s debt as of the periods indicated:
June 30, 2025
December 31, 2024
Dollars in thousands
Debt
Unamortized Debt Issuance Costs (1)
Net Debt
Debt
Unamortized Debt Issuance Costs (1)
Net Debt
Revolving credit facilities
$
247,914
$
(
184
)
$
247,730
$
315,904
$
(
437
)
$
315,467
Securitizations
1,261,219
(
6,678
)
1,254,541
1,162,432
(
5,901
)
1,156,531
Total
$
1,509,133
$
(
6,862
)
$
1,502,271
$
1,478,336
$
(
6,338
)
$
1,471,998
Unused amount of revolving credit facilities (subject to borrowing base)
$
533,778
$
466,164
(1)
Unamortized debt issuance costs related to the revolving warehouse credit facilities are presented within other assets in the consolidated balance sheets. These credit facilities had
$
2.5
million
and
$
2.2
million
in such costs as of June 30, 2025 and December 31, 2024
, respectively.
Revolving credit facilities:
The Company’s revolving credit facilities are secured by substantially all of the Company’s finance receivables and equity interests of the majority of its subsidiaries. The Company pays unused commitment fees on its revolving credit facilities, generally based upon the average outstanding balance. As of June 30, 2025, the Company held
$
4.3
million
in unrestricted cash. The Company had
$
117.3
million
of immediate available liquidity to draw down cash under the senior revolving credit facility and had no immediate availability to draw down cash under any of its revolving warehouse credit facilities as of June 30, 2025; however, each of the Company’s revolving warehouse credit facilities holds restricted cash reserves to satisfy provisions of its respective credit agreement.
The following table includes the key terms under each of the Company’s revolving credit facilities as of
June 30, 2025:
Dollars in thousands
Total Credit Facility
Debt Balance
Restricted Cash Reserves
Advance Rate Cap
Current Advance Rate
Unused Commitment Fee
Revolving Period End Date
Maturity Date
Senior
$
355,000
$
165,526
$
—
83
%
67
%
0.5
% -
1.0
%
N/A
Sep 2025
RMR IV warehouse (1)
125,000
11,981
151
79
%
79
%
0.5
%
May 2026
May 2027
RMR V warehouse
100,000
21,296
132
80
%
80
%
0.4
% -
0.7
%
Nov 2026
Nov 2027
RMR VI warehouse
75,000
27,813
184
75
%
75
%
0.5
%
Feb 2027
Feb 2028
RMR VII warehouse
125,000
21,298
139
76
%
76
%
0.4
% -
0.7
%
N/A
Oct 2026
Total
$
780,000
$
247,914
$
606
(1)
Following a
May 2025 amendment, the revolving period end date is now
May 2026
(previously
May 2025
), the maturity date is now
May 2027
(previously
May 2026
), and the unused commitment fee is now
0.5
% (previously ranging between
0.4
% -
0.7
%).
Borrowings under the revolving credit facilities bear interest, payable monthly, at a rate equal to the sum of any applicable floor, benchmark adjustment, margin, and the market rate of each respective rate type that was effective as of June 30, 2025 (as follows):
Floor
Benchmark Adjustment
Margin
Rate Type
Effective Interest Rate
Senior
0.5
%
0.1
%
3.0
%
1-month
SOFR
7.4
%
RMR IV warehouse (1)
—
—
2.3
%
1-month
SOFR
6.6
%
RMR V warehouse
—
—
2.1
%
Conduit
6.7
%
RMR VI warehouse
—
—
2.1
%
1-month
SOFR
6.4
%
RMR VII warehouse
—
—
2.4
%
1-month
SOFR
6.7
%
(1)
Following a May 2025 amendment, the benchmark adjustment has been removed (previously
0.1
%), and the margin is now
2.3
% (previously
2.8
%).
Securitizations:
From time to time, the Company and its SPE, RMR III, complete private offerings and sales of asset-backed notes through the Company’s Issuance Trusts. The asset-backed notes are secured by finance receivables and other related assets that RMR III purchased from the Company, which RMR III then sells and transfers to the Issuance Trusts. The Issuance Trusts hold restricted cash reserves to satisfy provisions of the transaction documents. Borrowings under the securitizations bear interest, payable monthly, and principal repayments begin the month subsequent to the end of the revolving period. Prior to maturity, the Company may redeem the notes in full, but not in part, at its option on securitization-specific, designated dates. No payments of principal of the notes will be made during the revolving periods.
The following table includes the key terms under each of the Company’s securitizations as of
June 30, 2025:
Dollars in thousands
Issue Date
Issue Amount
Debt Balance
Restricted Cash Reserves
Effective Interest Rate
Revolving Period End Date
Maturity Date
RMIT 2021-1
Feb 2021
$
248,700
$
54,385
$
2,604
3.5
%
Feb 2024
Mar 2031
RMIT 2021-2
Jul 2021
200,000
200,192
2,083
2.3
%
Jul 2026
Aug 2033
RMIT 2021-3
Oct 2021
125,000
125,202
1,471
3.9
%
Sep 2026
Oct 2033
RMIT 2022-1
Feb 2022
250,000
177,511
2,646
3.8
%
Feb 2025
Mar 2032
RMIT 2024-1
Jun 2024
187,305
187,787
1,078
6.2
%
May 2027
Jul 2036
RMIT 2024-2
Nov 2024
250,000
250,557
1,418
5.3
%
Nov 2026
Dec 2033
RMIT 2025-1
Mar 2025
265,000
265,585
1,489
5.3
%
Mar 2027
Apr 2034
Total
$
1,526,005
$
1,261,219
$
12,789
The Company’s debt arrangements are subject to certain covenants, including monthly and annual reporting, maintenance of specified interest coverage and debt ratios, restrictions on distributions, limitations on other indebtedness, and certain other restrictions. As of June 30, 2025
, the Company was in compliance with all debt covenants.
Note 7. Stockholders’ Equity
Stock repurchase program:
In December 2024, the Company announced that the Board had authorized a $
30
million stock repurchase program. The authorization was effective immediately and extends through
December 31, 2026
. As of
June 30, 2025, under this repurchase program, the Company had repurchased
0.5
million
shares of common stock at a total cost of
$
15.1
million
, including commissions and estimated excise taxes.
Quarterly cash dividend:
The Board may in its discretion declare and pay cash dividends on the Company’s common stock.
The following table presents the dividends declared per share of common stock for the periods indicated:
Three Months Ended June 30,
Six Months Ended June 30,
2025
2024
2025
2024
Dividends declared per common share
$
0.30
$
0.30
$
0.60
$
0.60
See Note 14, “Subsequent Events,” for information regarding the Company’s cash dividend following the end of the fiscal quarter.
Note 8. Disclosure About Fair Value of Financial Instruments
The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:
Cash and restricted cash:
Cash and restricted cash is recorded at cost, which approximates fair value due to its highly liquid nature.
Restricted AFS investments:
The fair value of U.S. Treasury securities is priced using an external pricing service which the Company corroborates using a secondary external vendor. For additional information on the Company's restricted AFS investments, see Note 4, "Restricted Available-for-Sale Investments."
Net finance receivables:
The Company determines the fair value of net finance receivables using a discounted cash flows methodology. The application of this methodology requires the Company to make certain estimates and judgments. These estimates and judgments include, but are not limited to, prepayment rates, default rates, loss severity, and risk-adjusted discount rates.
Debt:
The Company estimates the fair value of debt using estimated credit marks based on an index of similar financial instruments (credit facilities) and projected cash flows from the underlying collateralized finance receivables (securitizations), each discounted using a risk-adjusted discount rate.
Certain of the Company’s assets estimated fair value are classified and disclosed in one of the following three categories:
Level 1 – Quoted market prices in active markets for identical assets or liabilities.
Level 2 – Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.
Level 3 – Unobservable inputs that are not corroborated by market data.
In determining the appropriate levels, the Company performs an analysis of the assets and liabilities that are estimated at fair value. At each reporting period, all assets and liabilities for which the fair value measurement is based on significant unobservable inputs are classified as Level 3.
The following table includes the carrying amounts and estimated fair values of financial assets and liabilities disclosed but not carried at fair value:
June 30, 2025
December 31, 2024
Dollars in thousands
Carrying
Amount
Estimated
Fair Value
Carrying
Amount
Estimated
Fair Value
Assets
Level 1
Cash
$
4,272
$
4,272
$
3,951
$
3,951
Restricted cash
117,658
117,658
131,684
131,684
Level 3
Net finance receivables, less unearned insurance
premiums and allowance for credit losses
1,708,518
1,742,718
1,644,967
1,695,325
Liabilities
Level 3
Debt
1,509,133
1,481,788
1,478,336
1,428,607
The following table includes the carrying amounts and estimated fair values of amounts the Company measures at fair value on a recurring basis:
June 30, 2025
December 31, 2024
Dollars in thousands
Carrying
Amount
Estimated
Fair Value
Carrying
Amount
Estimated
Fair Value
Assets
Level 2
Restricted AFS investments
$
22,122
$
22,122
$
21,712
$
21,712
As of the periods indicated above, there were no financial assets or liabilities measured at fair value on a non-recurring basis.
