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What changed in Regional Management Corp.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Regional Management Corp.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+334 added−339 removedSource: 10-K (2025-02-21) vs 10-K (2024-02-22)

Top changes in Regional Management Corp.'s 2024 10-K

334 paragraphs added · 339 removed · 286 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

75 edited+6 added−14 removed99 unchanged
Biggest changeThe Servicemembers Civil Relief Act is designed to ease legal and financial burdens on military personnel and their families during active-duty status. We may be required to reduce interest rates on “pre-service” debts incurred by servicemembers, and we may be prohibited from pursuing certain forms of legal action against servicemembers, such as default judgments, during periods of active duty.
Biggest changeWe may be required to reduce interest rates on “pre-service” debts incurred by servicemembers, and we may be prohibited from pursuing certain forms of legal action against servicemembers, such as default judgments, during periods of active duty. • Military Lending Act. The Military Lending Act applies to active duty servicemembers and their covered dependents.
As we grow our business, we will remain vigilant in our management of general and administrative expenses, with the goal of decreasing such expenses as a percentage of average net finance receivables over time. Loan Products We offer small and large installment loans to our customers.
As we grow our business, we will remain vigilant in our management of general and administrative expenses, with the goal of decreasing such expenses as a percentage of average net finance receivables over time. Loan Products We offer large and small installment loans to our customers.
Credit accident and health insurance provides for the repayment of certain loan installments to the lender that come due during an insured’s period of income interruption resulting from disability from illness or injury.
Credit accident and health insurance provides for the repayment of certain loan installments to the lender that come due during an insured’s period of income interruption resulting from disability, illness, or injury.
We also require proof of insurance on any vehicles securing loans, and in select markets, we offer vehicle single interest insurance on vehicles used as collateral on small and large loans.
We also require proof of insurance on any vehicles securing loans, and in select markets, we offer vehicle single interest insurance on vehicles used as collateral on large and small loans.
The interest rates, fees and other charges, maximum principal amounts, and maturities for our loans vary from state to state, depending on the competitive environment and relevant laws and regulations. Small and large loans are originated by our branch network, by our centralized sales and service team, digitally through our consumer website, or through our convenience check direct mail campaigns.
The interest rates, fees and other charges, maximum principal amounts, and maturities for our loans vary from state to state, depending on the competitive environment and relevant laws and regulations. Large and small loans are originated by our branch network, by our centralized sales and service team, digitally through our consumer website, and through our convenience check direct mail campaigns.
This provides us with frequent in-person 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.
This model provides us with frequent in-person 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.
On March 7, 2023, the CFPB provided the Company with notice (the “ Notice ”) that it sought to establish supervisory authority over the Company pursuant to section 1024(a)(1)(C) of the Consumer Financial Protection Act of 2010.
On March 7, 2023, the CFPB provided the Company with Notice that it sought to establish supervisory authority over the Company pursuant to section 1024(a)(1)(C) of the Consumer Financial Protection Act of 2010.
If a customer is unable to make the required payments to bring his or her loan current, acceptable solutions to remedy a past due loan may include deferral of a payment, loan renewal, or settlement.
If a customer is unable to make the required payments to bring his or her loan current, acceptable solutions to remedy a past due loan may include deferral of a payment, loan modification, loan renewal, or settlement.
In the fourth quarter of 2023, approximately 83% (by dollar amount) of customer payments were made by debit card or ACH. If a loan becomes severely delinquent, a branch may receive co-collection assistance from our centralized servicing team or third-party collector. Our philosophy is to work with customers experiencing payment difficulties.
In the fourth quarter of 2024, approximately 83% (by dollar amount) of customer payments were made by debit card or ACH. If a loan becomes severely delinquent, a branch may receive co-collection assistance from our centralized servicing team or third-party collector. Our philosophy is to work with customers experiencing payment difficulties.
Consequently, we experience seasonal fluctuations in our operating results. However, changes in macroeconomic factors, including inflation, rising interest rates, and geopolitical conflict, have impacted our typical seasonal trends for loan volume and delinquency. Government Regulation Consumer finance companies are subject to extensive regulation, supervision, and licensing under various federal, state, and local statutes, regulations, and ordinances.
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. Government Regulation Consumer finance companies are subject to extensive regulation, supervision, and licensing under various federal, state, and local statutes, regulations, and ordinances.
Attractive Products for Customers with Limited Access to Credit. Our flexible loan products, generally ranging from $500 to $25,000 with terms of up to 60 months, are competitively priced, easy to understand, and incorporate features designed to meet the varied financial needs and credit profiles of a broad range of consumers.
Attractive Products for Customers with Limited Access to Credit. Our flexible loan products, generally ranging from $500 to $35,000 with terms of up to 60 months, are competitively priced, easy to understand, and incorporate features designed to meet the varied financial needs and credit profiles of a broad range of consumers.
Our branch network serves as the foundation of our omni-channel platform and the primary point of contact with our customers. Nearly 73% of our loan originations in 2023 were facilitated by one of our branch locations, and nearly all loans, regardless of origination channel, are serviced through our branches, allowing us to maintain frequent, in-person contact with our customers.
Our branch network serves as the foundation of our omni-channel platform and the primary point of contact with our customers. Nearly 73% of our loan originations in 2024 were facilitated by one of our branch locations, and nearly all loans, regardless of origination channel, are serviced through our branches, allowing us to maintain frequent, in-person contact with our customers.
Our Chief Executive Officer has over 30 years of experience in consumer financial services, our Chief Financial Officer has over 20 years of financial services experience, and our Chief Credit Risk Officer has 20 years of financial and consumer lending experience.
Our Chief Executive Officer has over 30 years of experience in consumer financial services, our Chief Financial and Administrative Officer has over 20 years of financial services experience, and our Chief Credit Risk Officer has over 20 years of financial and consumer lending experience.
A settlement is only used in certain limited cases and is only offered once we have determined that we are unlikely to collect the entire outstanding balance of the loan. For seriously delinquent accounts, we may seek legal judgments or pursue repossession of collateral.
A settlement or permanent loan modification is only used in certain limited cases and is only offered once we have determined that we are unlikely to collect the entire outstanding balance of the loan. For seriously delinquent accounts, we may seek legal judgments or pursue repossession of collateral.
As a result, our new branches opened between 2021 and 2023 have on average grown their net finance receivables and operating income contribution at a faster pace than branches opened prior to 2021.
As a result, our new branches opened between 2021 and 2024 have on average grown their net finance receivables and operating income contribution at a faster pace than branches opened prior to 2021.
As of December 31, 2023, we operated under the name “Regional Finance” online and in branch locations in 19 states across the United States, serving 538,400 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.
As of December 31, 2024, we operated under the name “Regional Finance” online and in branch locations in 19 states across the United States, serving 575,400 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.
These investments allow us to control the credit quality of our portfolio, maintain compliance with evolving state and federal law, and react quickly whenever market dynamics may change. We have also expanded our centralized collections department and provided our branches with improved collections tools, training, Regional Management Corp. | 2023 Annual Report on Form 10-K | 3 and incentives.
These investments allow us to control the credit quality of our portfolio, maintain compliance with evolving state and federal law, and react quickly whenever market dynamics may change. Regional Management Corp. | 2024 Annual Report on Form 10-K | 7 We have also expanded our centralized collections department and provided our branches with improved collections tools, training, and incentives.
In addition, we mail convenience checks in new markets as soon as new branches are open, which develops a customer base and builds finance receivables for these new branches.
In addition, we mail convenience checks in new markets as new branches open, which develops a customer base and builds finance receivables for these new branches.
The Company provides its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, and all amendments to those reports, free of charge on www.regionalmanagement.com , as soon as reasonably practicable after they are electronically filed with, or furnished to, the Securities and Exchange Commission. The Company’s consumer website is www.regionalfinance.com .
The Company provides its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, and all amendments to those reports, free of charge on www.regionalmanagement.com , as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC. The Company’s consumer website is www.regionalfinance.com .
Accordingly, the sum of branch contributions from all of our branches is greater than our income before taxes. Human Capital As of December 31, 2023, we had 2,081 employees. All of our employees are located within the United States, and none are covered by a collective bargaining agreement.
Accordingly, the sum of branch contributions from all of our branches is greater than our income before taxes. Human Capital As of December 31, 2024, we had 2,131 employees. All of our employees are located within the United States, and none are covered by a collective bargaining agreement.
As of December 31, 2023, our state operations vice presidents averaged nearly 30 years of industry experience and over 10 years of service at Regional, while our associate vice presidents and district supervisors averaged over 20 years of industry experience and nearly 10 years of service with Regional.
As of December 31, 2024, our state operations vice presidents averaged nearly 30 years of industry experience and over 11 years of service at Regional, while our associate vice presidents and district supervisors averaged over 20 years of industry experience and 10 years of service with Regional.
We calculate the average branch contribution as total revenues generated by the branch less the expenses directly attributable to the branch, including the provision for losses and operating expenses, such as personnel, lease, and interest expenses. General corporate overhead, including management salaries, is not attributed to any individual branch.
We calculate the average branch contribution as total revenues generated by the branch less the expenses directly attributable to the branch, including net credit losses and operating expenses, such as personnel, lease, and interest expenses. General corporate overhead, including management salaries, is not attributed to any individual branch.
The Company responded to the Notice by voluntarily consenting to the CFPB’s supervisory authority and entering into a Consent Agreement dated January 4, 2024 (the “ Consent Agreement ”). Pursuant to the Consent Agreement and related CFPB order, the CFPB will have supervisory authority over the Company for a period of two years ending January 8, 2026.
The Company responded to the Notice by voluntarily consenting to the CFPB’s supervisory authority and entering into a Consent Agreement. Pursuant to the Consent Agreement and related CFPB order, the CFPB will have supervisory authority over the Company for a period of two years ending January 8, 2026.
At December 31, 2019 2020 2021 2022 2023 Texas 27 % 29 % 31 % 33 % 32 % North Carolina 15 % 14 % 15 % 15 % 16 % South Carolina 19 % 18 % 15 % 12 % 11 % All Other States 39 % 39 % 39 % 40 % 41 % Total 100 % 100 % 100 % 100 % 100 % The following table sets forth the total number of large loans, total large loan finance receivables, and average size per loan by state as of December 31, 2023.
At December 31, 2020 2021 2022 2023 2024 Texas 29 % 31 % 33 % 32 % 32 % North Carolina 14 % 15 % 15 % 16 % 17 % South Carolina 18 % 15 % 12 % 11 % 10 % All Other States 39 % 39 % 40 % 41 % 41 % Total 100 % 100 % 100 % 100 % 100 % The following table sets forth the total number of large loans, total large loan finance receivables, and average size per loan by state as of December 31, 2024.
In 2023, 2022, and 2021, insurance income, net contributed $44.5 million, $43.5 million, and $35.5 million, respectively, to our total revenue. Through November 2022, we also offered indirect retail installment loans of up to $7,500.
In 2024, 2023, and 2022, insurance income, net contributed $40.7 million, $44.5 million, and $43.5 million, respectively, to our total revenue. Through November 2022, we also offered indirect retail installment loans of up to $7,500.
These efforts enabled us to maintain new digitally sourced volumes as a percentage of total new customer volumes at nearly 29% in 2023, compared to nearly 30% in 2022. In the future, we will continue our focus on the digital channel.
These efforts enabled us to maintain new digitally sourced volumes as a percentage of total new customer volumes at over 27% in 2024, compared to nearly 29% in 2023. In the future, we will continue our focus on the digital channel.
Our large loans are typically secured by non-essential household goods and/or a vehicle. As of December 31, 2023, we had 246,600 large loans outstanding representing $1.3 billion in finance receivables, or an average of approximately $5,200 per loan.
Our large loans are typically secured by non-essential household goods and/or a vehicle. As of December 31, 2024, we had 259,500 large loans outstanding representing $1.3 billion in finance receivables, or an average of approximately $5,200 per loan.
In addition, in select states, we offer home and auto club products that are administered and serviced through a third-party provider.
In addition, in select states, we offer club membership products that are administered and serviced through a third-party provider.
We ceased offering indirect retail installment loans in November 2022 to focus on growing our core loan portfolio, but we continue to own and service the loans that we previously originated. As of December 31, 2023, we had 2,500 retail loans outstanding representing $3.8 million in finance receivables, or an average of approximately $1,500 per loan.
We ceased offering indirect retail installment loans in November 2022 to focus on growing our core loan portfolio, but we continue to own and service the loans that we previously originated. As of December 31, 2024, we had 1,000 retail loans outstanding representing $1.1 million in finance receivables, or an average of approximately $1,100 per loan.
We believe that refinancing delinquent loans for certain deserving customers who have made periodic payments allows us to help customers resolve temporary financial setbacks and repair or sustain their credit. During 2023, we refinanced approximately $16.2 million of loans that were 60 or more days contractually past due, representing approximately 1.1% of our total loan originations in 2023.
We believe that refinancing delinquent loans for certain deserving customers who have made periodic payments allows us to help customers resolve temporary financial setbacks and repair or sustain their credit. During 2024, we refinanced approximately $12.7 million of loans that were 60 or more days contractually past due, representing approximately 0.8% of our total loan originations in 2024.
We also structure our loans on a fixed-rate, fixed-term basis with fully amortizing, equal monthly installment payments that are designed to be affordable for our customers and made over an average term of 23 months and 46 months for small and large loans, respectively (for loans originated in 2023).