The Company records interim provisions for income taxes based on an estimated annual effective tax rate. The Company recognizes discrete tax benefits or deficiencies in the income tax line of the consolidated statements of income. Generally, these discrete benefits or deficiencies are primarily the result of exercises or vestings of share-based awards.
The following table summarizes the components of income taxes for the periods indicated:
Three Months Ended June 30,
Six Months Ended June 30,
Dollars in thousands
2025
2024
2025
2024
Provision for corporate taxes
$
3,322
$
2,814
$
5,548
$
7,600
Discrete tax (benefits) deficiencies
22
(
37
)
(
50
)
(
95
)
Total
$
3,344
$
2,777
$
5,498
$
7,505
Note 10. Earnings Per Share
The following schedule reconciles the computation of basic and diluted earnings per share for the periods indicated:
Three Months Ended June 30,
Six Months Ended June 30,
Dollars in thousands, except per share amounts
2025
2024
2025
2024
Numerator:
Net income
$
10,140
$
8,445
$
17,147
$
23,650
Denominator:
Weighted-average shares outstanding for basic earnings per share
9,504
9,613
9,556
9,591
Effect of dilutive securities
339
250
378
214
Weighted-average shares adjusted for dilutive securities
9,843
9,863
9,934
9,805
Earnings per share:
Basic
$
1.07
$
0.88
$
1.79
$
2.47
Diluted
$
1.03
$
0.86
$
1.73
$
2.41
The Company excluded outstanding shares of common stock totaling
0.1
million
and
0.4
million
for the three months ended June 30, 2025 and 2024
, respectively, and
0.1
million
and
0.4
million
for the six months ended June 30, 2025 and 2024
, respectively, from the computation of diluted earnings per share because they were anti-dilutive.
Note 11. Share-Based Compensation
The Company previously adopted the 2015 Plan (including re-approval as amended and restated in April 2017 and May 2021). On May 16, 2024, the stockholders of the Company approved the 2024 Plan.
As of
June 30, 2025
, subject to adjustments as provided in the 2024 Plan, the maximum aggregate number of shares of the Company’s common stock that could be issued under the 2024 Plan could not exceed the sum of (i)
381,000
shares plus (ii) any shares remaining available for the grant of awards as of May 16, 2024 under the 2015 Plan, plus (iii) any shares subject to an award granted under the 2015 Plan which award is forfeited, cash-settled, cancelled, terminated, expires, or lapses for any reason after May 16, 2024 without the issuance of shares or pursuant to which such shares are forfeited (subject to adjustment for anti-dilution purposes as provided in the 2024 Plan). Of the amount described in the preceding sentence, no more than
381,000
shares may be issued under the 2024 Plan pursuant to the grant of incentive stock options (subject to adjustment for anti-dilution purposes). As of May 16, 2024, there were
1.0
million shares available for grant under the 2024 Plan, inclusive of shares previously available for grant under the 2015 Plan that were rolled over to the 2024 Plan. No further grants will be made under the 2015 Plan. However, awards that are outstanding under the 2015 Plan will continue in accordance with their respective terms.
As of
June 30, 2025, there were
0.2
million
shares available for grant under the 2024 Plan.
For the three months ended June 30, 2025 and 2024, the Company recorded share-based compensation expense of
$
2.8
million
and
$
3.3
million
, respectively. The Company recorded
$
6.3
million
and
$
5.1
million
in share-based compensation expense for the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025, unrecognized share-based compensation expense to be recognized over future periods approximated
$
17.0
million
. This amount will be recognized as expense over a weighted-average period of
1.9
years. Share-based compensation expenses are recognized on a straight-line basis over the requisite service period of the agreement. All share-based compensation is classified as equity awards. During the three and six months ended June 30, 2025, share-based compensation of
$
0.1
million
and
$
0.2
million
was capitalized as software, respectively. There was
no
capitalization of share-based compensation during the
three and six months ended June 30, 2024.
The Company allows for the settlement of share-based awards on a net share basis. With net share settlement, the employee does not surrender any cash or shares upon the exercise of stock options or the vesting of stock awards or stock units. Rather, the Company withholds the number of shares with a value equivalent to the option exercise price (for stock options) and the statutory tax withholding (for all share-based awards). Net share settlements have the effect of reducing the number of shares that would have otherwise been issued as a result of exercise or vesting.
Long-term incentive program:
The Company issues PRSUs, service-based RSUs, and RSAs to certain members of senior management under the Company’s LTIP. Recurring annual grants are made at the discretion of the Board. The annual grants are subject to cliff- and graded-vesting, generally concluding at the end of the third calendar year and subject to continued employment or as otherwise provided in the underlying award agreements. Vested PRSUs are subject to an additional
one-year
holding period following the vesting date. The actual value of the PRSUs that may be earned can range from
0
% to
150
% of target based on relative total shareholder return, plus an additive
20
% based on pre-provision return on assets over the performance period, resulting in a maximum payout of
170
%.
PRSUs granted prior to 2025 may earn
0
% to
150
% of target based on positive or negative cumulative total shareholder return concluding at the end of the
third calendar year
.
Key team member incentive program:
The Company also has a KTIP for certain other members of senior management. Recurring annual participation in the program is at the discretion of the Board and executive management. The annual grants are subject to graded-vesting, generally concluding at the end of the third calendar year and subject to continued employment or as otherwise provided in the underlying award agreements.
Prior to 2024,
the annual grant was subject to performance over a one-year period. Payout under the program ranged from
0
% to
150
% of target based on the achievement of five Company performance metrics and individual performance goals (subject to continued employment and certain other terms and conditions of the program).
If earned, an RSA was issued following the
one-year
performance period that vested ratably over a subsequent
two-year
period (subject to continued employment or as otherwise provided in the underlying award agreement).
Inducement and retention program:
From time to time, the Company issues stock awards and other long-term incentive awards in conjunction with employment offers to select new employees and retention grants to select existing employees. The Company issues these awards to attract and retain talent and to provide market competitive compensation. The grants have various vesting terms, including fully-vested awards at the grant date, cliff-vesting, and graded-vesting over periods of up to five years (subject to continued employment or as otherwise provided in the underlying award agreements).
Non-employee director compensation program:
The Company awards its non-employee directors a cash retainer and shares of restricted common stock. The RSAs are granted on the
fifth business day
following the Company’s annual meeting of stockholders and fully vest upon the earlier of the first anniversary of the grant date or the completion of the directors’ annual service to the Company (so long as the period between the date of the annual stockholders’ meeting related to the grant date and the date of the next annual stockholders’ meeting is not less than 50 weeks).
The following are the terms and amounts of the awards issued under the Company’s share-based incentive programs:
Non-qualified stock options:
The exercise price of all stock options is equal to the Company’s closing stock price on the date of grant. Stock options are subject to various vesting terms, including graded- and cliff-vesting over periods of up to
five years
. In addition, stock options vest and become exercisable in full or in part under certain circumstances, including following the occurrence of a change of control (as defined in the option award agreements). Participants who are awarded options must exercise their options within a maximum of
ten years
of the grant date.
The following table summarizes the stock option activity for the
six months ended June 30, 2025:
Dollars and shares in thousands, except per share amounts
Number of Shares
Weighted-Average Exercise Price
Per Share
Weighted-Average Remaining Contractual
Life (Years)
Aggregate Intrinsic Value
Options outstanding at beginning of period
444
$
23.65
Granted
—
—
Exercised
(
23
)
18.13
Forfeited
—
—
Expired
—
—
Options outstanding at end of period
421
$
23.94
4.1
$
2,383
Options exercisable at end of period
421
$
23.94
4.1
$
2,383
The following table provides additional stock option information for the periods indicated:
Three Months Ended June 30,
Six Months Ended June 30,
Dollars in thousands, except per share amounts
2025
2024
2025
2024
Weighted-average grant date fair value per share
$
—
$
—
$
—
$
—
Intrinsic value of options exercised
$
—
$
—
$
401
$
—
Fair value of stock options that vested
$
—
$
—
$
—
$
—
Performance restricted stock units:
Compensation expense for PRSUs is based on the fair value of the award estimated on the grant date using the Monte Carlo valuation model.
The following are the weighted-average assumptions for the PRSU grants for the periods indicated:
Six Months Ended June 30,
2025
2024
Expected volatility
42.0
%
42.5
%
Expected dividends
—
2.3
%
Risk-free rate
4.0
%
5.2
%
Discount for post-vesting restrictions
11.8
%
9.2
%
The following table summarizes PRSU activity for the
six months ended June 30, 2025:
Dollars and units in thousands, except per unit amounts
Units
Weighted-Average
Grant Date
Fair Value Per Unit
Non-vested units at beginning of period
311
$
33.93
Granted
135
25.90
Achieved performance adjustment
(
24
)
52.07
Vested
(
43
)
52.07
Forfeited
—
—
Non-vested units at end of period
379
$
27.86
The following table provides additional PRSU information for the periods indicated:
Three Months Ended June 30,
Six Months Ended June 30,
Dollars in thousands, except per unit amounts
2025
2024
2025
2024
Weighted-average grant date fair value per unit
$
—
$
26.21
$
25.90
$
26.21
Fair value of PRSUs that vested
$
—
$
—
$
2,237
$
—
Performance-contingent restricted stock units:
Compensation expense for performance-contingent RSUs was based on the Company’s closing stock price on the date of grant and the probability that certain financial goals would be achieved over the performance period. Compensation expense was estimated based on expected performance and was adjusted at each reporting period.
There was
no
performance-contingent RSU balance or activity for the six months ended June 30, 2025.
The following table provides additional performance-contingent RSU information for the periods indicated:
Three Months Ended June 30,
Six Months Ended June 30,
Dollars in thousands, except per unit amounts
2025
2024
2025
2024
Weighted-average grant date fair value per unit
$
—
$
—
$
—
$
—
Fair value of RSUs that vested
$
—
$
1,371
$
—
$
1,371
Restricted stock units:
The fair value and compensation expense of the primary portion of the Company’s service-based RSUs are calculated using the Company’s closing stock price on the date of grant. These RSUs include RSUs granted pursuant to the Company’s LTIP.
The following table summarizes service-based RSU activity for the
six months ended June 30, 2025:
Dollars and units in thousands, except per unit amounts
Units
Weighted-Average
Grant Date
Fair Value Per Unit
Non-vested units at beginning of period
35
$
28.20
Granted
51
29.74
Vested
—
—
Forfeited
—
—
Non-vested units at end of period
86
$
29.10
The following table provides additional service-based RSU information for the periods indicated:
Three Months Ended June 30,
Six Months Ended June 30,
Dollars in thousands, except per unit amounts
2025
2024
2025
2024
Weighted-average grant date fair value per unit
$
—
$
28.20
$
29.74
$
28.20
Fair value of RSUs that vested
$
—
$
—
$
—
$
—
Restricted stock awards:
The fair value and compensation expense of the primary portion of the Company’s RSAs are calculated using the Company’s closing stock price on the date of grant. These RSAs include director awards, inducement awards, RSAs granted pursuant to the Company’s LTIP, and, beginning in 2024, RSAs granted pursuant to the Company’s KTIP.
Prior to 2024, the Company’s KTIP was administered as a performance-based program. The fair value and compensation expense of RSAs granted pursuant to the Company’s performance-based KTIP was calculated using the Company’s closing stock price on the date of grant and the probability that certain financial goals would be achieved over the performance period. Compensation expense was estimated based on expected performance and was adjusted at each reporting period.
The following table summarizes RSA activity for the
six months ended June 30, 2025:
Dollars and shares in thousands, except per share amounts
Shares
Weighted-Average
Grant Date
Fair Value Per Share
Non-vested shares at beginning of period
334
$
28.80
Granted
258
29.22
Vested
(
37
)
27.24
Forfeited
(
6
)
29.02
Non-vested shares at end of period
549
$
29.10
The following table provides additional RSA information for the periods indicated:
In the normal course of business, the Company has been named as a defendant in legal actions in connection with its activities. Some of the actual or threatened legal actions include claims for compensatory damages or claims for indeterminate amounts of damages. The Company contests liability and the amount of damages, as appropriate, in each pending matter.
Where available information indicates that it is probable that a liability has been incurred and the Company can reasonably estimate the amount of that loss, the Company accrues the estimated loss by a charge to net income.
However, in many legal actions, it is inherently difficult to determine whether any loss is probable, or even reasonably possible, or to estimate the amount of loss. This is particularly true for actions that are in their early stages of development or where plaintiffs seek indeterminate damages. In addition, even where a loss is reasonably possible or an exposure to loss exists in excess of the liability already accrued, it is not always possible to reasonably estimate the size of the possible loss or range of loss. Before a loss, additional loss, range of loss, or range of additional loss can be reasonably estimated for any given action, numerous issues may need to be resolved, including through lengthy discovery, following determination of important factual matters, and/or by addressing novel or unsettled legal questions.
For certain other legal actions, the Company can estimate reasonably possible losses, additional losses, ranges of loss, or ranges of additional loss in excess of amounts accrued, but the Company does not believe, based on current knowledge and after consultation with counsel, that such losses will have a material adverse effect on the consolidated financial statements.
While the Company will continue to identify legal actions where it believes a material loss to be reasonably possible and reasonably estimable, there can be no assurance that material losses will not be incurred from claims that the Company has not yet been notified of or are not yet determined to be probable, or reasonably possible and reasonable to estimate.
The Company expenses legal costs as they are incurred.
Note 13. Segment Reporting
The Company has
one
reportable segment: consumer finance.
Consolidated net income is the measure used by the CODM in evaluating the segment profit or loss of the Company.
The CODM either reviews or is otherwise regularly provided with amounts for the following measures in the Company’s financial results for the periods indicated:
Three Months Ended June 30,
Six Months Ended June 30,
Dollars in thousands
2025
2024
2025
2024
Interest income
$
130,244
$
118,658
$
257,013
$
238,554
Fee income
10,451
9,240
20,235
18,162
Insurance income, net
11,499
10,507
22,796
21,481
Other income
5,248
4,620
10,365
9,136
Provision for credit losses
60,587
53,802
118,579
100,225
Share-based compensation expense
2,798
3,268
6,299
5,100
Depreciation and amortization expense
2,397
2,287
4,697
4,533
Interest expense
20,426
17,865
40,197
35,369
Income tax expense
3,344
2,777
5,498
7,505
As part of the CODM’s review and evaluation process for allocating resources, the CODM is provided with consolidated expenses and total assets as noted on the face of the Company’s Consolidated Statements of Comprehensive Income and Consolidated Balance Sheets, respectively.
The Company’s balance sheet expenditures for long-lived assets either reviewed by the CODM or otherwise regularly provided to the CODM are included in the Company’s Consolidated Statements of Cash Flows. These expenditures are represented as “Purchases of intangible assets,” “Purchases of property and equipment,” and “Operating leases paid” within the referenced statements.
Quarterly cash dividend:
In
July 2025
, the Company announced that the Board declared a quarterly cash dividend of $
0.30
per share. The dividend will be paid on
September 10, 2025
to shareholders of record at the close of business on
August 20, 2025
. The declaration, amount, and payment of any future cash dividends on shares of the Company’s common stock will be at the discretion of the Board.
ITEM 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The following discussion and analysis should be read in conjunction with, and is qualified in its entirety by reference to, our unaudited consolidated financial statements and the related notes that appear elsewhere in this Quarterly Report on Form 10-Q. These discussions contain forward-looking statements that reflect our current expectations and that include, but are not limited to, statements concerning our strategies, future operations, future financial position, future revenues, projected costs, expectations regarding demand and acceptance for our financial products, growth opportunities and trends in the market in which we operate, prospects, and plans and objectives of management. The words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “predicts,” “will,” “would,” “should,” “could,” “potential,” “continue,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements involve risks and uncertainties that could cause actual results, events, and/or performance to differ materially from the plans, intentions, and expectations disclosed in the forward-looking statements. Such risks and uncertainties include, without limitation, the risks set forth in our filings with the SEC, including our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (which was filed with the SEC on February 21, 2025), our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2025 (which was filed with the SEC on May 2, 2025), and this Quarterly Report on Form 10-Q. The forward-looking information we have provided in this Quarterly Report on Form 10-Q pursuant to the safe harbor established under the Private Securities Litigation Reform Act of 1995 should be evaluated in the context of these factors. Forward-looking statements speak only as of the date they were made, and we undertake no obligation to update or revise such statements, except as required by the federal securities laws.
Overview
We are a diversified consumer finance company that provides installment loan products primarily to customers with limited access to consumer credit from banks, thrifts, credit card companies, and other lenders. As of June 30, 2025, we operate under the name “Regional Finance” online and in 352 branch locations in 19 states across the United States, serving 579,100 active accounts. Most of our 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. We source our loans through our omni-channel platform, which includes our branches, centrally-managed direct mail campaigns, digital partners, and our consumer website. We operate an integrated branch model in which nearly all loans, regardless of origination channel, are serviced through our branch network with the support of centralized sales, underwriting, service, collections, and administrative teams. This model provides us with frequent contact with our customers, which we believe improves our credit performance and customer loyalty. Our goal is to consistently grow our finance receivables and to soundly manage our portfolio risk, while providing our customers with attractive and easy-to-understand loan products that serve their varied financial needs.
Our products include:
•
Large Loans (>$2,500)
– As of June 30, 2025, we had 268.5 thousand large installment loans outstanding, representing $1.4 billion in net finance receivables. This included 72.8 thousand large loan convenience checks, representing $209.6 million in net finance receivables.
•
Small Loans (≤$2,500)
– As of June 30, 2025, we had 310.7 thousand small installment loans outstanding, representing $547.0 million in net finance receivables. This included 167.1 thousand small loan convenience checks, representing $259.9 million in net finance receivables.
•
Optional
Insurance Products
– We offer optional payment and collateral protection insurance to our direct loan customers.