We also structure our loans on a fixed-rate, fixed-term basis with fully amortizing, equal monthly installment payments that are designed to be affordable for our customers and made over a weighted-average term of 50 months and 26 months for large and small loans, respectively (for loans originated in 2024).
Nortridge logs and maintains, within our centralized information systems, a permanent record of the loan origination and servicing approvals and processes, and permits all levels of branch and centralized management to review the individual and collective performance of all branches for which they are responsible on a daily basis.
Nortridge logs and maintains, within our centralized information systems, a permanent record of the loan origination and servicing approvals and processes and permits all Regional Management Corp. | 2024 Annual Report on Form 10-K | 13 levels of branch and centralized management to review the individual and collective performance of all branches for which they are responsible on a daily basis.
We began building our branch network over 30 years ago and have expanded the network to 346 branches in 19 states as of December 31, 2023.
We began building our branch network over 35 years ago and have expanded the network to 344 branches in 19 states as of December 31, 2024.
In 2023, the average originated principal balance and term for our small loans were $2,091 and 23 months, respectively. The average yield we earned on our portfolio of small loans was 35.6% in 2023. The following table sets forth the distribution of our small loan finance receivable portfolio by state as of the dates indicated.
In 2024, our average originated principal balance and weighted-average term for small loans were $2,144 and 26 months, respectively. The average interest and fee yield we earned on our portfolio of small loans was 37.6% in 2024. The following table sets forth the distribution of our small loan finance receivable portfolio by state as of the dates indicated.
In 2022, we introduced our next generation custom credit model, a new proprietary model that we expect will provide significant advancements in underwriting capabilities by utilizing sophisticated modeling algorithms that leverage new alternative data sources to drive more predictable outcomes and make better credit decisions at the margin.
Our loan origination and servicing software platform allows us to automate our underwriting decisions, and in 2022, we introduced our next generation custom credit model, a new proprietary model that provides significant advancements in underwriting capabilities by utilizing sophisticated modeling algorithms that leverage new alternative data sources to drive more predictable outcomes and make better credit decisions at the margin.
We are prohibited from charging a borrower covered under the Military Lending Act more than a 36% Military Annual Percentage Rate, which includes certain costs associated with the loan in calculating the rate. • Gramm-Leach-Bliley Act.
We are prohibited from charging a borrower covered under the Military Lending Act more than a 36% Military Annual Percentage Rate, which includes certain costs associated with the loan in calculating the rate. Regional Management Corp. | 2024 Annual Report on Form 10-K | 15 • Gramm-Leach-Bliley Act.
Renewals typically refinance one or more of a customer’s loans into a single new loan, which in some Regional Management Corp. | 2023 Annual Report on Form 10-K | 5 cases will be for a larger principal balance than the customer’s original loan, though we permit renewals of existing loans at or below the original loan amount.
Renewals typically refinance one or more of a customer’s loans into a single new loan, which in some cases will be for a larger principal balance than the customer’s original loan, though we permit renewals of existing loans at or below the original loan amount.
Our core products are small and large installment loans. As a complement to our loan products, we offer our customers optional payment and collateral protection insurance. • Small Loans – We offer small installment loans with cash proceeds to customers ranging from $500 to $2,500, with terms of up to 48 months.
Our core products are large and small installment loans. As a complement to our loan products, we offer our customers optional payment and collateral protection insurance. • Large Loans – We offer large installment loans with cash proceeds to customers ranging from $2,501 to $35,000, with terms between 18 and 60 months.
Our loans are also safer and more favorably structured than loans offered by alternative financial service providers. We underwrite our loans based on an applicant’s ability to repay, whereas payday, pawn, and title loans are typically underwritten based on an ability to collect, either through access to the borrower’s bank account or by repossession and sale of collateral.
We underwrite our loans based on an applicant’s ability to repay, whereas payday, pawn, and title loans are typically underwritten based on an ability to collect, either through access to the borrower’s bank account or by repossession and sale of collateral.
We plan to expand the testing of our digital origination product and channel to new geographies and improve the customer experience. We also expect to complete enhancements to our customer portal and mobile app, allowing our customers easy access to payment functionality and additional Regional Management Corp. | 2023 Annual Report on Form 10-K | 4 features.
We plan to expand the testing of our digital origination product and channel to new geographies and improve the customer experience. We also expect to complete enhancements to our customer portal and mobile app, allowing our customers easy access to payment functionality and additional features.
We exist to serve that purpose, and accordingly, we offer our customers access to credit through our affordable, easy-to-understand small and large loan products, which we price on fair terms in consideration of the associated credit risk and servicing costs. The average annual percentage rate (“ APR ”) of our small loans originated in 2023 was 45.2%.
We exist to serve that purpose, and accordingly, we offer our customers access to credit through our affordable, easy-to-understand large and small loan products, which we price on fair terms in consideration of the associated credit risk and servicing costs.
At December 31, 2019 2020 2021 2022 2023 Texas 39 % 37 % 35 % 33 % 30 % North Carolina 15 % 17 % 16 % 16 % 13 % Alabama 11 % 11 % 10 % 10 % 10 % All Other States 35 % 35 % 39 % 41 % 47 % Total 100 % 100 % 100 % 100 % 100 % The following table sets forth the total number of small loans, total small loan finance receivables, and average size per loan by state as of December 31, 2023.
At December 31, 2020 2021 2022 2023 2024 Texas 37 % 35 % 33 % 30 % 27 % North Carolina 17 % 16 % 16 % 13 % 13 % All Other States 46 % 49 % 51 % 57 % 60 % Total 100 % 100 % 100 % 100 % 100 % The following table sets forth the total number of small loans, total small loan finance receivables, and average size per loan by state as of December 31, 2024.
In evaluating a loan for renewal, in addition to our standard underwriting requirements, we are able to take into consideration the customer’s prior payment performance with us, which we believe is a very strong indicator of the customer’s future credit performance. Small Loans.
In evaluating a loan for renewal, in addition to our standard underwriting requirements, we are able to take into consideration the customer’s prior payment performance with us, which we believe is a very strong indicator of the customer’s future credit performance. Regional Management Corp. | 2024 Annual Report on Form 10-K | 9 Large Loans.
The Dodd-Frank Act established the Consumer Financial Protection Bureau (the “ CFPB ”), which has regulatory, supervisory, and enforcement powers over providers of consumer financial products and services, including explicit supervisory authority to examine and require registration of non-depository lenders and to promulgate rules that can affect the practices and activities of lenders.
The Dodd-Frank Act established the CFPB, which has regulatory, supervisory, and enforcement powers over providers of consumer financial products and services, Regional Management Corp. | 2024 Annual Report on Form 10-K | 14 including explicit supervisory authority to examine and require registration of non-depository lenders and to promulgate rules that can affect the practices and activities of lenders.
As of the end of 2023, this product represented $134.5 million in total portfolio. In the future, we will continue to assess new credit and non-credit products and services and expand the channels and partnerships through which we acquire customers. Maintain Sound Underwriting and Credit Control. We have invested heavily in our credit and collections functions.
In the future, we will continue to assess new credit and non-credit products and services and expand the channels and partnerships through which we acquire customers. Maintain Sound Underwriting and Credit Control. We have invested heavily in our credit and collections functions.
Credit life insurance provides for the payment in full of the borrower’s credit obligation to the lender in the event of the borrower’s death and, in some states, may provide a payment to a secondary beneficiary listed by the borrower.
Regional Management Corp. | 2024 Annual Report on Form 10-K | 10 Generally, credit life insurance provides for the payment in full of the borrower’s credit obligation to the lender in the event of the borrower’s death and, in some states, may provide a payment to a secondary beneficiary listed by the borrower.
In the past, customers have generally been limited to two deferrals of their monthly payment in a rolling twelve-month period unless it was determined that an exception was warranted (e.g. due to a natural disaster, pandemic, or other macroeconomic stressors).
Customers are generally limited to three deferrals of their monthly payment in a rolling twelve-month period unless it is determined that an exception is warranted (e.g. due to a natural disaster or pandemic).
In 2023, 2022, and 2021, interest and fee income from large loans contributed $323.9 million, $288.5 million, and $229.9 million, respectively, to our total revenue. • Optional Payment and Collateral Protection Insurance Products – We offer our customers optional payment and collateral protection insurance relating to our loan products, including credit life insurance, accident and health insurance, involuntary unemployment insurance, and personal property insurance.
In 2024, 2023, and 2022, interest and fee income from small loans contributed $190.8 million, $164.7 million, and $160.4 million, respectively, to our total revenue. • Optional Payment and Collateral Protection Insurance Products – We offer our customers optional payment and collateral protection insurance relating to our loan products, including credit life insurance, accident and health insurance, involuntary unemployment insurance, and personal property insurance.
For example, in 2023, we worked with many of our deserving customers to refinance nearly 24,000 of our customers’ small loans into large loans, representing $133.6 million in finance receivables at origination, and resulting in a decrease in these customers’ average APR from 41.8% to 30.3%.
For example, in 2024, we worked with many of our deserving customers to refinance over 25,000 of our customers’ small loans into large loans, representing $147.8 million in finance receivables at origination, and resulting in a decrease in these customers’ average APR from 42.8% to 31.1%.
As a result of this strategy, the net finance receivables per branch and the average branch operating income contribution of branches open one to three years exceed that of branches open three to five years in the tables above.
As a result of this strategy, the net finance receivables per branch of branches open one to three years exceed that of branches open more than three years in the table above.
As of December 31, 2023, the outstanding balance of such refinanced loans was $14.6 million, or 0.8% of finance receivables as of such date. We may also agree to settle a past-due loan by accepting less than the full principal balance owed.
As of December 31, 2024, the outstanding balance of such refinanced loans was $11.1 million, or 0.6% of finance receivables as of such date. We may also agree to settle or permanently modify a past-due loan by accepting less than the full principal balance owed, either in a lump sum or over an established term.
We anticipate that as our newer branches mature, their revenue will grow faster than our overall same-store revenue growth rate. We believe there is sufficient demand for consumer finance services to continue new branch openings in certain of the states where we currently operate, allowing us to capitalize on our existing infrastructure and experience in these markets.
We believe there is sufficient demand for consumer finance services to continue new branch openings in certain of the states where we currently operate, allowing us to capitalize on our existing infrastructure and experience in these markets.
The training includes a blended approach utilizing eLearning modules, hands-on exercises, webinars, and assessments. Training content is focused on our operating policies and procedures, as well as several key compliance areas.
The training includes a blended approach utilizing eLearning modules, hands-on exercises, webinars, and assessments. Training content is focused on our operating policies and procedures, as well as several key compliance areas. Incentive compensation for new employees is contingent upon the successful and timely completion of the required new hire training curriculum.
We intend to continue to enhance the Nortridge platform to further leverage its capabilities and to meet our evolving needs. Competition The consumer finance industry is highly fragmented, with numerous competitors.
We intend to continue to enhance the Nortridge platform to further leverage its capabilities and to meet our evolving needs. In addition, we will continue to invest in other software platforms that integrate with Nortridge and are expected to improve our origination and servicing capabilities. Competition The consumer finance industry is highly fragmented, with numerous competitors.
Our small loans are typically secured by non-essential household goods and/or, to a lesser extent, a lien on a vehicle, which may be an automobile, motorcycle, boat, or all-terrain vehicle. As of December 31, 2023, we had 289,300 small loans outstanding representing $493.5 million in finance receivables, or an average of approximately $1,700 per loan.
Our small loans are typically secured by non-essential household goods and/or, to a lesser extent, a lien on a vehicle. As of December 31, 2024, we had 314,900 small loans outstanding representing $554.7 million in finance receivables, or an average of approximately $1,800 per loan.
The Nortridge custom decision engine utilizes application information and a credit report detailing the applicant’s credit history to generate an initial credit decision and to guide our branch employees through the loan origination process to the final credit decision.
We have invested in customizing the Nortridge platform to meet our needs based upon our specific products, processes, and reporting requirements. The Nortridge custom decision engine utilizes application information and a credit report detailing the applicant’s credit history to generate an initial credit decision and to guide our branch employees through the loan origination process to the final credit decision.
Regional Management Corp. | 2023 Annual Report on Form 10-K | 7 The following table sets forth the net finance receivables per branch based on maturity: Age of Branch (As of December 31, 2023) Net Finance Receivables Per Branch as of December 31, 2023 Percentage Increase From Prior Age Category Number of Branches (In thousands) Branches open less than one year $ 3,621 — 6 Branches open one to three years $ 5,782 59.7 % 35 Branches open three to five years $ 3,377 (41.6 )% 23 Branches open five years or more $ 5,212 54.3 % 282 All branches $ 5,120 346 The following table sets forth the average operating income contribution per branch for the year ended December 31, 2023, based on maturity of the branch.
Regional Management Corp. | 2024 Annual Report on Form 10-K | 11 The following table sets forth the net finance receivables per branch based on maturity: Age of Branch (As of December 31, 2024) Net Finance Receivables Per Branch as of December 31, 2024 Percentage Increase From Prior Age Category Number of Branches (In thousands) Branches open less than one year $ 1,755 — 7 Branches open one to three years $ 7,419 322.7 % 22 Branches open three to five years $ 5,582 (24.8 )% 28 Branches open five years or more $ 5,438 (2.6 )% 287 Total $ 5,502 344 The following table sets forth the average operating income contribution per branch for the year ended December 31, 2024, based on maturity of the branch.
Deceased borrower accounts are charged off in the month following the proper notification of passing, with the exception of borrowers with credit life insurance. We sell most of our charged-off accounts to third-party debt buyers.
Deceased borrower accounts are charged off in the month following the proper notification of passing, with the exception of borrowers with credit life insurance. We sell most of our charged-off accounts to third-party debt buyers. Information Technology We utilize a loan origination and servicing platform offered by Nortridge both to originate loans and to service our loan portfolio.
We believe that the rates on our products are significantly Regional Management Corp. | 2023 Annual Report on Form 10-K | 2 more attractive than many other credit options available to our customers, such as payday, pawn, and title loans, which often come with APRs over 300%.
We believe that the rates on our products are significantly more attractive than many other credit options available to our customers, such as payday, pawn, and title loans, which often come with APRs over 300%. Our loans are also safer and more favorably structured than loans offered by alternative financial service providers.
At the federal level, Congress enacted comprehensive financial regulatory reform legislation in 2010. A significant focus of the law, known as the Dodd-Frank Act, is heightened consumer protection.
Our captive insurance subsidiary is regulated by the insurance authorities of the Turks and Caicos Islands of the British West Indies, where the subsidiary is organized and domiciled. Dodd-Frank Act. At the federal level, Congress enacted comprehensive financial regulatory reform legislation in 2010. A significant focus of the law, known as the Dodd-Frank Act, is heightened consumer protection.
The average yield we earned on our portfolio of large loans was 26.1% for 2023. The following table sets forth the distribution of our large loan finance receivable portfolio by state as of the dates indicated.
In 2024, our average originated principal balance and weighted-average term for large loans were $6,001 and 50 months, respectively. The average interest and fee yield we earned on our portfolio of large loans was 26.4% for 2024. The following table sets forth the distribution of our large loan finance receivable portfolio by state as of the dates indicated.
In 2023, 2022, and 2021, interest and fee income from small loans contributed $164.7 million, $160.4 million, and $150.6 million, respectively, to our total revenue. • Large Loans – We offer large installment loans with cash proceeds to customers ranging from $2,501 to $25,000, with terms between 18 and 60 months.
In 2024, 2023, and 2022, interest and fee income from large loans contributed $337.7 million, $323.9 million, and $288.5 million, respectively, to our total revenue. • Small Loans – We offer small installment loans with cash proceeds to customers ranging from $500 to $2,500, with terms of up to 48 months.
Age of Branch (As of December 31, 2023) Average Branch Operating Income Contribution Percentage Increase From Prior Age Category Number of Branches (In thousands) Branches open less than one year $ (220 ) — 6 Branches open one to three years $ 195 188.6 % 35 Branches open three to five years $ 194 (0.5 )% 23 Branches open five years or more $ 497 156.2 % 282 All branches $ 434 346 Historically, net finance receivables per branch and average branch operating income contribution have increased as our branches mature.
Age of Branch (As of December 31, 2024) Average Branch Operating Income Contribution Percentage Increase From Prior Age Category Number of Branches (In thousands) Branches open less than one year $ 9 — 7 Branches open one to three years $ 126 1,300.0 % 22 Branches open three to five years $ 290 130.2 % 28 Branches open five years or more $ 647 123.1 % 287 Total $ 572 344 Historically, net finance receivables per branch and average branch operating income contribution have increased as our branches mature.
Our large loans, which are reserved for higher credit quality customers who meet more stringent underwriting requirements than those applied to small loan applicants, had an average APR of 29.7% for loans originated in 2023.
The weighted-average APR of our large loans, which are reserved for higher credit quality customers who meet more stringent underwriting requirements than those applied to small loan applicants, was 30.9% for loans originated in 2024. The Regional Management Corp. | 2024 Annual Report on Form 10-K | 6 weighted-average APR of our small loans originated in 2024 was 45.2%.
Our portfolio growth has come from expanding our geographic presence, growing our finance receivable portfolios within existing branches, and developing new products and channels, including through digital lead generation.
This receivables growth has driven a revenue increase of 65.4%, from $355.7 million in 2019 to $588.5 million in 2024, a CAGR of 10.6%. Our portfolio growth has come from expanding our geographic presence, growing our finance receivable portfolios within existing branches, and developing new products and channels, including through digital lead generation.
While the economic environment has challenged our customers and stressed our portfolio credit performance in recent years, we believe that our customers and business model have remained resilient. Demonstrated Organic Growth.
While the economic environment has challenged our customers and stressed our portfolio credit performance in recent years, we believe that our customers and business model have remained resilient. Demonstrated Organic Growth. We have grown our total finance receivables by 67.0%, from $1.1 billion at December 31, 2019 to $1.9 billion at December 31, 2024, a CAGR of 10.8%.
However, during that time, we also remained keenly focused on driving operating leverage through the prudent management of our expenses. Between 2018 and 2023, our operating expense ratio (annualized general and administrative expenses as a percentage of average net finance receivables) decreased from 16.1% to 14.2%.
However, during that time, we also remained keenly focused on driving operating leverage through the prudent management of our expenses. Between 2019 and 2024, our operating expense ratio decreased from 15.6% to 13.8%.
The information contained on our corporate responsibility website is not and should not be viewed as being incorporated by reference into this Annual Report on Form 10-K. Payment and Loan Servicing We have implemented company-wide payment and loan servicing policies and procedures, which are designed to maintain consistent portfolio performance and ensure regulatory compliance.
Regional Management Corp. | 2024 Annual Report on Form 10-K | 12 Payment and Loan Servicing We have implemented company-wide payment and loan servicing policies and procedures, which are designed to maintain consistent portfolio performance and ensure regulatory compliance.
We believe that there remains substantial opportunity to grow the finance receivable portfolios of our existing branches by continuing our focus on large loan originations and by cross-selling new loan products to our existing customers. During 2022, we expanded into Mississippi, Indiana, California, Louisiana, and Idaho, and we further expanded into Arizona during 2023.
We believe that there remains substantial opportunity to grow the finance receivable portfolios of our existing branches. During 2022, we expanded into Mississippi, Indiana, California, Louisiana, and Idaho, and we further expanded into Arizona during 2023. We anticipate that as our newer branches mature, their revenue will grow faster than our overall same-store revenue growth rate.
We believe that an emphasis on DE&I drives value for our employees, customers, and stockholders, and that our DE&I commitment enables us to better serve our communities. We also offer our employees a variety of training and development opportunities. New employees complete a comprehensive training curriculum that focuses on the company- and position-specific competencies needed to be successful.
We are also committed to fostering, cultivating, and preserving a strong culture and inclusive work environment. We also offer our employees a variety of training and development opportunities. New employees complete a comprehensive training curriculum that focuses on the company- and position-specific competencies needed to be successful.
Over time, we intend to improve our existing product offerings, to introduce new products and services, and to capture customers through new channels and partnerships. For example, in 2020, we introduced an enhanced auto-secured large loan product, through which we offer larger auto-secured loans to some of our highest credit quality customers.
Over time, we intend to improve our existing product offerings, to introduce new products and services, and to capture customers through new channels and partnerships.
Number of Loans Net Finance Receivables Average Size Per Loan (In thousands) Texas 71,560 $ 409,998 $ 5,729 North Carolina 43,304 209,490 4,838 South Carolina 25,938 136,713 5,271 All Other States 105,797 517,936 4,896 Total 246,599 $ 1,274,137 $ 5,167 Insurance and Ancillary Products We also offer our customers various optional payment and collateral protection insurance products as a complement to our lending operations.
Number of Loans Net Finance Receivables Average Size Per Loan (In thousands) Texas 82,177 $ 148,095 $ 1,802 North Carolina 39,549 71,155 1,799 All Other States 193,149 335,436 1,737 Total 314,875 $ 554,686 $ 1,762 Insurance and Ancillary Products We also offer our customers various optional payment and collateral protection insurance products as a complement to our lending operations.
Our insurance products, including the types of products offered and their terms and Regional Management Corp. | 2023 Annual Report on Form 10-K | 6 conditions, vary from state to state in compliance with applicable laws and regulations.
Our insurance products, including the types of products offered and their terms and conditions, vary from state to state in compliance with applicable laws and regulations. Insurance policy premiums, claims, and expenses are included in our results of operations as insurance income, net in the consolidated statements of comprehensive income.
Experienced Management Team. Our executive and senior operations management teams consist of individuals experienced in installment lending and other consumer finance services.
Since 2018, we have entered 10 new states and have introduced new technologies and marketing strategies to enable remote loan closings and to extend the geographic reach of our branches. Experienced Management Team. Our executive and senior operations management teams consist of individuals experienced in installment lending and other consumer finance services.
Additional management and developmental training is provided for those employees seeking to advance within our company. For additional information on the ways that we seek to empower our employees, please visit our corporate responsibility website at www.regionalfinance.com/corporate-responsibility .
All current employees are also required to complete quarterly compliance training and re-certification. Additional management and developmental training is provided for those employees seeking to advance within our company.
Removed
We have grown our total finance receivables by 86.2%, from $951.2 million at December 31, 2018 to $1.8 billion at December 31, 2023, a compound annual growth rate (“ CAGR ”) of 13.2%.
Added
For example, in 2020, we introduced Regional Management Corp. | 2024 Annual Report on Form 10-K | 8 an enhanced auto-secured large loan product, through which we offer larger auto-secured loans to some of our highest credit quality customers. As of the end of 2024, auto-secured loans represented $206.6 million, or 10.9% of our total portfolio.
Removed
More importantly, we have grown our small loan and large loan finance receivables by 92.0%, from $920.8 million at December 31, 2018 to $1.8 billion at December 31, 2023, a CAGR of 13.9%. This receivables growth has driven a revenue increase of 79.8%, from $306.7 million in 2018 to $551.4 million in 2023, a CAGR of 12.4%.
Added
In addition, in 2023 and 2024, we began to increase our marketing investment in our higher-margin small loan product, part of our barbell strategy of growing our higher-margin small loan accounts and our higher-quality auto-secured accounts.
Removed
Between 2018 and 2023, we entered ten new states, and since 2020, we have introduced new technologies and marketing strategies to enable remote loan closings and to extend the geographic reach of our branches. Historically, our branches have rapidly increased their outstanding finance receivables during the early years of operations and generally achieved profitability within 18 months of opening.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

105 edited+18 added−19 removed295 unchanged
Biggest changeElevated inflation and interest rates, as well as changing U.S. consumer spending patterns are contributing to this change and uncertainty. Inflation hit a 40-year high in June 2022 at 9.1%. While the U.S. annual inflation rate was 3.4% for the twelve months ended December 31, 2023, inflation remains above the Federal Reserve Board's target of 2.0%.
Biggest changeWhile the U.S. annual inflation rate was 2.9% for the twelve months ended December 31, 2024, inflation remains above the Federal Reserve Board's target of 2.0%. The Federal Reserve Board has increased rates materially in 2022 and 2023 in an effort to combat elevated inflation and began to lower interest rates in 2024 in response to moderating inflation.
Any material adverse change in the effectiveness of our underwriting models, our implementation of such models (including through our loan origination software and processes), or the ability or willingness of a significant portion of our borrowers to meet their obligations to us, whether due to changes in general economic, political, or social conditions, the cost of consumer goods, interest rates, natural disasters, military conflict or acts of war or terrorism, a prolonged public health crisis, epidemic, or pandemic, or other causes over which we have no control, or to changes or events affecting our borrowers such as unemployment, major medical expenses, bankruptcy, divorce, or death, would have a material adverse impact on our earnings and financial condition.
Any material adverse change in the effectiveness of our underwriting models, our implementation of such models (including through our loan origination software and processes), or the ability or willingness of a significant portion of our borrowers to meet their obligations to us, whether due to changes in general economic, political, or social conditions, the cost of consumer goods, interest rates, natural disasters, geopolitical or military conflict, acts of war or terrorism, a prolonged public health crisis, epidemic, or pandemic, or other causes over which we have no control, or to changes or events affecting our borrowers such as unemployment, major medical expenses, bankruptcy, divorce, or death, would have a material adverse impact on our earnings and financial condition.
Similarly, given the “decentralized” and largely manual processing of a significant portion of payment on our loans, the possibility of delay or misdirection of payments is greater than with payments through lockboxes or electronic channels. The ability of our customers to make in-branch payments and any future inability to make in-branch payments may result in additional risks.
Similarly, given the “decentralized” and largely manual processing of a portion of payment on our loans, the possibility of delay or misdirection of payments is greater than with payments through lockboxes or electronic channels. The ability of our customers to make in-branch payments and any future inability to make in-branch payments may result in additional risks.
AWS, Microsoft Azure, and VMWare also possess broad discretion to interpret and change their terms of services and other policies that apply to us, which may be unfavorable to our business. Our technology platforms may not meet expectations, and we may not be able to make technological improvements as quickly as some of our competitors.
AWS and Microsoft Azure also possess broad discretion to interpret and change their terms of services and other policies that apply to us, which may be unfavorable to our business. Our technology platforms may not meet expectations, and we may not be able to make technological improvements as quickly as some of our competitors.
Our computer systems, software, and networks may be vulnerable to breaches (including via computer hackings), unauthorized access, misuse, computer viruses, malware, phishing, employee error or malfeasance, or other failures or disruptions that could result in disruption to our business or the loss or theft of confidential information, including customer, employee, and business information.
Our computer systems, software, and networks may be vulnerable to breaches (including via computer hackings), unauthorized access, misuse, computer viruses, malware or ransomware, phishing, employee error or malfeasance, or other failures or disruptions that could result in disruption to our business or the loss or theft of confidential information, including customer, employee, and business information.