Large and small installment loans are our core products and will be the drivers of future growth. Our primary sources of revenue are interest and fee income from our loan products, of which interest and fees relating to large and small installment loans are the largest component. In addition to interest and fee income from loans, we earn revenue from optional insurance products purchased by customers of our direct loan products.
We continually assess the macroeconomic environment in which we operate in order to adapt appropriately and timely to current market conditions. Macroeconomic factors, including, but not limited to, inflationary pressures, higher interest rates, tariffs, and impacts from current geopolitical events outside the U.S., may affect our business, liquidity, financial condition, and results of operations.
We continue to execute our barbell strategy of growth in our higher-margin loan portfolio while balancing the associated risk with growth in our high-quality, auto-secured loan portfolio. Our portfolio of loans with an annual percentage rate greater than 36% grew by $49.8 million to 18.1% of the portfolio, while our auto-secured loan portfolio grew by $66.2 million to 12.5% of the portfolio.
Our allowance for credit losses was 10.3% of net finance receivables as of June 30, 2025. Going forward, macroeconomic conditions may necessitate changes to the macroeconomic assumptions within our forecast and to our credit loss performance outlook, either of which could lead to further changes in our allowance for credit losses, reserve rate, and provision for credit losses expense.
We have proactively diversified our funding over the past few years and continue to maintain a strong liquidity profile. As of June 30, 2025, we had $121.6 million of available liquidity, comprised of unrestricted cash on hand and immediate availability to draw down cash from our revolving credit facilities. In addition, we had $533.8 million of unused capacity on our revolving credit facilities (subject to the borrowing base) as of June 30, 2025. We believe our liquidity position provides substantial runway to support the fundamental operations of our business and to fund future growth.
Factors Affecting Our Results of Operations
Our business is impacted by several factors affecting our revenues, costs, and results of operations, including the following:
Quarterly Information and Seasonality
.
Our loan volume and contractual delinquency follow seasonal trends. Demand for our loans is typically highest during the second, third, and fourth quarters, which we believe is largely due to customers borrowing money for vacation, back-to-school, and holiday spending. Loan demand has generally been the lowest during the first quarter, which we believe is largely due to the timing of income tax refunds. Delinquencies generally reach their lowest point in the first half of the year and rise in the second half of the year. Changes in quarterly growth or liquidation could result in larger allowance for credit loss releases in periods of portfolio liquidation and larger provisions for credit losses in periods of portfolio growth. Consequently, we experience seasonal fluctuations in our operating results. However, changes in macroeconomic factors, including inflation, higher interest rates, and geopolitical conflict, have impacted our typical seasonal trends for loan volume and delinquency.
Growth in Loan Portfolio.
The revenue that we generate from interest and fees is largely driven by the balance of loans that we originate. We source our loans through our branches, centrally-managed direct mail program, digital partners, and our consumer website. The majority of our loans, regardless of origination channel, are serviced through our branches. Increasing the number of loans per branch and growing our state footprint allows us to increase the number of customers we are able to serve. We continue to assess our branch network for clear opportunities to add branches in new and existing states where it is favorable for us to conduct business or consolidate operations into larger branches within close geographic proximity. This branch optimization is consistent with our omni-channel strategy and builds upon our recent successes in entering new states with a lighter branch footprint, while still providing customers with best-in-class service. As we consider our growth rate, we not only consider the health of the consumer, the strength of the economy, and the credit performance of our portfolio, but we also balance our commitment to deliver strong short-term results for investors while also generating the portfolio growth that will fuel our success and returns over the long-term. As we grow our portfolio, we are required to reserve for expected lifetime credit losses at the origination of each loan, which reduces net income. The related revenue benefits are recognized over the life of each loan.
Product Mix.
We are exposed to different credit risks and charge different interest rates and fees with respect to the various types of loans we offer. Our product mix also varies to some extent by state, and we may further diversify our product mix in the future. The interest rates and fees vary from state to state, depending on the competitive environment and relevant laws and regulations.
Asset Quality and Allowance for Credit Losses.
Our results of operations are highly dependent upon the credit quality of our loan portfolio. The credit quality of our loan portfolio is the result of our ability to enforce sound underwriting standards, maintain diligent servicing of the portfolio, and respond to changing economic conditions as we grow our loan portfolio.
The primary underlying factors driving the provision for credit losses for each loan type are our underwriting standards, delinquency trends, the general economic conditions in the areas in which we conduct business, loan portfolio growth, and the effectiveness of our servicing and collection efforts. We monitor these factors, and the amount and past due status of all loans, to identify trends that might require us to modify the allowance for credit losses.
Interest Rates.
Our costs of funds are affected by changes in interest rates, as the interest rates that we pay on certain of our credit facilities are variable. As a component of our strategy to manage the interest rate risk associated with future interest payments on our variable-rate debt, a majority of our funding was held at a fixed rate as of June 30, 2025, representing 84% of our total debt.
Operating
Costs.
Our financial results are impacted by the costs of operations and head office functions. Those costs are included in general and administrative expenses within our consolidated statements of comprehensive income.
Components of Results of Operations
Interest and Fee Income.
Our interest and fee income consists primarily of interest earned on outstanding loans. Accrual of interest income on finance receivables is suspended when an account becomes 90 days delinquent. If the account is charged off, the accrued interest income is reversed as a reduction of interest and fee income.
Most states allow certain fees in connection with lending activities, such as loan origination fees, acquisition fees, and maintenance fees. Some states allow for higher fees while keeping interest rates lower. Loan fees are additional charges to the customer and generally are included in the annual percentage rate shown in the Truth in Lending disclosure that we make to our customers. The fees may or may not be refundable to the customer in the event of an early payoff, depending on state law. Fees are recognized as income over the life of the loan on the constant yield method.
Insurance Income, Net.
Our insurance operations are a material part of our overall business and are integral to our lending activities. Insurance income, net consists primarily of earned premiums, net of certain direct costs, from the sale of various optional payment and collateral protection insurance products offered to customers who obtain loans directly from us. Insurance income, net also includes the earned premiums and direct costs associated with the non-file insurance that we purchase to protect us from credit losses where, following an event of default, we are unable to take possession of personal property collateral because our security interest is not perfected. We do not sell insurance to non-borrowers. Direct costs included in insurance income, net are claims paid, claims reserves, ceding fees, and premium taxes paid. We do not allocate to insurance income, net, any other head office or branch administrative costs associated with management of insurance operations, management of our captive insurance company, marketing and selling insurance products, legal and compliance review, or internal audits.
Other Income.
Our other income consists of late charges assessed on customers who fail to make a payment within a specified number of days following the due date of the payment, interest income from restricted cash, commissions earned from the sale of club membership products, and investment income from restricted AFS securities.
Provision for Credit Losses.
Provisions for credit losses are charged to income in amounts that we estimate as sufficient to maintain an allowance for credit losses at an adequate level to provide for lifetime expected credit losses on the related finance receivable portfolio. We reserve for expected lifetime credit losses at origination of each loan, while the revenue benefits are recognized over the life of the loan. Credit loss experience, current conditions, reasonable and supportable economic forecasts, delinquency of finance receivables, loan portfolio growth, the value of underlying collateral, and management’s judgment are factors used in assessing the overall adequacy of the allowance and the resulting provision for credit losses. Substantial adjustments to the allowance may be necessary if there are significant changes in forecasted economic conditions or loan portfolio performance.
General and Administrative Expenses.
Our financial results are impacted by the costs of operations and head office functions. Those costs are included in general and administrative expenses within our consolidated statements of comprehensive income. Our general and administrative expenses are comprised of four categories: personnel, occupancy, marketing, and other.
Our personnel expenses are the largest component of our general and administrative expenses and consist primarily of the salaries and wages, overtime, contract labor, relocation costs, incentives, benefits, and related payroll taxes associated with all of our operations and head office employees.
Our occupancy expenses consist primarily of the cost of renting our facilities, all of which are leased, and the utility, depreciation of leasehold improvements and furniture and fixtures, communication services, data processing, and other non-personnel costs associated with operating our business.
Our marketing expenses consist primarily of costs associated with our direct mail campaigns (including postage and costs associated with selecting recipients), digital marketing, maintaining our consumer website, and local marketing by branches. These costs are expensed as incurred.
Other expenses consist primarily of legal, compliance, audit, and consulting costs, as well as software maintenance and support, non-employee director compensation, electronic payment processing costs, bank service charges, office supplies, credit bureau charges, and the amortization of software, software licenses, and implementation costs. We frequently experience fluctuations in other expenses as we grow our loan portfolio and expand our market footprint.
For a discussion regarding how risks and uncertainties associated with the current regulatory environment may impact our future expenses, net income, and overall financial condition, see Part II, Item 1A, “Risk Factors.”
Interest Expense.
Our interest expense consists primarily of paid and accrued interest for debt, unused line fees, and amortization of debt issuance costs on debt.
Income Taxes.
Income taxes consist of state and federal income taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The change in deferred tax assets and liabilities is recognized in the period in which the change occurs, and the effects of future tax rate changes are recognized in the period in which the enactment of new rates occurs.