There are several risks associated with the use or origination of convenience checks, including the following: • it is more difficult to maintain sound underwriting standards with convenience check customers who historically have presented a higher risk of default than customers that originate loans in our branches, as we do not meet convenience check customers prior to soliciting them and extending a loan to them, and we may not be able to verify certain elements of their financial condition, including their current employment status, income, or life circumstances; • we rely on credit information from a third-party credit bureau that is more limited than a full credit report to pre-screen potential convenience check recipients, which may not be as effective as a full credit report or may be inaccurate or outdated; Regional Management Corp. | 2023 Annual Report on Form 10-K | 14 • we face limitations on the number of potential borrowers who meet our lending criteria within proximity to our branches; • we may not be able to continue to access the demographic and credit file information that we use to generate our mailing lists due to expanded regulatory or privacy restrictions; • convenience checks pose a risk of fraud; • any failure by the bank that issues and processes our convenience checks to properly process the convenience checks could limit the ability of a recipient to cash the check and enter into a loan with us; • customers may opt out of direct mail solicitations and solicitations based on their credit file or may otherwise prohibit us from soliciting them; • postal rates and production costs may continue to rise; • potential changes in federal or state laws may prohibit the practice of directly mailing convenience checks to potential borrowers; and • the bank that issues our convenience checks may exit the business, and we may be unable to find a replacement issuer bank.
There are several risks associated with the use or origination of convenience checks, including the following: • it is more difficult to maintain sound underwriting standards with convenience check customers who historically have presented a higher risk of default than customers that originate loans in our branches, as we do not meet convenience check customers prior to soliciting them and extending a loan to them, and we may not be able to verify certain elements of their financial condition, including their current employment status, income, or life circumstances; Regional Management Corp. | 2024 Annual Report on Form 10-K | 18 • we rely on credit information from a third-party credit bureau that is more limited than a full credit report to pre-screen potential convenience check recipients, which may not be as effective as a full credit report or may be inaccurate or outdated; • we face limitations on the number of potential borrowers who meet our lending criteria within proximity to our branches; • we may not be able to continue to access the demographic and credit file information that we use to generate our mailing lists due to expanded regulatory or privacy restrictions; • convenience checks pose a risk of fraud; • any failure by the bank that issues and processes our convenience checks to properly process the convenience checks could limit the ability of a recipient to cash the check and enter into a loan with us; • customers may opt out of direct mail solicitations and solicitations based on their credit file or may otherwise prohibit us from soliciting them; • postal rates and production costs may continue to rise; • potential changes in federal or state laws may prohibit the practice of directly mailing convenience checks to potential borrowers; and • the bank that issues our convenience checks may exit the business, and we may be unable to find a replacement issuer bank.
Any disruption of or interference with our use of AWS, Microsoft Azure, or VMWare products and services would negatively impact our operations and our business would be adversely affected. If our branches or customers encounter difficulties in accessing or are unable to access our platform, we may lose customers and revenue.
Any disruption of or interference with our use of AWS or Microsoft Azure products and services would negatively impact our operations and our business would be adversely affected. If our branches or customers encounter difficulties in accessing or are unable to access our platform, we may lose customers and revenue.
The United States currently faces a pronounced labor shortage. Our business relies on branch and headquarters personnel to oversee the initiation, review, and servicing of our loan products. Without sufficient staffing, our core business functions could be interrupted, which could affect our results of operations.
The United States currently faces a labor shortage. Our business relies on branch and headquarters personnel to oversee the initiation, review, and servicing of our loan products. Without sufficient staffing, our core business functions could be interrupted, which could affect our results of operations.
Due to the nature of the AWS, Microsoft Azure, and VMWare products and services provided, we are unable to easily transition from these vendors to other providers, and any such transition could require business downtime that could negatively impact our business.
Due to the nature of the AWS and Microsoft Azure products and services provided, we are unable to easily transition from these vendors to other providers, and any such transition could require business downtime that could negatively impact our business.
These risks are discussed in greater detail below, and include, but are not limited to, risks related to: Risks related to our business and operations • Managing our growth effectively, implementing our growth strategy, and opening new branches as planned; • Our convenience check strategy; • Our policies and procedures for underwriting, processing, and servicing loans; • Our ability to collect on our loan portfolio; • Our insurance operations; • Exposure to credit risk and repayment risk, which risks may increase in light of adverse or recessionary economic conditions; • The implementation of evolving underwriting models and processes, including as to the effectiveness of our custom scorecards; • Changes in the competitive environment in which we operate or a decrease in the demand for our products; • Geographic concentration of our loan portfolio; Regional Management Corp. | 2023 Annual Report on Form 10-K | 12 • Failure of third-party service providers, including those providing information technology products; • Changes in economic conditions in the markets we serve, including levels of unemployment and bankruptcies; • Our ability to achieve successful acquisitions and strategic alliances; • Our ability to make technological improvements as quickly as our competitors; • Security breaches, cyber-attacks, failures in our information systems, or fraudulent activity; • Our ability to originate loans; • Our reliance on information technology resources and providers, including the risk of prolonged system outages; • Changes in current revenue and expense trends, including trends affecting delinquencies and credit losses; • Any future public health crises (including the resurgence of COVID-19), including the impact of such crisis on our operations and financial condition; • Changes in operating and administrative expenses; • The departure, transition, or replacement of key personnel; • Our ability to identify and hire qualified personnel; • Our ability to timely and effectively implement, transition to, and maintain the necessary information technology systems, infrastructure, processes, and controls to support our operations and initiatives; • Changes in interest rates; • Existing sources of liquidity become insufficient or access to these sources becomes unexpectedly restricted; and • Exposure to financial risk due to asset-backed securitization transactions.
These risks are discussed in greater detail below, and include, but are not limited to, risks related to: Risks related to our business and operations • Managing our growth effectively, implementing our growth strategy, and opening new branches as planned; • Our convenience check strategy; • Our policies and procedures for underwriting, processing, and servicing loans; • Our ability to collect on our loan portfolio; • Our insurance operations; • Exposure to credit risk and repayment risk, which risks may increase in light of adverse or recessionary economic conditions; • The implementation of evolving underwriting models and processes, including as to the effectiveness of our custom scorecards; • Changes in the competitive environment in which we operate or a decrease in the demand for our products; • Geographic concentration of our loan portfolio; • Failure of third-party service providers, including those providing information technology products; • Changes in economic conditions in the markets we serve, including levels of unemployment and bankruptcies; Regional Management Corp. | 2024 Annual Report on Form 10-K | 16 • Our ability to achieve successful acquisitions and strategic alliances; • Our ability to make technological improvements as quickly as our competitors; • Security breaches, cyber-attacks, failures in our information systems, or fraudulent activity; • Our ability to originate loans; • Our reliance on information technology resources and providers, including the risk of prolonged system outages; • Changes in current revenue and expense trends, including trends affecting delinquencies and credit losses; • Any future public health crises, including the impact of such crisis on our operations and financial condition; • Changes in operating and administrative expenses; • The departure, transition, or replacement of key personnel; • Our ability to identify and hire qualified personnel; • Our ability to timely and effectively implement, transition to, and maintain the necessary information technology systems, infrastructure, processes, and controls to support our operations and initiatives; • Changes in interest rates; • Existing sources of liquidity become insufficient or access to these sources becomes unexpectedly restricted; and • Exposure to financial risk due to asset-backed securitization transactions.
A region’s economic condition may be directly, or indirectly, adversely affected by international events such as military conflicts or wars, prolonged public health crises, epidemics, or pandemics, national events such as civil disturbances, or natural disasters such as hurricanes, wildfires, earthquakes, and other extreme conditions (including an increase in frequency of such conditions and events as a result of climate change).
A region’s economic condition may be directly, or indirectly, adversely affected by international events such as military conflicts or wars, prolonged public health crises, epidemics, or pandemics, national events such as civil disturbances, or natural disasters such as hurricanes, wildfires, earthquakes, and other extreme conditions (including an increase in the frequency or severity of such conditions and events as a result of climate change).
Although we successfully completed securitizations during the past five years, we can give no assurances that we will be able to complete additional securitizations, including if, for example, the securitization markets become constrained or events within the Company cause investors to lack confidence in our ability to fulfill our obligations as servicer with respect to the securitizations.
Although we successfully completed securitizations during the past six years, we can give no assurances that we will be able to complete additional securitizations, including if, for example, the securitization markets become constrained or events within the Company cause investors to lack confidence in our ability to fulfill our obligations as servicer with respect to the securitizations.
In addition, the Financial Accounting Standards Board (“ FASB ”) may from time-to-time review or propose changes to financial accounting and reporting standards that govern key aspects of our financial statements, including areas where assumptions or estimates are required.
In addition, the FASB may from time-to-time review or propose changes to financial accounting and reporting standards that govern key aspects of our financial statements, including areas where assumptions or estimates are required.
Further, the value of any subordinated securities that we may retain in our securitizations might be reduced or, in some cases, eliminated as a result of an adverse change in economic conditions or other factors. Regional Management Corp. currently acts as the servicer (in such capacity, the “ Servicer ”) with respect to each securitization.
Further, the value of any subordinated securities that we may retain in our securitizations might be reduced or, in some cases, eliminated as a result of an adverse change in economic conditions or other factors. Regional Management Corp. currently acts as the Servicer with respect to each securitization.
Any common stock that we issue, including under our 2015 Plan or other equity incentive plans that we may adopt in the future, would dilute the percentage ownership held by our stockholders.
Any common stock that we issue, including under the 2024 Plan or other equity incentive plans that we may adopt in the future, would dilute the percentage ownership held by our stockholders.
These potential conflicts of interest could have a material adverse effect on our business, financial condition, results of operations, or prospects if attractive corporate opportunities are allocated by such non-employee directors to themselves or their other affiliates instead of us. Regional Management Corp. | 2023 Annual Report on Form 10-K | 36 ITEM 1B. UNRESOLVE D STAFF COMMENTS. None.
These potential conflicts of interest could have a material adverse effect on our business, financial condition, results of operations, or prospects if attractive corporate opportunities are allocated by such non-employee directors to themselves or their other affiliates instead of us. Regional Management Corp. | 2024 Annual Report on Form 10-K | 40 ITEM 1B. UNRESOLVE D STAFF COMMENTS. None.
Our ability to execute this growth strategy is subject to significant risks, some of which are beyond our control, including: • the inherent uncertainty regarding general economic conditions, including the impact of recent elevated inflation and interest rates; • the prevailing laws and regulatory environment of each state in which we operate or seek to operate and federal laws and regulations, all of which are subject to change at any time; • the degree of competition in new markets and its effect on our ability to attract new customers; • our ability to identify attractive locations for new branches; • our ability to recruit qualified personnel, particularly in remote areas and in areas where we face a great deal of competition; and • our ability to obtain adequate financing for our expansion plans.
Our ability to execute this growth strategy is subject to significant risks, some of which are beyond our control, including: • the inherent uncertainty regarding general economic conditions, including the impact of inflationary pressures and higher interest rates; • the prevailing laws and regulatory environment of each state in which we operate or seek to operate and federal laws and regulations, all of which are subject to change at any time; • the degree of competition in new markets and its effect on our ability to attract new customers; • our ability to identify attractive locations for new branches; • our ability to recruit qualified personnel, particularly in remote areas and in areas where we face a great deal of competition; and • our ability to obtain adequate financing for our expansion plans.
Any renewed economic downturn will adversely affect the financial resources of our customers and may result in the inability of our customers to make principal and interest payments on, or refinance, the outstanding debt when due. Should economic conditions worsen, they may adversely affect the credit quality of our loans.
Any renewed economic downturn will adversely affect the financial resources of our customers and may result in the inability of our customers to make principal and interest payments on, or refinance, the outstanding debt when due. Should economic conditions decline in the future, they may adversely affect the credit quality of our loans.
Interest rate risk arises from the possibility that changes in interest rates will affect our results of operations and financial condition. Interest rates are highly sensitive to many factors that are beyond our control, including general economic conditions and policies of various governmental and regulatory agencies, in particular, the Federal Reserve Board.
Interest rate risk arises from the possibility that changes in interest rates will affect our results of operations and financial condition. Interest rates are highly sensitive to many factors that are beyond our control, including general economic conditions and policies of various governmental and regulatory agencies.
Your stock ownership may be diluted by the future issuance of additional common stock in connection with our incentive plans, acquisitions, or otherwise. We have approximately 985 million shares of common stock authorized but unissued, as of February 20, 2024.
Your stock ownership may be diluted by the future issuance of additional common stock in connection with our incentive plans, acquisitions, or otherwise. We have approximately 985 million shares of common stock authorized but unissued, as of February 19, 2025.
We originate finance receivables at either prevailing market rates or at statutory limits. 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.
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.
We use convenience checks to seed new branch openings and to attract new customers to existing branches in our geographic footprint. In 2022 and 2023, loans initiated through convenience checks represented 27.2% and 27.3%, respectively, of the value of our originated installment loans.
We use convenience checks to seed new branch openings and to attract new customers to existing branches in our geographic footprint. In 2023 and 2024, loans initiated through convenience checks represented 27.3% and 27.4%, respectively, of the value of our originated installment loans.
Our amended and restated certificate of incorporation authorizes us to issue these shares of common stock and options, rights, warrants, and appreciation rights relating to common stock for the consideration and on the terms and conditions established by our Board in its discretion, whether in connection with acquisitions or otherwise.
Our amended and restated certificate of incorporation authorizes us to issue these shares of common stock and options, rights, warrants, and appreciation rights relating to common stock for the consideration and on the terms and conditions established by our Board in its discretion, whether in connection with acquisitions or otherwise. Our stockholders previously approved the 2024 Plan.
As of December 31, 2023, we have completed nine securitizations, and we may in the future securitize certain of our finance receivables to generate cash to originate new finance receivables or to pay our outstanding indebtedness.
As of December 31, 2024, we have completed eleven securitizations, and we may in the future securitize certain of our finance receivables to generate cash to originate new finance receivables or to pay our outstanding indebtedness.
If assumptions or estimates we use in preparing our financial statements are incorrect or are required to change, our reported results of operations and financial condition may be adversely affected. We are required to use certain assumptions and estimates in preparing our financial statements under U.S.
If assumptions or estimates we use in preparing our financial statements are incorrect or are required to change, our reported results of operations and financial condition may be adversely affected.
Furthermore, the annual turnover rate among our branch managers was approximately 23% in 2022 and 15% in 2023, and turnover rates of managers in our new branches may be similar or higher.
Furthermore, the annual turnover rate among our branch managers was approximately 15% in 2023 and 19% in 2024, and turnover rates of managers in our new branches may be similar or higher.
Regional Management Corp. | 2023 Annual Report on Form 10-K | 13 We face significant risks in implementing our growth strategy, some of which are outside of our control.
Regional Management Corp. | 2024 Annual Report on Form 10-K | 17 We face significant risks in implementing our growth strategy, some of which are outside of our control.
If material weaknesses or significant deficiencies in our internal control over financial reporting are discovered or occur in the future or if our controls and procedures fail or are circumvented, our consolidated financial statements may contain material misstatements, we could be required to restate our financial results, we may be unable to produce accurate and timely financial statements, and we may be unable to maintain compliance with applicable stock exchange listing requirements, any of which could Regional Management Corp. | 2023 Annual Report on Form 10-K | 24 have a material adverse effect on our business, results of operations, financial condition, and stock price.
If material weaknesses or significant deficiencies in our internal control over financial reporting are discovered or occur in the future or if our controls and procedures fail or are circumvented, our consolidated financial statements may contain material misstatements, we could be required to restate our financial results, we may be unable to produce accurate and timely financial statements, and we may be unable to maintain compliance with applicable stock exchange listing requirements, any of which could have a material adverse effect on our business, results of operations, financial condition, and stock price.
Controls and procedures are particularly important for consumer finance companies. Effective internal controls over financial reporting are necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, are designed to prevent fraud or material error.
We may be unsuccessful in maintaining effective internal controls over financial reporting and disclosure controls and procedures. Controls and procedures are particularly important for consumer finance companies. Effective internal controls over financial reporting are necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, are designed to prevent fraud or material error.
The extent to which any new public health crises, epidemics, or pandemics and/or COVID-19 resurgence will ultimately impact our business and financial condition will depend on future events that are difficult to forecast, including, but not limited to, the duration and severity of the event (including as a result of waves of outbreak or variant strains), the success of actions taken to contain, treat, and prevent the pathogen, and the speed at which normal economic and operating conditions return and are sustained.
The extent to which any new public health crises, epidemics, or pandemics will ultimately impact our business and financial condition will depend on future events that are difficult to forecast, including, but not limited to, the duration and severity of the event, the success of actions taken to contain, treat, and prevent the pathogen, and the speed at which normal economic and operating conditions return and are sustained.
An administrative proceeding or litigation relating to one or more allegations or findings of the violation of such laws by us could result in modifications to our methods of doing business, which could impair our ability to originate or otherwise acquire new loans or collect on our loan portfolio or result in us having to pay damages and/or Regional Management Corp. | 2023 Annual Report on Form 10-K | 29 cancel the balance or other amount owing under the loan associated with such violations.
An administrative proceeding or litigation relating to one or more allegations or findings of the violation of such laws by us could result in modifications to our methods of doing business, which could impair our ability to originate or otherwise acquire new loans or collect on our loan portfolio or result in us having to pay damages and/or cancel the balance or other amount owing under the loan associated with such violations.
As a result of these factors, some banks and other lenders have suffered significant losses during economic downturns, and the strength and liquidity of many financial institutions worldwide weakened during the most recent economic crisis.
As a result of these factors, some banks and other lenders have suffered significant losses during economic downturns, and the strength and liquidity of many financial institutions worldwide may weaken during an economic crisis.
As we are dependent upon our ability to gather and promptly transmit accurate information to key decision makers, our business, financial condition, and results of operations may be adversely affected if our loan management system does not allow us to transmit accurate information, even for a short period of time.
As we are dependent upon our ability to gather and promptly transmit accurate information to key decision makers, our business, financial condition, and results of operations may be adversely affected if our loan management Regional Management Corp. | 2024 Annual Report on Form 10-K | 23 system does not allow us to transmit accurate information, even for a short period of time.
Moreover, the effect of any product change on the results of our business may not be fully ascertainable until the change has been in effect for some time, and by that time it may be too late to Regional Management Corp. | 2023 Annual Report on Form 10-K | 17 make further modifications to such product without causing further harm to our business, financial condition, and results of operations.
Moreover, the effect of any product change on the results of our business may not be fully ascertainable until the change has been in effect for some time, and by that time it may be too late to make further modifications to such product without causing further harm to our business, financial condition, and results of operations.
Regional Management Corp. | 2023 Annual Report on Form 10-K | 27 In addition, elevated interest rates increase our cost of capital by influencing the amount of interest we pay on our senior revolving credit facility, our revolving warehouse credit facilities, or any other floating interest rate obligations that we may incur, which would increase our operating costs and decrease our operating margins.
In addition, elevated interest rates increase our cost of capital by influencing the amount of interest we pay on our senior revolving credit facility, our revolving warehouse credit facilities, or any other floating interest rate obligations that we may incur, which would increase our operating costs and decrease our operating margins.
For example, in 2019, bills were introduced to Congress that sought to prohibit the practice of directly mailing convenience checks to potential borrowers and extend the Military Lending Act’s consumer protections to all consumers, including a 36 percent interest rate cap on all consumer loans.
For example, in 2019, bills were Regional Management Corp. | 2024 Annual Report on Form 10-K | 35 introduced to Congress that sought to prohibit the practice of directly mailing convenience checks to potential borrowers and extend the Military Lending Act’s consumer protections to all consumers, including a 36 percent interest rate cap on all consumer loans.
In order to compete and to continue to grow, we must attract, retain, and motivate employees, including those in executive, senior management, and operational positions. As our employees gain experience and develop their knowledge and skills, they become highly desired by other businesses. Therefore, to retain our employees, we must provide a satisfying work environment and competitive compensation and benefits.
In order to compete and to continue to grow, we must attract, retain, and motivate employees, including those in executive, senior management, and operational positions. As our employees gain experience and develop their knowledge and skills, they become highly desired by other businesses.
Additionally, the Dodd-Frank Act established the CFPB, as a consumer protection regulator tasked with regulating consumer financial services and products. Since its creation, the CFPB has been the subject of lawsuits challenging its authority. Currently of note, the case of Community Financial Services Association of America, Limited v.
Additionally, the Dodd-Frank Act established the CFPB, as a consumer protection regulator tasked with regulating consumer financial services and products. Since its creation, the CFPB has been the subject of lawsuits challenging its authority. However, in May 2024, in the case of Community Financial Services Association of America, Limited v. Consumer Financial Protection Bureau , the U.S.
In these proceedings, the CFPB can obtain cease and desist orders (which can include orders for restitution or rescission of contracts, as well as other kinds of affirmative relief) and monetary penalties ranging from $6,813 per day for minor violations of federal consumer financial laws (including the CFPB’s own rules) to $34,065 per day for reckless violations and $1,362,567 per day for knowing violations.
In these proceedings, the CFPB can obtain cease and desist orders (which can include orders for restitution or rescission of contracts, as well as other kinds of affirmative relief) and monetary penalties ranging from $7,217 per day for minor violations of federal consumer financial laws (including the CFPB’s own rules) to $36,083 per day for reckless violations and $1,443,275 per day for knowing violations.
We are subject to a number of federal and state consumer privacy, data protection, and information security laws and regulations. Moreover, various federal and state regulatory agencies require us to notify customers in the event of a security breach. Federal and state legislators and regulators are increasingly pursuing new guidance, laws, and regulations in these areas.
Moreover, various federal and state regulatory agencies require us to notify customers in the event of a security breach. Federal and state legislators and regulators are increasingly pursuing new guidance, laws, and regulations in these areas.
Our financial performance generally, and in particular the ability of our borrowers to make payments on outstanding loans, is highly dependent upon the business and economic environments in the markets where we operate and in the United States as a whole. The U.S. economy is undergoing a period of rapid change and significant uncertainty.
Our financial performance generally, and in particular the ability of our borrowers to make payments on outstanding loans, is highly dependent upon the business and economic environments in the markets where we operate and in the United States as a whole.
Except for loans originated by a centralized branch and serviced at a centralized location in certain markets, the primary responsibility for the servicing and collections process generally resides with the applicable local branch, although in the future, we may direct borrowers to remit payments through one or more lockboxes.
Except for loans originated by a centralized branch and serviced at a centralized location in certain markets, the primary responsibility for the Regional Management Corp. | 2024 Annual Report on Form 10-K | 26 servicing and collections process generally resides with the applicable local branch, although in the future, we may direct borrowers to remit payments through one or more lockboxes.
Regional Management Corp. | 2023 Annual Report on Form 10-K | 26 Rating agencies may also affect our ability to execute a securitization transaction or increase the costs we expect to incur from executing securitization transactions, not only by deciding not to issue ratings for our securitization transactions, but also by altering the processes and criteria they follow in issuing ratings.
Rating agencies may also affect our ability to execute a securitization transaction or increase the costs we expect to incur from executing securitization transactions, not only by deciding not to issue ratings for our securitization transactions, but also by altering the processes and criteria they follow in issuing ratings.
As of December 31, 2022, our allowance for credit losses was $178.8 million, and we had net credit losses of $181.8 million during fiscal year 2023 that related to our portfolio as of December 31, 2022.
As of December 31, 2023, our allowance for credit losses was $187.4 million, and we had net credit losses of $178.0 million during fiscal year 2024 that related to our portfolio as of December 31, 2023.
Our future success will depend, in part, on our ability to address the needs of our customers by using technology to provide products and services that will satisfy customer demand for convenience, as well as to create additional efficiencies in our operations.
Our future success will depend, in part, on our ability to address the needs of our customers by using technology to provide products and services that will satisfy customer demand for convenience, as well as to create additional efficiencies in our Regional Management Corp. | 2024 Annual Report on Form 10-K | 24 operations.
Due to the highly regulated nature of the consumer finance industry, we are required to comply with a wide array of federal, state, and local laws and regulations that affect, among other things, the manner in which we conduct our origination and servicing operations.
Regional Management Corp. | 2024 Annual Report on Form 10-K | 33 Due to the highly regulated nature of the consumer finance industry, we are required to comply with a wide array of federal, state, and local laws and regulations that affect, among other things, the manner in which we conduct our origination and servicing operations.
Regional Management Corp. | 2023 Annual Report on Form 10-K | 31 Financial regulatory reform has created uncertainty and could negatively impact our business, financial condition, and results of operations. In response to the financial crisis in 2008, the Dodd-Frank Act was signed into law on July 21, 2010.
Financial regulatory reform has created uncertainty and could negatively impact our business, financial condition, and results of operations. In response to the financial crisis in 2008, the Dodd-Frank Act was signed into law on July 21, 2010.
Lastly, there is an inherent risk that a portion of the retail installment loans that we hold will be subject to certain claims or defenses that the borrower may assert against the originator of the contract and, by extension, us as the holder of the contract.
Lastly, there is an inherent risk that a portion of the retail installment loans that we hold will be subject to certain claims or defenses that the borrower may assert against the originator of Regional Management Corp. | 2024 Annual Report on Form 10-K | 20 the contract and, by extension, us as the holder of the contract.
Although many of the regulations implementing portions of the Dodd-Frank Act have been promulgated, we are still unable to predict how this significant legislation may be interpreted and enforced or the full extent to which implementing regulations and Regional Management Corp. | 2023 Annual Report on Form 10-K | 32 supervisory policies may affect it.
Although many of the regulations implementing portions of the Dodd-Frank Act have been promulgated, we are still unable to predict how this significant legislation may be interpreted and enforced or the full extent to which implementing regulations and supervisory policies may affect it.
As of December 31, 2023, our integrated branch network consisted of 346 branches across 19 states.
As of December 31, 2024, our integrated branch network consisted of 344 branches across 19 states.
We have 308,182 shares available for issuance under the 2015 Plan, as of February 20, 2024. In addition, our Board may recommend in the future that our stockholders approve new stock plans.
We have 588,865 shares available for issuance under the 2024 Plan as of February 19, 2025. In addition, our Board may recommend in the future that our stockholders approve new stock plans.
As of December 31, 2023, subject to adjustments as provided in the 2015 Plan, the maximum aggregate number of shares of our common stock that may be issued under the 2015 Plan may not exceed the sum of (a) 2,600,000 shares plus (b) any shares remaining available for the grant of awards as of the 2015 Plan effective date under the 2007 Management Incentive Plan (the “ 2007 Plan ”) or the 2011 Stock Incentive Plan (the “ 2011 Plan ”), plus (c) any shares subject to an award granted under the 2007 Plan or the 2011 Plan, which award is forfeited, cash-settled, cancelled, terminated, expires, or lapses for any reason without the issuance of shares or pursuant to which such shares are forfeited.