Results of Operations
The following table summarizes our results of operations, both in dollars and as a percentage of average net finance receivables (annualized):
2Q 25
2Q 24
YTD 25
YTD 24
Dollars in thousands
Amount
% of
Average Net Finance
Receivables
Amount
% of
Average Net Finance
Receivables
Amount
% of
Average Net Finance
Receivables
Amount
% of
Average Net Finance
Receivables
Revenue
Interest and fee income
$
140,695
29.4
%
$
127,898
29.3
%
$
277,248
29.2
%
$
256,716
29.3
%
Insurance income, net
11,499
2.4
%
10,507
2.4
%
22,796
2.4
%
21,481
2.4
%
Other income
5,248
1.1
%
4,620
1.0
%
10,365
1.1
%
9,136
1.1
%
Total revenue
157,442
32.9
%
143,025
32.7
%
310,409
32.7
%
287,333
32.8
%
Expenses
Provision for credit losses
60,587
12.7
%
53,802
12.3
%
118,579
12.5
%
100,225
11.4
%
Personnel
38,584
8.1
%
37,097
8.5
%
79,726
8.4
%
74,917
8.5
%
Occupancy
6,911
1.4
%
6,149
1.4
%
13,817
1.5
%
12,524
1.4
%
Marketing
5,059
1.1
%
4,836
1.1
%
10,465
1.1
%
9,151
1.0
%
Other
12,391
2.6
%
12,054
2.8
%
24,980
2.6
%
23,992
2.9
%
Total general and administrative
62,945
13.2
%
60,136
13.8
%
128,988
13.6
%
120,584
13.8
%
Interest expense
20,426
4.2
%
17,865
4.0
%
40,197
4.2
%
35,369
4.0
%
Income before income taxes
13,484
2.8
%
11,222
2.6
%
22,645
2.4
%
31,155
3.6
%
Income taxes
3,344
0.7
%
2,777
0.7
%
5,498
0.6
%
7,505
0.9
%
Net income
$
10,140
2.1
%
$
8,445
1.9
%
$
17,147
1.8
%
$
23,650
2.7
%
Information explaining the changes in our results of operations from year-to-year is provided in the following pages.
The following discussion and table describe the changes in finance receivables by product type:
•
Large Loans (>$2,500)
– Large loans outstanding increased by $147.3 million, or 11.6%, to over $1.4 billion as of the period ending June 30, 2025, compared to the period ended June 30, 2024. The increase was due to growth in our auto-secured loan portfolio, the growth of receivables in branches opened during 2024 and 2025, and the transition of small loan customers to large loans.
•
Small Loans (≤$2,500)
– Small loans outstanding increased by $39.3 million, or 7.7%, to $547.0 million at June 30, 2025, from $507.7 million at June 30, 2024. The increase was due to marketing, growth in our higher-margin loan portfolio, and growth of receivables in branches opened during 2024 and 2025, partially offset by the transition of small loan customers to large loans.
Net Finance Receivables by Product
Dollars in thousands
2Q 25
2Q 24
YoY $
Inc (Dec)
YoY %
Inc (Dec)
Large loans
$
1,413,367
$
1,266,032
$
147,335
11.6
%
Small loans
546,997
507,711
39,286
7.7
%
Total
$
1,960,364
$
1,773,743
$
186,621
10.5
%
Number of branches
352
343
9
2.6
%
Net finance receivables per branch
$
5,569
$
5,171
$
398
7.7
%
Comparison of the Three Months Ended June 30, 2025, versus the Three Months Ended June 30, 2024
Net Income.
Net income increased $1.7 million, or 20.1%, to $10.1 million during the three months ended June 30, 2025, from $8.4 million during the prior-year period. The change in net income is explained in greater detail below.
Revenue.
Total revenue increased $14.4 million, or 10.1%, to $157.4 million during the three months ended June 30, 2025, from $143.0 million during the prior-year period. The components of revenue are explained in greater detail below.
Interest and Fee Income
.
Interest and fee income increased $12.8 million, or 10.0%, to $140.7 million during the three months ended June 30, 2025, from $127.9 million during the prior-year period. The increase was primarily due to a 9.4% increase in average net finance receivables and a 0.1% increase in annualized average yield. The increase in yield was primarily due to improved credit performance.
The following table sets forth the average net finance receivables balance and average yield for our loan products:
Average Net Finance Receivables for the
Three Months Ended
Average Yields for the
Three Months Ended (1)
Dollars in thousands
2Q 25
2Q 24
YoY %
Inc (Dec)
2Q 25
2Q 24
YoY
Inc (Dec)
Large loans
$
1,372,783
$
1,255,729
9.3
%
26.6
%
26.1
%
0.5
%
Small loans
540,106
493,048
9.5
%
36.5
%
37.2
%
(0.7
)%
Total
$
1,912,889
$
1,748,777
9.4
%
29.4
%
29.3
%
0.1
%
(1) Annualized interest and fee income as a percentage of average net finance receivables.
Total originations increased to $510.3 million during the three months ended June 30, 2025, from $426.1 million during the prior-year period. The following table represents the principal balance of loans originated and refinanced:
The following table summarizes the components of the increase in interest and fee income:
Components of Increase in Interest and Fee Income
2Q 25 Compared to 2Q 24
Increase (Decrease)
Dollars in thousands
Volume
Rate
Volume &
Rate
Net
Large loans
$
7,644
$
1,654
$
154
$
9,452
Small loans
4,380
(945
)
(90
)
3,345
Product mix
(22
)
17
5
—
Total
$
12,002
$
726
$
69
$
12,797
Insurance Income, Net
.
Insurance income, net increased $1.0 million, or 9.4% to $11.5 million during the three months ended June 30, 2025, from $10.5 million during the prior-year period. During both the three months ended June 30, 2025 and 2024, personal property insurance premiums represented the largest component of aggregate earned insurance premiums. During both the three months ended June 30, 2025 and 2024, life insurance claims expense represented the largest component of direct insurance expenses.
The following table summarizes the components of insurance income, net:
Insurance Premiums and Direct Expenses for the Three Months Ended
Dollars in thousands
2Q 25
2Q 24
YoY $
B(W)
YoY %
B(W)
Earned premiums
$
14,278
$
13,901
$
377
2.7
%
Claims, reserves, and certain direct expenses
(2,779
)
(3,394
)
615
18.1
%
Insurance income, net
$
11,499
$
10,507
$
992
9.4
%
Earned premiums increased by $0.4 million, and claims, reserves, and certain direct expenses decreased by $0.6 million, in each case compared to the prior-year period. The increase in insurance premiums was primarily due to an increase in personal property insurance premiums. The decrease in claims, reserves, and direct expenses was primarily due to a release in personal property insurance reserves related to hurricane activity in the prior-year.
Other Income
.
Other income increased $0.6 million, or 13.6%, to $5.2 million during the three months ended June 30, 2025, from $4.6 million during the prior-year period, primarily due to an increase in sales of our club membership products of $0.6 million.
Provision for Credit Losses.
Our provision for credit losses increased $6.8 million, or 12.6%, to $60.6 million during the three months ended June 30, 2025, from $53.8 million during the prior-year period. The increase was due to an increase in net credit losses of $1.4 million and the change in provision expense of $5.4 million, in each case compared to the prior-year period. The increase in the provision for credit losses is explained in greater detail below.
Allowance for Credit Losses.
We evaluate delinquency and losses in each of our loan products in establishing the allowance for credit losses. During the three months ended June 30, 2025 and 2024, the allowance for credit losses included a build of $3.7 million and a release of $1.7 million, respectively. The allowance for credit losses as a percentage of net finance receivables decreased to 10.3% as of June 30, 2025, from 10.5% as of June 30, 2024 from a release of remaining hurricane reserves as related losses impacted net credit losses in the current quarter.
Net Credit Losses.
Net credit losses increased $1.4 million, or 2.5%, to $56.9 million during the three months ended June 30, 2025, from $55.5 million during the prior-year period. The net credit loss rate was 11.9% during the three months ended June 30, 2025, compared to 12.7% during the prior-year period. This 80 basis point improvement was due to credit tightening and effective portfolio management.
Delinquency Performance.
Our delinquency rate improved to 6.6% as of June 30, 2025, from 6.9% during the prior-year period, reflecting the overall improved credit quality and performance of our portfolio.
The following tables include delinquency balances by aging category and by product:
Contractual Delinquency by Aging
Dollars in thousands
2Q 25
2Q 24
Current
$
1,672,027
85.3
%
$
1,497,219
84.4
%
1 to 29 days past due
158,951
8.1
%
153,788
8.7
%
Delinquent accounts:
30 to 59 days
35,362
1.8
%
34,924
1.9
%
60 to 89 days
28,949
1.5
%
27,689
1.6
%
90 to 119 days
22,348
1.1
%
21,607
1.2
%
120 to 149 days
21,625
1.1
%
19,333
1.1
%
150 to 179 days
21,102
1.1
%
19,183
1.1
%
Total delinquency
$
129,386
6.6
%
$
122,736
6.9
%
Total net finance receivables
$
1,960,364
100.0
%
$
1,773,743
100.0
%
Contractual Delinquency by Product
Dollars in thousands
2Q 25
2Q 24
Large loans
$
76,690
5.4
%
$
76,432
6.0
%
Small loans
52,696
9.6
%
46,304
9.1
%
Total
$
129,386
6.6
%
$
122,736
6.9
%
General and Administrative Expenses.