As of December 31, 2024, subject to adjustments as provided in the 2024 Plan, the maximum aggregate number of shares of our common stock that may be issued under the 2024 Plan may not exceed the sum of (i) 381,000 shares plus, (ii) any shares remaining available for the grant of awards as of the 2024 Plan’s effective date 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 the 2024 Plan’s effective date without the issuance of shares or pursuant to which such shares are forfeited.
The Regional Management Corp. | 2023 Annual Report on Form 10-K | 16 unaffiliated insurance company cedes to our wholly-owned insurance subsidiary, RMC Reinsurance, Ltd., all of these insurance policies, the related net insurance premium revenue and the associated insurance claims liability for such insurance products, including the non-file insurance that we purchase.
The unaffiliated insurance company cedes to our wholly owned insurance subsidiary, RMC Reinsurance, Ltd., all of these insurance policies, the related net insurance premium revenue and the associated insurance claims liability for such insurance products, including the non-file insurance that we purchase.
Our reputation is critical to maintaining and developing relationships with our existing and potential customers and third parties with whom we do business. There is a risk that our employees or third-party contractors could engage in misconduct that Regional Management Corp. | 2023 Annual Report on Form 10-K | 23 adversely affects our business.
Our reputation is critical to maintaining and developing relationships with our existing and potential customers and third parties with whom we do business. There is a risk that our employees or third-party contractors could engage in misconduct that adversely affects our business.
If in any legal proceeding we incur liability or defense costs that exceed our insurance coverage or that are not within the scope of our insurance coverage, it could have a material adverse effect on our business, financial condition, and results of operations. Current and proposed regulations related to consumer privacy, data protection, and information security could increase our costs.
If in any legal proceeding we incur liability or defense costs that exceed our insurance coverage or that are not within the scope of our insurance coverage, it could have a material adverse effect on our business, financial condition, and results of operations.
Depending on the nature and scope of a violation, fines and other penalties for noncompliance of applicable requirements could be significant and could have a material adverse effect on our business, financial condition, and results of operations.
Depending on the nature and scope of a violation, fines and other penalties for noncompliance of applicable Regional Management Corp. | 2024 Annual Report on Form 10-K | 34 requirements could be significant and could have a material adverse effect on our business, financial condition, and results of operations.
This results in increased due diligence and ongoing monitoring of third-party vendor relationships, thus increasing the scope of management involvement and decreasing the benefit that we receive from using third-party vendors.
This results in increased due diligence and ongoing monitoring of third-party vendor relationships, thus increasing the scope of Regional Management Corp. | 2024 Annual Report on Form 10-K | 37 management involvement and decreasing the benefit that we receive from using third-party vendors.
Our securitizations may expose us to financing and other risks, and there can be no assurance that we will be able to access the securitization market in the future, which may require us to seek more costly financing.
Regional Management Corp. | 2024 Annual Report on Form 10-K | 30 Our securitizations may expose us to financing and other risks, and there can be no assurance that we will be able to access the securitization market in the future, which may require us to seek more costly financing.
With respect to our managed portfolio of loan products, during fiscal year 2023, approximately 13% (by dollar amount) of our loan payments were made by cash or check and received in branch, although in the future we may direct borrowers to remit payments through one or more Regional Management Corp. | 2023 Annual Report on Form 10-K | 22 lockboxes.
With respect to our managed portfolio of loan products, during fiscal year 2024, approximately 12% (by dollar amount) of our loan payments were made by cash or check and received in branch, although in the future we may direct borrowers to remit payments through one or more lockboxes.
We have entered into certain financing arrangements, including revolving warehouse credit facilities and securitizations, which are secured by certain retail installment contracts and promissory notes (the “ Receivables ”).
We have entered into certain financing arrangements, including revolving warehouse credit facilities and securitizations, which are secured by Receivables.
Declining asset values, defaults on consumer loans, and the lack of market and investor confidence, as well as other factors, all combine to decrease liquidity during an economic downturn.
Declining asset values, defaults on consumer loans, and the lack of market and investor confidence, Regional Management Corp. | 2024 Annual Report on Form 10-K | 32 as well as other factors, all combine to decrease liquidity during an economic downturn.
We have experienced substantial growth in recent years, increasing the size of our finance receivable portfolio from $951.2 million at the beginning of 2019 to $1.8 billion at the end of 2023, a compound annual growth rate of 13.2%. We intend to continue our growth strategy in the future.
We have experienced substantial growth in recent years, increasing the size of our finance receivable portfolio from $1.1 billion as of December 31, 2019 to $1.9 billion at the end of 2024, a compound annual growth rate of 10.8%. We intend to continue our growth strategy in the future.
These provisions could also discourage proxy Regional Management Corp. | 2023 Annual Report on Form 10-K | 35 contests and make it more difficult for you and other stockholders to elect directors of your choosing and to cause us to take other corporate actions you desire.
These provisions could also discourage proxy contests and make it more difficult for you and other stockholders to elect directors of your choosing and to cause us to take other corporate actions you desire.
On October 29, 2020, we announced that our Board of Directors (the “ Board ”) initiated and declared a quarterly cash dividend of $0.20 per share, which was increased by our Board to $0.25 per share on June 15, 2021 and to $0.30 per share on February 9, 2022.
There can be no assurance of our ability to declare and pay cash dividends in future periods. On October 29, 2020, we announced that the Board initiated and declared a quarterly cash dividend of $0.20 per share, which was increased by our Board to $0.25 per share on June 15, 2021 and to $0.30 per share on February 9, 2022.
Should there be a new public health crisis, epidemic, or pandemic, or a COVID-19 resurgence, and we experience disruptions in our online operations, including our remote origination capabilities, or are unable to timely expand our remote working infrastructure in response to government or company initiated restrictions, we may be unable to timely and effectively service accounts and perform key business functions.
If we were to experience disruptions in our online operations, including our remote origination capabilities, or are unable to timely expand our remote working infrastructure in response to government or company initiated restrictions, we may be unable to timely and effectively service accounts and perform key business functions.
If any of these events, risks, or uncertainties were to occur or materialize, it could have a material adverse effect on our business, financial condition, and results of operations and cash flows. A reduction in demand for our products and a failure by us to adapt to such reduction could adversely affect our business and results of operations.
If any of these events, risks, or uncertainties were to occur or materialize, it could have a material adverse effect on our business, financial condition, and results of operations and cash flows.
The increase in net credit losses related to the December 31, 2022 portfolio was the result of sustained macroeconomic stress on our customers related to elevated inflation and interest rates during 2023. As of December 31, 2023, our allowance for credit losses was $187.4 million.
Net credit losses related to the December 31, 2023 portfolio were impacted by sustained macroeconomic stress on our customers related to elevated inflation and interest rates during 2024. As of December 31, 2024, our allowance for credit losses was $199.5 million.
In addition, significant assumptions and estimates are involved in determining certain disclosures required under GAAP, including those involving the fair value of our financial instruments.
In addition, significant assumptions and estimates are involved in determining certain disclosures required under GAAP, including those involving the fair Regional Management Corp. | 2024 Annual Report on Form 10-K | 29 value of our financial instruments.
The amount outstanding thereunder was $195.5 million ($194.0 million of outstanding debt and $1.5 million of interest payable) as of December 31, 2023, and we had $226.0 million of unused capacity on the credit facility (subject to certain covenants and conditions) at that time.
The amount outstanding thereunder was $219.3 million ($217.8 million of outstanding debt and $1.6 million of interest payable) as of December 31, 2024, and we had $137.2 million of unused capacity on the credit facility (subject to certain covenants and conditions) at that time.
If these persons were to criticize the products that we offer, it could result in further regulation of our business and could negatively impact our relationships with existing borrowers and efforts to attract new borrowers.
These critics frequently characterize such alternative financial services providers as predatory or abusive toward consumers. If these persons were to criticize the products that we offer, it could result in further regulation of our business and could negatively impact our relationships with existing borrowers and efforts to attract new borrowers.
No prediction can be made and no Regional Management Corp. | 2023 Annual Report on Form 10-K | 18 assurance can be given as to the effect of economic conditions on the rate of delinquencies, prepayments, or losses on our loan portfolio with respect to any part of our geographic footprint.
No assurance can be given as to the effect of economic conditions on the rate of delinquencies, prepayments, or losses on our loan portfolio with respect to any part of our geographic footprint.
Generally Accepted Accounting Principles (“ GAAP ”), including in determining allowances for credit losses, the fair value of financial instruments, asset impairment, reserves related to litigation and other legal matters, the fair value of share-based compensation, and other taxes and regulatory exposures.
We are required to use certain assumptions and estimates in preparing our financial statements under GAAP, including in determining allowances for credit losses, the fair value of financial instruments, asset impairment, reserves related to litigation and other legal matters, the fair value of share-based compensation, and other taxes and regulatory exposures.
These sales, or the possibility that these sales may occur, also might make it more difficult for us to issue equity securities in the future at a time and at a price that we deem appropriate. Anti-takeover provisions in our charter documents and applicable state law might discourage or delay acquisition attempts for us that you might consider favorable.
These sales, or the possibility that these sales may occur, also might make it more difficult for us to issue equity securities in the future at a time and at a price that we deem appropriate.
We also rely on third-party software vendors to provide access to loan applications and/or screen applications. There can be no assurance that these third-party providers will continue to provide us information in accordance with our lending guidelines or that they will continue to provide us lending leads at all.
There can be no assurance that these third-party providers will continue to provide us information in accordance with our lending guidelines or that they will continue to provide us lending leads at all. We rely on Amazon Web Services and Microsoft Azure for our computing, storage, networking, and similar services.
Our absolute and relative progress, or lack thereof, on environmental, social, and governance matters, along with our disclosure (or lack Regional Management Corp. | 2023 Annual Report on Form 10-K | 28 of disclosure) related thereto, could impact our reputation, brand, and the willingness of individuals and institutions to hold our common stock.
Many of our stakeholders possess increased interest in our environmental, social, and governance responsibilities. Our absolute and relative progress, or lack thereof, on environmental, social, and governance matters, along with our disclosure (or lack of disclosure) related thereto, could impact our reputation, brand, and the willingness of individuals and institutions to hold our common stock.
If our existing sources of liquidity become insufficient to satisfy our financial needs or our access to these sources becomes unexpectedly restricted, we may need to try to raise additional capital in the future.
We use our senior revolving credit facility as a source of liquidity, including for working capital and to fund the loans we make to our customers. If our existing sources of liquidity become insufficient to satisfy our financial needs or our access to these sources becomes unexpectedly restricted, we may need to try to raise additional capital in the future.
The proceeds we receive from such sales depend upon various factors, including the supply of, and demand for, used vehicles and other property at the time of sale. During periods of economic slowdown or recession, there may be less demand for used vehicles and other property that we desire to resell.
The proceeds we receive from such sales depend upon various factors, including the supply of, and demand for, used vehicles and other property at the time of sale.
In addition, our existing insurance policies would not reimburse us for all of the damages that we might incur as a result of a breach. Regional Management Corp. | 2023 Annual Report on Form 10-K | 20 A security breach or cyber-attack on our computer systems could interrupt or damage our operations or harm our reputation.
Additionally, our existing insurance policies may be insufficient to reimburse us for all of the damages that we might incur as a result of a breach. A security breach or cyber-attack on our computer systems could interrupt or damage our operations or harm our reputation.
The outage had an adverse impact on our results of Regional Management Corp. | 2023 Annual Report on Form 10-K | 19 operations. Although the Company, with the assistance of third-party experts, addressed and resolved the issue, there can be no assurance that a similar event will not occur in the future.
The outage had an adverse impact on our results of operations. Although the Company, with the assistance of third-party experts, addressed and resolved the issue, there can be no assurance that a similar event will not occur in the future. We also rely on third-party software vendors to provide access to loan applications and/or screen applications.
Further, changes in the regulatory application or judicial interpretation of the laws and regulations applicable to financial institutions also could impact the manner in which we conduct our business.
Additionally, Congress, the states, and regulatory agencies could further regulate the consumer credit industry in ways that make it more difficult for us to conduct business. Further, changes in the regulatory application or judicial interpretation of the laws and regulations applicable to financial institutions also could impact the manner in which we conduct our business.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur Senior Director of Information Security (the “ SDIS ”), who holds a graduate degree in cybersecurity and several industry leading cybersecurity certifications, is responsible for our overall information security program including strategy, security engineering, cyber threat detection, and response.
Biggest changeOur SDIS, who holds a graduate degree in cybersecurity and several industry leading cybersecurity certifications, is the management position responsible for our overall information security program including strategy, security engineering, cyber threat detection, and response.
Contractually, data handling third parties are required to uphold all applicable rules, laws, and regulations in addition to, when applicable, notifying us of cyber security events that may negatively impact us or our data. We also require all employees to perform annual cybersecurity training.
Contractually, data handling third parties are required to uphold all applicable rules, laws, and regulations in addition to, when applicable, notifying us of cybersecurity events that may negatively impact us or our data. We also require all employees to perform annual cybersecurity training.
We are committed to maintaining robust cybersecurity oversight, controls, and strategies that are designed to help us assess, identify, and manage cybersecurity risks. Our Board includes members with skills and experience in cybersecurity, technology, and innovation. The Board ultimately oversees cybersecurity risks and evaluates such risks as part of our enterprise risk management (“ ERM ”) program.
We are committed to maintaining robust cybersecurity oversight, controls, and strategies that are designed to help us assess, identify, and manage cybersecurity risks. Our Board includes members with skills and experience in cybersecurity, technology, and innovation. The Board ultimately oversees cybersecurity risks and evaluates such risks as part of our ERM program.
“Risk Factors” for information about our cybersecurity risks.
“Risk Factors” for information about our cybersecurity risks. Regional Management Corp. | 2024 Annual Report on Form 10-K | 41

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeOur branches have an average branch size of approximately 1,853 square feet. Regional Management Corp. | 2023 Annual Report on Form 10-K | 37 In the opinion of management, our properties have been well-maintained, are in sound operating condition, and contain all equipment and facilities necessary to operate at present levels.
Biggest changeOur branches have an average branch size of approximately 1,950 square feet. In the opinion of management, our properties have been well-maintained, are in sound operating condition, and contain all equipment and facilities necessary to operate at present levels. We believe that all of our facilities are suitable and adequate for our present purposes.
ITEM 2. PR OPERTIES. Our headquarters operations are located in an approximately 51,700 square foot leased facility in Greer, South Carolina, a town located outside of Greenville, South Carolina. As of February 20, 2024, each of our 343 branches, which are located in 19 states throughout the United States, is leased under a fixed-term lease agreement.
ITEM 2. PR OPERTIES. Our headquarters operations are located in an approximately 51,700 square foot leased facility in Greer, South Carolina, a town located outside of Greenville, South Carolina. As of February 19, 2025, each of our 348 branches, which are located in 19 states throughout the United States, is leased under a fixed-term lease agreement.
We believe that all of our facilities are suitable and adequate for our present purposes. Our only reportable segment, which is our consumer finance segment, uses the properties described in this Part I, Item 2, “Properties.”
Our only reportable segment, which is our consumer finance segment, uses the properties described in this Part I, Item 2, “Properties.”

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Removed
ITEM 4. MINE SAFE TY DISCLOSURES. Not applicable. Regional Management Corp. | 2023 Annual Report on Form 10-K | 38 Part II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe following table sets forth the dividends declared and paid for the periods indicated: Period Declaration Date Record Date Payment Date Dividends Declared Per Common Share 1Q 23 February 8, 2023 February 22, 2023 March 15, 2023 $ 0.30 2Q 23 May 3, 2023 May 24, 2023 June 14, 2023 $ 0.30 3Q 23 August 2, 2023 August 23, 2023 September 14, 2023 $ 0.30 4Q 23 November 1, 2023 November 22, 2023 December 13, 2023 $ 0.30 Total $ 1.20 On February 7, 2024, the Board declared a quarterly dividend of $0.30, payable on March 14, 2024, to stockholders of record on February 22, 2024.
Biggest changeThe following table sets forth the dividends declared and paid for the periods indicated: Period Declaration Date Record Date Payment Date Dividends Declared Per Common Share 1Q 24 February 7, 2024 February 22, 2024 March 14, 2024 $ 0.30 2Q 24 May 1, 2024 May 22, 2024 June 12, 2024 0.30 3Q 24 July 31, 2024 August 21, 2024 September 12, 2024 0.30 4Q 24 November 6, 2024 November 21, 2024 December 11, 2024 0.30 Total $ 1.20 On February 5, 2025, the Board declared a quarterly dividend of $0.30, payable on March 13, 2025, to stockholders of record on February 20, 2025.
Further information concerning shareholdings of our officers, directors, and principal stockholders is incorporated by reference in Part III, Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” of this Annual Report on Form 10-K. Dividends In October 2020, we announced that our Board initiated and declared a quarterly cash dividend program.
Further information concerning shareholdings of our officers, directors, and principal stockholders is incorporated by reference in Part III, Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” of this Annual Report on Form 10-K. Dividends; Stock Repurchases In October 2020, we announced that our Board initiated and declared a quarterly cash dividend program.
Our amended and restated senior revolving credit facility includes a provision restricting our ability to pay dividends on our common stock based upon, among other things, our interest coverage ratio and hypothetical availability under the credit facility. Likewise, certain of our credit facilities restrict certain of our wholly owned subsidiaries from paying dividends to us, subject to certain exceptions.
Our senior revolving credit facility includes a provision restricting our ability to pay dividends on our common stock based upon, among other things, our interest coverage ratio and hypothetical availability under the credit facility. Likewise, certain of our credit facilities restrict certain of our wholly owned subsidiaries from paying dividends to us, subject to certain exceptions.
The graph assumes that $100 was invested at the market close on December 31, 2018, in the common stock of the Company, the NYSE Composite Index, and the NYSE Financial Index, and data for each assumes reinvestments of dividends. The stock price performance of the following graph is not necessarily indicative of future stock price performance.
The graph assumes that $100 was invested at the market close on December 31, 2019, in the common stock of the Company, the NYSE Composite Index, and the NYSE Financial Index, and data for each assumes reinvestments of dividends. The stock price performance of the following graph is not necessarily indicative of future stock price performance.
Non-Affiliate Ownership For purposes of calculating the aggregate market value of shares of our common stock held by non-affiliates, as set forth on the cover page of this Annual Report on Form 10-K, we have assumed that all outstanding shares are held by non-affiliates, except for shares held by each of our executive officers, directors, and 5% or greater stockholders as of June 30, 2023.
Non-Affiliate Ownership For purposes of calculating the aggregate market value of shares of our common stock held by non-affiliates, as set forth on the cover page of this Annual Report on Form 10-K, we have assumed that all outstanding shares are held by non-affiliates, except for shares held by each of our executive officers, directors, and 5% or greater stockholders as of June 28, 2024.
The following graph shows a comparison of the cumulative total return for our common stock, the NYSE Composite Index, and the NYSE Financial Index for the five years ended December 31, 2023.
The following graph shows a comparison of the cumulative total return for our common stock, the NYSE Composite Index, and the NYSE Financial Index for the five years ended December 31, 2024.
Because many of the shares of our common stock are held by brokers and other institutions on behalf of stockholders, we are unable to determine the exact number of beneficial stockholders represented by those record holders, but we believe that there were approximately 3,480 beneficial owners of our common stock as of February 16, 2024.
Because many of the shares of our common stock are held by brokers and other institutions on behalf of stockholders, we are unable to determine the exact number of beneficial stockholders represented by those record holders, but we believe that there were approximately 3,699 beneficial owners of our common stock as of January 15, 2025.
Regional Management Corp. | 2023 Annual Report on Form 10-K | 39 Stock Performance Graph This performance graph shall not be deemed “soliciting material” or to be “filed” with the Securities and Exchange Commission for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933.
Regional Management Corp. | 2024 Annual Report on Form 10-K | 44 Stock Performance Graph This performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that section, and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOC KHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Market Information Our common stock is listed on the New York Stock Exchange (the “ NYSE ”) under the symbol “RM.” Holders As of February 20, 2024, there were 15 registered holders of our common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOC KHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Market Information Our common stock is listed on the NYSE under the symbol “RM.” Holders As of February 19, 2025, there were 14 registered holders of our common stock.
Regional Management Corp. | 2023 Annual Report on Form 10-K | 40
Regional Management Corp. | 2024 Annual Report on Form 10-K | 45
The declaration, amount, and payment of any future cash dividends on shares of common stock will be at the discretion of our Board.
The authorization was effective immediately and extends through December 31, 2026. The declaration, amount, and payment of any future cash dividends on shares of common stock and/or repurchases of common stock will be at the discretion of our Board.
Added
The following table provides information regarding our share repurchase transactions during the three months ended December 31, 2024: Issuer Purchases of Equity Securities Period Total Number of Shares Purchased 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* October 1, 2024 – October 31, 2024 — $ — — $ — November 1, 2024 – November 30, 2024 — — — $ — December 1, 2024 – December 31, 2024 104,542 33.83 104,542 $ 26,463,154 Total 104,542 $ 33.83 104,542 Regional Management Corp. | 2024 Annual Report on Form 10-K | 43 * 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.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

85 edited+23 added−19 removed47 unchanged
Biggest changeRegional Management Corp. | 2023 Annual Report on Form 10-K | 45 Results of Operations The following table summarizes our results of operations, both in dollars and as a percentage of average net finance receivables: Year Ended December 31, 2023 2022 2021 Dollars in thousands Amount % of Average Net Finance Receivables Amount % of Average Net Finance Receivables Amount % of Average Net Finance Receivables Revenue Interest and fee income $ 489,698 28.6 % $ 450,854 29.5 % $ 382,544 31.5 % Insurance income, net 44,529 2.6 % 43,502 2.8 % 35,482 2.9 % Other income 17,172 1.0 % 12,831 0.8 % 10,325 0.9 % Total revenue 551,399 32.2 % 507,187 33.1 % 428,351 35.3 % Expenses Provision for credit losses 220,034 12.9 % 185,115 12.1 % 89,015 7.3 % Personnel 156,872 9.2 % 141,243 9.2 % 119,833 9.9 % Occupancy 25,029 1.5 % 23,809 1.6 % 24,126 2.0 % Marketing 15,774 0.9 % 15,378 1.0 % 14,405 1.2 % Other 45,444 2.6 % 42,098 2.7 % 37,150 3.0 % Total general and administrative 243,119 14.2 % 222,528 14.5 % 195,514 16.1 % Interest expense 67,463 3.9 % 34,223 2.2 % 31,349 2.6 % Income before income taxes 20,783 1.2 % 65,321 4.3 % 112,473 9.3 % Income taxes 4,825 0.3 % 14,097 1.0 % 23,786 2.0 % Net income $ 15,958 0.9 % $ 51,224 3.3 % $ 88,687 7.3 % Information explaining the changes in our results of operations from year-to-year is provided in the following pages.
Biggest changeRegional Management Corp. | 2024 Annual Report on Form 10-K | 50 Results of Operations The following table summarizes our results of operations, both in dollars and as a percentage of average net finance receivables: Year Ended December 31, 2024 2023 2022 Dollars in thousands Amount % of Average Net Finance Receivables Amount % of Average Net Finance Receivables Amount % of Average Net Finance Receivables Revenue Interest and fee income $ 528,894 29.6 % $ 489,698 28.6 % $ 450,854 29.5 % Insurance income, net 40,695 2.3 % 44,529 2.6 % 43,502 2.8 % Other income 18,914 1.0 % 17,172 1.0 % 12,831 0.8 % Total revenue 588,503 32.9 % 551,399 32.2 % 507,187 33.1 % Expenses Provision for credit losses 212,200 11.9 % 220,034 12.9 % 185,115 12.1 % Personnel 153,789 8.6 % 156,872 9.2 % 141,243 9.2 % Occupancy 25,823 1.4 % 25,029 1.5 % 23,809 1.6 % Marketing 19,006 1.1 % 15,774 0.9 % 15,378 1.0 % Other 49,080 2.7 % 45,444 2.6 % 42,098 2.7 % Total general and administrative 247,698 13.8 % 243,119 14.2 % 222,528 14.5 % Interest expense 74,530 4.2 % 67,463 3.9 % 34,223 2.2 % Income before income taxes 54,075 3.0 % 20,783 1.2 % 65,321 4.3 % Income taxes 12,848 0.7 % 4,825 0.3 % 14,097 1.0 % Net income $ 41,227 2.3 % $ 15,958 0.9 % $ 51,224 3.3 % Information explaining the changes in our results of operations from year-to-year is provided in the following pages.
Small and large installment loans are our core products and will be the drivers of future growth. We ceased accepting applications for our retail loan product offering in November 2022, to focus on growing our core loan portfolio. We continue to own and service our existing portfolio of retail loans.
Large and small installment loans are our core products and will be the drivers of future growth. We ceased accepting applications for our retail loan product offering in November 2022, to focus on growing our core loan portfolio. We continue to own and service our existing portfolio of retail loans.
Our primary sources of revenue are interest and fee income from our loan products, of which interest and fees relating to small and large installment loans are the largest component. In addition to interest and fee income from loans, we derive revenue from optional insurance products purchased by customers of our direct loan products.
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 derive revenue from optional insurance products purchased by customers of our direct loan products.
On March 7, 2023, the CFPB provided us with the Notice seeking to establish supervisory authority over us pursuant to section 1024(a)(1)(C) of the Consumer Financial Protection Act of 2010.
On March 7, 2023, the CFPB provided us with Notice seeking to establish supervisory authority over us pursuant to section 1024(a)(1)(C) of the Consumer Financial Protection Act of 2010.
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.
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.
See Note 19, “Subsequent Events” of the Notes to Consolidated Financial Statements in Part II, Item 8, “Financial Statements and Supplementary Data,” for information regarding our quarterly cash dividend following the end of the year.
See Note 21, “Subsequent Events” of the Notes to Consolidated Financial Statements in Part II, Item 8, “Financial Statements and Supplementary Data,” for information regarding our quarterly cash dividend following the end of the year.
We responded to the Notice by voluntarily consenting to the CFPB’s supervisory authority and entering into the Consent Agreement dated January 4, 2024. Pursuant to the Consent Agreement and related CFPB order, the CFPB will have supervisory authority over us for a period of two years ending January 8, 2026.
We responded to the Notice by voluntarily consenting to the CFPB’s supervisory authority and entering into the Consent Agreement. Pursuant to the Consent Agreement and related CFPB order, the CFPB will have supervisory authority over us for a period of two years ending January 8, 2026.