Our general and administrative expenses increased $2.8 million, or 4.7%, to $62.9 million during the three months ended June 30, 2025, from $60.1 million during the prior-year period. The absolute dollar increase in general and administrative expenses is explained in greater detail below.
Personnel.
The largest component of general and administrative expenses was personnel expense, which increased $1.5 million, or 4.0%, to $38.6 million during the three months ended June 30, 2025, from $37.1 million during the prior-year period. The increase was driven by increased labor costs of $2.2 million to support growth, including staffing 17 new branches since the prior-year period. This increase was partially offset by higher capitalized loan origination costs, which reduce personnel expenses, of $0.7 million.
Occupancy.
Occupancy expenses increased $0.8 million, or 12.4%, to $6.9 million during the three months ended June 30, 2025, from $6.1 million during the prior-year period primarily due to increased rent expense of $0.6 million, inclusive of expenses associated with opening 17 new branches since the prior-year period.
Marketing.
Marketing expenses increased $0.2 million, or 4.6%, to $5.1 million during the three months ended June 30, 2025, from $4.8 million during the prior-year period due to increased digital marketing and direct mail activity of $0.2 million to support growth in our legacy and new branch markets.
Other Expenses.
Other expenses increased $0.3 million, or 2.8%, to $12.4 million during the three months ended June 30, 2025, from $12.1 million during the prior-year period. We often experience increases in other expenses including legal expenses, bank fees, and certain professional expenses as we grow our loan portfolio and expand our market footprint.
Operating Expense Ratio.
Our operating expense ratio decreased by 0.6% to 13.2% during the three months ended June 30, 2025, from 13.8% during the prior-year period.
Interest Expense.
Interest expense increased $2.6 million, or 14.3%, to $20.4 million during the three months ended June 30, 2025, from $17.9 million during the prior-year period. The increase was primarily due to an increase in our cost of funds as well as an increase in the average balance of our debt facilities. Our cost of funds increased 0.2% to 4.2% during the three months ended June 30, 2025, from 4.0% during the prior-year period. The average balance of our debt facilities increased to $1.5 billion during the three months ended June 30, 2025, from $1.4 billion during the prior-year period.
Income Taxes.
Income taxes increased $0.6 million, or 20.4%, to $3.3 million during the three months ended June 30, 2025, from $2.8 million during the prior-year period. The increase was primarily due to a $2.3 million increase in income before income taxes compared to the prior-year period. Our effective tax rates were 24.8% and 24.7% for the three months ended June 30, 2025 and 2024, respectively.
Comparison of the Six Months Ended June 30, 2025, versus the Six Months Ended June 30, 2024
Net Income.
Net income decreased $6.5 million, or 27.5%, to $17.1 million during the six months ended June 30, 2025, from $23.7 million during the prior-year period. The change in net income is explained in greater detail below.
Revenue.
Total revenue increased $23.1 million, or 8.0%, to $310.4 million during the six months ended June 30, 2025, from $287.3 million during the prior-year period. The components of revenue are explained in greater detail below.
Interest and Fee Income
.
Interest and fee income increased $20.5 million, or 8.0%, to $277.2 million during the six months ended June 30, 2025, from $256.7 million during the prior-year period. The increase was primarily due to an 8.4% increase in average net finance receivables. Annualized average yield decreased by 0.1% primarily due to the estimated 30 basis point benefit in the prior-year period related to the fourth quarter 2023 loan sale, partially offset by improved credit performance. The six months ended June 30, 2024 included reductions in revenue reversals of an estimated $1.7 million attributable to the fourth quarter 2023 loan sale.
The following table sets forth the average net finance receivables balance and average yield for our loan products:
Average Net Finance Receivables for the
Six Months Ended
Average Yields for the
Six Months Ended (1)
Dollars in thousands
YTD 25
YTD 24
YoY %
Inc (Dec)
YTD 25
YTD 24
YoY
Inc (Dec)
Large loans
$
1,356,543
$
1,259,611
7.7
%
26.4
%
26.1
%
0.3
%
Small loans
544,520
494,149
10.2
%
36.2
%
37.5
%
(1.3
)%
Total
$
1,901,063
$
1,753,760
8.4
%
29.2
%
29.3
%
(0.1
)%
(1) Annualized interest and fee income as a percentage of average net finance receivables.
Total originations increased to $902.4 million during the six months ended June 30, 2025, from $752.4 million during the prior-year period. The following table represents the principal balance of loans originated and refinanced:
Loans Originated for the Six Months Ended
Dollars in thousands
YTD 25
YTD 24
YoY $
Inc (Dec)
YoY %
Inc (Dec)
Large loans
$
578,282
$
439,853
$
138,429
31.5
%
Small loans
324,167
312,563
11,604
3.7
%
Total
$
902,449
$
752,416
$
150,033
19.9
%
The following table summarizes the components of the increase in interest and fee income:
Components of Increase in Interest and Fee Income
YTD 25 Compared to YTD 24
Increase (Decrease)
Insurance Income, Net
.
Insurance income, net increased $1.3 million, or 6.1% to $22.8 million during the six months ended June 30, 2025, from $21.5 million during the prior-year period. During both the six months ended June 30, 2025 and 2024, personal property insurance premiums represented the largest component of aggregate earned insurance premiums. During both the six months ended June 30, 2025 and 2024, life insurance claims expense represented the largest component of direct insurance expenses.
The following table summarizes the components of insurance income, net:
Insurance Premiums and Direct Expenses for the Six Months Ended
Dollars in thousands
YTD 25
YTD 24
YoY $
B(W)
YoY %
B(W)
Earned premiums
$
28,641
$
28,400
$
241
0.8
%
Claims, reserves, and certain direct expenses
(5,845
)
(6,919
)
1,074
15.5
%
Insurance income, net
$
22,796
$
21,481
$
1,315
6.1
%
Earned premiums increased by $0.2 million, and claims, reserves, and certain direct expenses decreased by $1.1 million, in each case compared to the prior-year period. The increase in insurance premiums was primarily due to increases in personal property insurance premiums and life insurance premiums. The decrease in claims, reserves, and direct expenses was primarily due to a release in personal property insurance reserves related to hurricane activity in the prior-year.
Other Income
.
Other income increased $1.2 million, or 13.5%, to $10.4 million during the six months ended June 30, 2025, from $9.1 million during the prior-year period, primarily due to an increase in sales of our club membership products of $1.0 million, higher late charges of $0.6 million associated with portfolio growth and higher investment income from securities of $0.1 million, partially offset by a decrease in interest income of $0.6 million from lower restricted cash requirements.
Provision for Credit Losses.
Our provision for credit losses increased $18.4 million, or 18.3%, to $118.6 million during the six months ended June 30, 2025, from $100.2 million during the prior-year period. The increase was due to an increase in net credit losses of $13.1 million and the change in provision expense of $5.3 million, in each case compared to the prior-year period. The increase in the provision for credit losses is explained in greater detail below.
Allowance for Credit Losses.
We evaluate delinquency and losses in each of our loan products in establishing the allowance for credit losses. During the six months ended June 30, 2025 and 2024, the allowance for credit losses included a build of $3.3 million and a release of $2.0 million, respectively. The allowance for credit losses as a percentage of net finance receivables decreased to 10.3% as of June 30, 2025, from 10.5% as of June 30, 2024 due to a release of remaining hurricane reserves as related losses impacted net credit losses in the current year.
Net Credit Losses.
Net credit losses increased $13.1 million, or 12.8%, to $115.3 million during the six months ended June 30, 2025, from $102.2 million during the prior-year period. Our net credit losses during the prior-year period were inclusive of an estimated $12.2 million benefit from accelerated charge-offs in the fourth quarter of 2023 attributable to the fourth quarter 2023 loan sale. The net credit loss rate was 12.1% during the six months ended June 30, 2025, compared to 11.7% during the prior-year period. Our net credit loss ratio during the six months ended June 30, 2024 was inclusive of an estimated 130 basis point benefit related to the fourth quarter 2023 loan sale.
Delinquency Performance.
Our delinquency rate improved to 6.6% as of June 30, 2025, from 6.9% during the prior-year period, reflecting the overall improved credit quality and performance of our portfolio due to credit tightening and effective portfolio management.
General and Administrative Expenses.
Our general and administrative expenses increased $8.4 million, or 7.0%, to $129.0 million during the six months ended June 30, 2025, from $120.6 million during the prior-year period. The absolute dollar increase in general and administrative expenses is explained in greater detail below.
Personnel.
The largest component of general and administrative expenses was personnel expense, which increased $4.8 million, or 6.4%, to $79.7 million during the six months ended June 30, 2025, from $74.9 million during the prior-year period. The increase was primarily driven by an increase in labor costs of $3.8 million, including staffing 17 new branches since the prior-year period, and increased incentive costs of $1.9 million due to a change in expense timing. This increase was partially offset by higher capitalized loan origination costs, which reduce personnel expenses, of $1.3 million.
Occupancy.
Occupancy expenses increased $1.3 million, or 10.3%, to $13.8 million during the six months ended June 30, 2025, from $12.5 million during the prior-year period primarily due to increased rent expense of $1.0 million, inclusive of rent expenses associated with opening 17 new branches since the prior-year period.
Marketing.
Marketing expenses increased $1.3 million, or 14.4%, to $10.5 million during the six months ended June 30, 2025, from $9.2 million during the prior-year period due to increased activity in our direct mail campaigns of $1.1 million to support growth in our legacy and new branch markets, and increased digital marketing activity of $0.2 million.
Other Expenses.
Other expenses increased $1.0 million, or 4.1%, to $25.0 million during the six months ended June 30, 2025, from $24.0 million during the prior-year period. The increase was primarily due to increased collection expenses of $0.5 million and increased credit bureau fees of $0.4 million.
Operating Expense Ratio.
Our operating expense ratio decreased by 0.2% to 13.6% during the six months ended June 30, 2025, from 13.8% during the prior-year period.
Interest Expense.
Interest expense increased $4.8 million, or 13.7%, to $40.2 million during the six months ended June 30, 2025, from $35.4 million during the prior-year period. The increase was primarily due to an increase in our cost of funds as well as an increase in the average balance of our debt facilities. Our cost of funds increased 0.2% to 4.2% during the six months ended June 30, 2025, from 4.0% during the prior-year period. The average balance of our debt facilities increased to $1.5 billion during the six months ended June 30, 2025, from $1.4 billion during the prior-year period.
Income Taxes.
Income taxes decreased $2.0 million, or 26.7%, to $5.5 million during the six months ended June 30, 2025, from $7.5 million during the prior-year period. The decrease was primarily due to a $8.5 million decrease in income before income taxes compared to the prior-year period. Our effective tax rates were 24.3% and 24.1% for the six months ended June 30, 2025 and 2024, respectively.
Liquidity and Capital Resources
Our primary cash needs relate to the funding of our lending activities and, to a lesser extent, expenditures relating to improving our technology infrastructure and expanding and maintaining our branch locations. We have historically financed, and plan to continue to finance, our short-term and long-term operating liquidity and capital needs through a combination of cash flows from operations and borrowings under our debt facilities, including our senior revolving credit facility, revolving warehouse credit facilities, and asset-backed securitization transactions, all of which are described below. We continue to seek ways to diversify our funding sources. As of June 30, 2025, our funded debt-to-equity ratio was 4.2 to 1.0 and stockholders’ equity ratio was 18.5%, compared to 4.1 to 1.0 and 18.7%, respectively, as of December 31, 2024.
Cash and cash equivalents increased to $4.3 million as of June 30, 2025, from $4.0 million as of the prior year-end. We had immediate availability to draw down cash from our revolving credit facilities of $117.3 million and $132.9 million as of June 30, 2025 and the prior year-end, respectively. Our unused capacity on our revolving credit facilities (subject to the borrowing base) was $533.8 million and $466.2 million as of June 30, 2025, and the prior year-end, respectively. Our debt balance was $1.5 billion for both June 30, 2025 and the prior year-end.
Based upon anticipated cash flows, we believe that cash flows from operations and our various financing alternatives will provide sufficient financing for debt maturities and operations over the next twelve months, as well as into the future.
From time to time, we have extended the maturity date of and increased the borrowing limits under our senior revolving credit facility. While we have successfully obtained such extensions and increases in the past, there can be no assurance that we will be able to do so if and when needed in the future. As of June 30, 2025 the revolving period maturities of our securitizations and warehouse credit facilities (each as described below within “Financing Arrangements and Restricted Cash Reserve Accounts”) ranged from May 2026 to May 2027, with the exception of securitizations RMIT 2021-1 and RMIT 2022-1, for which the revolving periods ended in February 2024 and February 2025, respectively. We had not exercised our right to redeem the notes of either of these two securitizations as of June 30, 2025. There can be no assurance that we will be able to secure an extension of the warehouse credit facilities or close additional securitization transactions if and when needed in the future.
The Board may in its discretion declare and pay cash dividends on our common stock. The following table sets forth the dividends declared and paid for the six months ended June 30, 2025:
Period
Declaration Date
Record Date
Payment Date
Dividends Declared Per
Common Share
Dividends Paid
(in thousands)
1Q 25
February 5, 2025
February 20, 2025
March 13, 2025
$
0.30
$
3,152
2Q 25
April 30, 2025
May 21, 2025
June 11, 2025
0.30
2,843
Total
$
0.60
$
5,995
See Note 14, “Subsequent Events” of the Notes to Consolidated Financial Statements in Part I, Item 1, “Financial Statements,” for information regarding our cash dividend following the end of the quarter.
While we intend to pay our quarterly dividend for the foreseeable future, all subsequent dividends will be reviewed and declared at the discretion of the Board and will depend on many factors, including our financial condition, earnings, cash flows, capital requirements, level of indebtedness, statutory and contractual restrictions applicable to the payment of dividends, and other considerations that the Board deems relevant. Our dividend payments may change from time to time, and the Board may choose not to continue to declare dividends in the future.
In December 2024, we announced that the Board had authorized a $30.0 million stock repurchase program. The authorization was effective immediately and extends through December 31, 2026. As of June 30, 2025, we had repurchased 0.5 million shares of common stock under this plan at a total cost of $15.1 million, including commissions and estimated excise taxes.
Cash Flow.
Operating Activities.
Net cash provided by operating activities during the six months ended June 30, 2025 was $142.3 million, compared to $130.0 million during the prior-year period, a net increase of $12.4 million. The increase in net cash provided was primarily due to the growth of our loan portfolio.
Investing Activities.
Investing activities consist of originations and repayments of finance receivables, purchases of intangible assets, and purchases of property and equipment for new and existing branches. Net cash used in investing activities during the six months ended June 30, 2025 was $165.4 million, compared to $84.6 million during the prior-year period, a net increase in cash used of $80.8 million. The increase in net cash used was primarily driven by increased originations as we grow our loan portfolio, partially offset by increased repayments of finance receivables.
Financing Activities.
Financing activities consist of borrowings and payments on our outstanding indebtedness. Net cash provided by financing activities during the six months ended June 30, 2025 was $9.4 million, compared to $30.9 million used in financing activities during the prior-year period, a net increase in cash provided of $40.2 million. The net increase in cash provided was primarily due to an increase in the net advances on debt instruments of $52.0 million related to increased originations, partially offset by an increase in the repurchases of common stock of $11.5 million.
Financing Arrangements and Restricted Cash Reserve Accounts.
As of June 30, 2025, we had five credit facilities outstanding and, from time to time, we engage in the private offering and sale of asset-backed notes. As part of our overall funding strategy, we have transferred certain finance receivables to affiliated VIEs for asset-backed financing transactions. Our debt arrangements described below, other than our senior revolving credit facility, are issued by each of our RMR and RMIT SPEs, which are considered VIEs under GAAP. These debts are supported by the expected cash flows from the underlying collateralized finance receivables. Collections on these finance receivables are remitted to restricted cash collection accounts, which totaled $83.6 million and $117.1 million as of June 30, 2025 and December 31, 2024, respectively. Our debt arrangements also contain various debt covenants. We were in compliance with all such debt covenants as of June 30, 2025.
Revolving Credit Facilities.
The following is a summary of our revolving credit facilities as of June 30, 2025:
Dollars in thousands
Capacity
Debt Balance
Effective Interest Rate
Restricted Cash Reserves
Restricted Cash Collection
Maturity Date
Senior
$
355,000
$
165,526
7.4%
$
—
$
—
Sep 2025
RMR IV warehouse
$
125,000
$
11,981
6.6%
$
151
$
802
May 2027
RMR V warehouse
$
100,000
$
21,296
6.7%
$
132
$
1,700
Nov 2027
RMR VI warehouse
$
75,000
$
27,813
6.4%
$
184
$
2,307
Feb 2028
RMR VII warehouse
$
125,000
$
21,298
6.7%
$
139
$
1,794
Oct 2026
Securitizations.
The following is a summary of our securitizations as of June 30, 2025:
Dollars in thousands
Issue Amount
Debt Balance
Effective Interest Rate
Restricted Cash Reserves
Restricted Cash Collection
Revolving Period Maturity
Final Maturity Date
RMIT 2021-1
$
248,700
$
54,385
3.5%
$
2,604
$
5,848
Feb 2024
Mar 2031
RMIT 2021-2
$
200,000
$
200,192
2.3%
$
2,083
$
16,304
Jul 2026
Aug 2033
RMIT 2021-3
$
125,000
$
125,202
3.9%
$
1,471
$
15,675
Sep 2026
Oct 2033
RMIT 2022-1
$
250,000
$
177,511
3.8%
$
2,646
$
16,297
Feb 2025
Mar 2032
RMIT 2024-1
$
187,305
$
187,787
6.2%
$
1,078
$
7,224
May 2027
July 2036
RMIT 2024-2
$
250,000
$
250,557
5.3%
$
1,418
$
7,944
Nov 2026
Dec 2033
RMIT 2025-1
$
265,000
$
265,585
5.3%
$
1,489
$
7,668
Mar 2027
Apr 2034
RMC Reinsurance.
Our wholly owned subsidiary, RMC Reinsurance, Ltd., is required to maintain reserves against life insurance policies ceded to it, as determined by the ceding company. These reserves are comprised of restricted cash and restricted AFS investments, net of payables for purchased securities not yet settled. As of June 30, 2025, the reserves totaled $22.9 million.
Critical Accounting Policies and Estimates
Management’s discussion and analysis of financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with GAAP and conform to general practices within the consumer finance industry. The preparation of these financial statements requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and disclosure of contingent assets and liabilities for the periods indicated in the financial statements. Management bases estimates on historical experience and other assumptions it believes to be reasonable under the circumstances and evaluates these estimates on an ongoing basis. Actual results may differ from these estimates under different assumptions or conditions.
Allowance for Credit Losses.
The allowance for credit losses is based on historical credit experience, current conditions, and reasonable and supportable economic forecasts. The historical loss experience is adjusted for quantitative and qualitative factors that are not fully reflected in the historical data. In determining our estimate of expected credit losses, we evaluate information related to credit metrics, changes in our lending strategies and underwriting practices, and the current and forecasted direction of the economic and business environment. These metrics include, but are not limited to, loan portfolio mix and growth, unemployment, credit loss trends, delinquency trends, changes in underwriting, and operational risks.
We selected a PD / LGD model to estimate our base allowance for credit losses, in which the estimated loss is equal to the product of PD and LGD. Historical net finance receivables are tracked over the term of the pools to identify the incidences of loss (PDs) and the average severity of losses (LGDs).
To enhance the precision of the allowance for credit loss estimate, we evaluate our finance receivable portfolio on a pool basis and segment each pool of finance receivables with similar credit risk characteristics. As part of our evaluation, we consider loan portfolio characteristics such as product type, loan size, loan term, internal or external credit scores, delinquency status, geographical location, and vintage. Based on analysis of historical loss experience, we selected the following segmentation: product type, FICO score, and delinquency status.
As finance receivables are originated, provisions for credit losses are recorded in amounts sufficient to maintain an allowance for credit losses at an adequate level to provide for estimated losses over the contractual life of the finance receivables (considering the effect of prepayments). Subsequent changes to the contractual terms that are a result of re-underwriting are not included in the finance receivable’s contractual life (considering the effect of prepayments). We use our segmentation loss experience to forecast
expected credit losses. Historical information about losses generally provides a basis for the estimate of expected credit losses. We also consider the need to adjust historical information to reflect the extent to which current conditions differ from the conditions that existed for the period over which historical information was evaluated. These adjustments to historical loss information may be qualitative or quantitative in nature.
Macroeconomic forecasts are required for our allowance for credit loss model and require significant judgment and estimation uncertainty. We consider key economic factors, most notably unemployment rates, to incorporate into our estimate of the allowance for credit losses. We engaged a major rating service provider to assist with compiling a reasonable and supportable forecast which we use to support the adjustments of our historical loss experience.
Due to the judgment and uncertainty in estimating the expected credit losses, we may experience changes to the macroeconomic assumptions within our forecast, as well as changes to our credit loss performance outlook, both of which could lead to further changes in our allowance for credit losses, allowance as a percentage of net finance receivables, and provision for credit losses. Potential macroeconomic changes have created conditions that increase the level of uncertainty associated with our estimate of the amount and timing of future credit losses from our loan portfolio.
Macroeconomic Sensitivity.
To demonstrate the sensitivity of forecasting macroeconomic conditions, we stressed our macroeconomic model with 10% increased weighting towards slower near-term growth that would have increased our reserves as of June 30, 2025 by $2.0 million.
The macroeconomic scenarios are highly influenced by timing, severity, and duration of changes in the underlying economic factors. This makes it difficult to estimate how potential changes in economic factors affect the estimated credit losses. Therefore, this hypothetical analysis is not intended to represent our expectation of changes in our estimate of expected credit losses due to a change in the macroeconomic environment, nor does it consider management’s judgment of other quantitative and qualitative information which could increase or decrease the estimate.
ITEM 3.
QUANTITATIVE AND QUALITATI
VE DISCLOSURES ABOUT MARKET RISK.
Interest Rate Risk
Interest rate risk arises from the possibility that changes in interest rates will affect our results of operations and financial condition. We originate finance receivables either at prevailing market rates or at statutory limits. Our finance receivables are structured on a fixed-rate, fixed-term basis. Accordingly, subject to statutory limits, our ability to react to changes in prevailing market rates is dependent upon the speed at which our customers pay off or renew loans in our existing loan portfolio, which allows us to originate new loans at prevailing market rates. Because our large loans have longer maturities than our small loans and typically renew at a slower rate than our small loans, our reaction time to changes may be affected as our large loans change as a percentage of our portfolio.
We also are exposed to changes in interest rates as a result of certain borrowing activities. As of June 30, 2025, the interest rates on 84% of our debt (the securitizations) were fixed. We maintain liquidity and fund our business operations in part through variable-rate borrowings under a senior revolving credit facility and multiple revolving warehouse credit facilities. As of June 30, 2025, the balances and key terms of the credit facilities’ interest rate risk were as follows:
Revolving Credit Facility
Debt Balance
(in thousands)
Interest Payment Frequency
Floor
Margin
Rate Type
Effective Interest Rate
Senior
$
165,526
Monthly
0.5%
3.0%
1-month SOFR
7.4%
RMR IV warehouse
11,981
Monthly
—
2.3%
1-month SOFR
6.6%
RMR V warehouse
21,296
Monthly
—
2.1%
Conduit
6.7%
RMR VI warehouse
27,813
Monthly
—
2.1%
1-month SOFR
6.4%
RMR VII warehouse
21,298
Monthly
—
2.4%
1-month SOFR
6.7%
Total
$
247,914
Based on the underlying rates and the outstanding balances as of June 30, 2025, an increase of 100 basis points in the rates of our revolving credit facilities would result in approximately $2.5 million of increased interest expense on an annual basis, in the aggregate, under these borrowings.
The nature and amount of our debt may vary as a result of future business requirements, market conditions, and other factors.
Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2025. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
Based on the evaluation of our disclosure controls and procedures as of June 30, 2025, our chief executive officer and chief financial officer concluded that, as of such date, our disclosure controls and procedures were effective. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost–benefit relationship of possible controls and procedures.
Changes in Internal Control
There were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the period covered by this Quarterly Report on Form 10-Q that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
The Company is involved in various legal proceedings and related actions that have arisen in the ordinary course of its business that have not been fully adjudicated. The Company’s management does not believe that these matters, when ultimately concluded and determined, will have a material adverse effect on its financial condition, liquidity, or results of operations.
ITEM 1A.
RIS
K FACTORS.
There have been no material changes to our risk factors from those included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 other than the risk factor set forth in Part II, Item 1A, “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025. In addition to the other information set forth in this report and in our other reports and statements that we file with the SEC, you should carefully consider the factors discussed in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (which was filed with the SEC on February 21, 2025), which could materially affect our business, financial condition, and/or future operating results. The risks described in our Annual Report on Form 10-K are not the only risks facing our company. Additional risks and uncertainties not currently known to the Company or that the Company currently deems to be immaterial also may materially and adversely affect the Company’s business, financial condition, and/or operating results.
ITEM 2.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
The following table provides information regarding our share repurchase transactions (excluding both commissions and estimated excise taxes) during the three months ended June 30, 2025:
Issuer Purchases of Equity Securities
Period
Total Number of
Shares Purchased
Weighted-Average
Price Paid per Share
Total Number of Shares
Purchased as Part of
Publicly Announced
Program
Approximate Dollar
Value of Shares that
May Yet Be Purchased
Under the Program (1)
April 1, 2025 — April 30, 2025
164,692
$
30.36
164,692
$
15,000,010
May 1, 2025 — May 31, 2025
—
—
—
$
15,000,010
June 1, 2025 — June 30, 2025
—
—
—
$
15,000,010
Total
164,692
$
30.36
164,692
(1) On December 2, 2024, we announced that our Board had authorized the repurchase of up to $30.0 million of our outstanding shares of common stock. The authorization was effective immediately and extends through December 31, 2026.
ITEM 5.
OTHER
INFORMATION.
During the
three months ended June 30, 2025
,
none
of the Company’s officers or directors adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as such terms are defined in Item 408(a) of Regulation S-K.
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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
REGIONAL MANAGEMENT CORP.
Date: August 1, 2025
By:
/s/ Harpreet Rana
Harpreet Rana, Executive Vice President and
Chief Financial and Administrative Officer
(Principal Financial Officer and Duly Authorized Officer)
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