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 December 31, 2023 by $1.2 million. The macroeconomic scenarios are highly influenced by timing, severity, and duration of changes in the underlying economic factors.
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 December 31, 2024 by $1.8 million. The macroeconomic scenarios are highly influenced by timing, severity, and duration of changes in the underlying economic factors.
Consequently, we experience seasonal fluctuations in our operating results. However, changes in macroeconomic factors, including inflation, rising interest rates, and geopolitical conflict, have impacted our typical seasonal trends for loan volume and delinquency. Growth in Loan Portfolio. The revenue that we derive from interest and fees is largely driven by the balance of loans that we originate.
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.
For additional information regarding our business operations, see Part I, Item 1, “Business.” Regional Management Corp. | 2023 Annual Report on Form 10-K | 42 Outlook We continually assess the macroeconomic environment in which we operate in order to appropriately and timely adapt to current market conditions.
For additional information regarding our business operations, see Part I, Item 1, “Business.” Regional Management Corp. | 2024 Annual Report on Form 10-K | 47 Outlook We continually assess the macroeconomic environment in which we operate in order to appropriately and timely adapt to current market conditions.
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 December 31, 2023, representing 82% of total debt. Operating Costs. Our financial results are impacted by the costs of operations and head office functions.
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 December 31, 2024, representing 79% of our total debt. Operating Costs. Our financial results are impacted by the costs of operations and head office functions.
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, Fair Isaac Corporation score, and delinquency status.
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.
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 December 31, 2023, we operate under the name “Regional Finance” online and in 346 branch locations in 19 states across the United States, serving 538,400 active accounts.
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 December 31, 2024, we operate under the name “Regional Finance” online and in 344 branch locations in 19 states across the United States, serving 575,400 active accounts.
We ceased accepting applications for our retail loan product offering as of November 2022 to focus on growing our core loan portfolio.
We ceased accepting applications for our retail loan product offering in November 2022 to focus on growing our core loan portfolio.
As reinsurer, we maintain restricted reserves comprised of restricted cash and restricted available-for-sale investments for life insurance claims in an amount determined by the unaffiliated insurance company. As of December 31, 2023, the restricted reserves consisted of $21.9 million of unearned premium reserves and $1.2 million of unpaid claims reserves. The unaffiliated insurance company maintains the reserves for non-life claims.
As reinsurer, we maintain restricted reserves comprised of restricted cash and restricted AFS investments for life insurance in an amount determined by the unaffiliated insurance company. As of December 31, 2024, the restricted reserves consisted of $21.2 million of unearned premium reserves and $1.2 million of unpaid claims reserves. The unaffiliated insurance company maintains the reserves for non-life claims.
As of December 31, 2023, we have five credit facilities outstanding and, from time to time, engage in the private offering and sale of asset-backed notes. We had $108.1 million and $97.6 million of immediate availability to draw down cash from our revolving credit facilities as of December 31, 2023 and December 31, 2022, respectively.
As of December 31, 2024, we had five credit facilities outstanding and, from time to time, engage in the private offering and sale of asset-backed notes. We had $132.9 million and $108.1 million of immediate availability to draw down cash from our revolving credit facilities as of December 31, 2024 and December 31, 2023, respectively.
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: • Small Loans (≤$2,500) – As of December 31, 2023, we had 289.3 thousand small installment loans outstanding, representing $493.5 million in net finance receivables.
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 December 31, 2024, we had 259.5 thousand large installment loans outstanding, representing $1.3 billion in net finance receivables.
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 available-for-sale investments, which totaled $0.3 million and $22.7 million, respectively, as of December 31, 2023.
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, which totaled $0.7 million and $21.7 million, respectively, as of December 31, 2024.
Additionally, we often experience increases in other expenses including legal expenses, collections expense, 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 0.3% to 14.2% during 2023, from 14.5% during 2022.
Additionally, 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 0.4% to 13.8% during 2024, from 14.2% during 2023.
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 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.
Regional Management Corp. | 2023 Annual Report on Form 10-K | 49 Comparison of the Year Ended December 31, 2022, Versus the Year Ended December 31, 2021 For a comparison of our results of operations for the years ended December 31, 2022 and December 31, 2021, see Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (which was filed with the Securities and Exchange Commission on February 24, 2023), which is incorporated by reference herein.
Comparison of the Year Ended December 31, 2023, Versus the Year Ended December 31, 2022 For a comparison of our results of operations for the years ended December 31, 2023 and December 31, 2022, see Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (which was filed with the SEC on February 22, 2024), which is incorporated by reference herein.
Regional Management Corp. | 2023 Annual Report on Form 10-K | 52 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.
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.
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.
Regional Management Corp. | 2024 Annual Report on Form 10-K | 48 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.
The decrease in cash provided was the result of a decrease in net advances on debt instruments of $202.5 million, partially offset by a decrease in the repurchases of common stock of $20.6 million and a decrease in payments for debt issuance costs of $2.9 million. Financing Arrangements and Restricted Cash Reserve Accounts.
The increase in cash provided was the result of an increase in net advances on debt instruments of $34.5 million, partially offset by an increase in payments for debt issuance costs of $3.9 million and an increase in the repurchases of common stock of $3.5 million. Financing Arrangements and Restricted Cash Reserve Accounts.
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.
Regional Management Corp. | 2024 Annual Report on Form 10-K | 49 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 general and administrative expenses increased $20.6 million, or 9.3%, to $243.1 million in 2023 from $222.5 million in 2022. The absolute dollar increase in general and administrative expenses is explained in greater detail below. Personnel.
Our general and administrative expenses increased $4.6 million, or 1.9%, to $247.7 million in 2024 from $243.1 million in 2023. The absolute dollar increase in general and administrative expenses is explained in greater detail below. Personnel.
Our operating expense ratio has improved as we have grown our loan portfolio and controlled expense growth. Interest Expense. Interest expense increased $33.2 million, or 97.1%, to $67.5 million in 2023, compared to $34.2 million in 2022.
Our operating expense ratio has improved as we have grown our loan portfolio and controlled expense growth. Interest Expense. Interest expense increased $7.1 million, or 10.5%, to $74.5 million in 2024, compared to $67.5 million in 2023.
See “Government Regulation” in Part I, Item 1 “Business” and “Risks Related to Regulation and Legal Proceedings” in Part I, Item 1A “Risk Factors” for a further discussion of the regulation and regulatory risks to which we are subject. Regional Management Corp. | 2023 Annual Report on Form 10-K | 53
See “Government Regulation” in Part I, Item 1 “Business” and “Risks Related to Regulation and Legal Proceedings” in Part I, Item 1A “Risk Factors” for a further discussion of the regulation and regulatory risks to which we are subject.
This included 61.9 thousand large loan convenience checks, representing $194.3 million in net finance receivables. • Retail Loans – As of December 31, 2023, we had 2.5 thousand retail purchase loans outstanding, representing $3.8 million in net finance receivables. • Optional Insurance Products – We offer optional payment and collateral protection insurance to our direct loan customers.
This included 167.3 thousand small loan convenience checks, representing $260.9 million in net finance receivables. • Retail Loans – As of December 31, 2024, we had 1.0 thousand retail purchase loans outstanding, representing $1.1 million in net finance receivables. • Optional Insurance Products – We offer optional payment and collateral protection insurance to our direct loan customers.
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).
Regional Management Corp. | 2024 Annual Report on Form 10-K | 57 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).
See Note 4, “Finance Receivables, Credit Quality Information, and Allowance for Credit Losses” of the Notes to Consolidated Financial Statements in Part II, Item 8, “Financial Statements and Supplementary Data,” for additional information regarding our allowance for credit losses. Net Credit Losses. Net credit losses increased $45.8 million, or 27.7%, to $211.4 million in 2023, from $165.6 million in 2022.
See Note 4, “Finance Receivables, Credit Quality Information, and Allowance for Credit Losses” of the Notes to Consolidated Financial Statements in Part II, Item 8, “Financial Statements and Supplementary Data,” for additional information regarding our allowance for credit losses. Net Credit Losses. Net credit losses decreased $11.3 million, or 5.4%, to $200.1 million in 2024, from $211.4 million in 2023.
Our interest expense consists primarily of paid and accrued interest for debt, unused line fees, and amortization of debt issuance costs on debt. Interest expense also includes changes in the fair value of interest rate caps. Income Taxes. Income taxes consist of state and federal income taxes.
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.
Comparison of December 31, 2023, Versus December 31, 2022 The following discussion and table describe the changes in finance receivables by product type: • Small Loans (≤$2,500) – Small loans outstanding increased by $11.9 million, or 2.5%, to $493.5 million at December 31, 2023, from $481.6 million at December 31, 2022.
Comparison of December 31, 2024, Versus December 31, 2023 The following discussion and table describe the changes in finance receivables by product type: • Large Loans (>$2,500) – Large loans outstanding increased by $62.6 million, or 4.9%, to $1.3 billion at December 31, 2024, from $1.3 billion at December 31, 2023.
The decrease was due to increases in provision for credit losses of $34.9 million, interest expense of $33.2 million, and general and administrative expenses of $20.6 million, partially offset by an increase in revenue of $44.2 million and a decrease in income taxes of $9.3 million. Revenue.
The increase was due to an increase in revenue of $37.1 million and a decrease in provision for credit losses of $7.8 million, partially offset by increases in income taxes of $8.0 million, interest expense of $7.1 million, and general and administrative expenses of $4.6 million. Revenue.
Total revenue increased $44.2 million, or 8.7%, to $551.4 million in 2023, from $507.2 million in 2022. The components of revenue are explained in greater detail below. Interest and Fee Income . Interest and fee income increased $38.8 million, or 8.6%, to $489.7 million in 2023, from $450.9 million in 2022.
Total revenue increased $37.1 million, or 6.7%, to $588.5 million in 2024, from $551.4 million in 2023. The components of revenue are explained in greater detail below. Interest and Fee Income . Interest and fee income increased $39.2 million, or 8.0%, to $528.9 million in 2024, from $489.7 million in 2023.
The following table sets forth the dividends declared and paid for 2023: Period Declaration Date Record Date Payment Date Dividends Declared Per Common Share 1Q 23 February 8, 2023 February 22, 2023 March 15, 2023 $ 0.30 2Q 23 May 3, 2023 May 24, 2023 June 14, 2023 $ 0.30 3Q 23 August 2, 2023 August 23, 2023 September 14, 2023 $ 0.30 4Q 23 November 1, 2023 November 22, 2023 December 13, 2023 $ 0.30 Total $ 1.20 Regional Management Corp. | 2023 Annual Report on Form 10-K | 50 The Board declared and paid $11.9 million of cash dividends on our common stock during 2023.
The following table sets forth the dividends declared and paid for 2024: Period Declaration Date Record Date Payment Date Dividends Declared Per Common Share 1Q 24 February 7, 2024 February 22, 2024 March 14, 2024 $ 0.30 2Q 24 May 1, 2024 May 22, 2024 June 12, 2024 0.30 3Q 24 July 31, 2024 August 21, 2024 September 12, 2024 0.30 4Q 24 November 6, 2024 November 21, 2024 December 11, 2024 0.30 Total $ 1.20 The Board declared $12.3 million of cash dividends on our common stock during 2024.
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.
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.
Substantial adjustments to the allowance may be necessary if there are significant changes in forecasted economic conditions or loan portfolio performance. Regional Management Corp. | 2023 Annual Report on Form 10-K | 44 General and Administrative Expenses. Our financial results are impacted by the costs of operations and head office functions.
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.
Insurance income, net increased $1.0 million, or 2.4%, to $44.5 million in 2023, from $43.5 million in 2022. In both 2023 and 2022, personal property insurance premiums represented the largest component of aggregate earned insurance premiums, and life insurance claims expense represented the largest component of direct insurance expenses.
Insurance income, net decreased $3.8 million, or 8.6%, to $40.7 million in 2024, from $44.5 million in 2023. In both 2024 and 2023, personal property insurance premiums represented the largest component of aggregate earned insurance premiums, and life insurance claims expense represented the largest component of direct insurance expenses.
The increase was due to the growth of receivables in branches opened during 2022 and 2023 and from the transition of small loan customers to large loans, partially offset by credit tightening for disciplined growth. • Retail Loans – Retail loans outstanding decreased $5.8 million, or 60.4%, to $3.8 million at December 31, 2023, from $9.6 million at December 31, 2022.
The increase was due to growth in our higher-margin loan portfolio and the growth of receivables in branches opened during 2023 and 2024, partially offset by the transition of small loan customers to large loans. • Retail Loans – Retail loans outstanding decreased $2.7 million, or 71.9%, to $1.1 million at December 31, 2024, from $3.8 million at December 31, 2023.
The allowance for credit losses as a percentage of finance receivables increased to 10.6% as of December 31, 2023, from 10.5% as of December 31, 2022 due to changes in estimated future macroeconomic impacts on credit losses, including increasing the reserve rate for loans originated in our back-book portfolio.
The allowance for credit losses as a percentage of finance receivables decreased to 10.5% as of December 31, 2024, from 10.6% as of December 31, 2023 due to changes in estimated future macroeconomic impacts on credit losses.
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.
The decrease 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. Our increase in the allowance for credit losses was $12.1 million, an increase of $3.5 million from $8.6 million in 2023.
The 2022 and 2023 loan sales resulted in a net increase of 10 basis points to our 2023 net credit loss ratio. The 2022 loan sale increased our net credit loss ratio by 80 basis points in 2022. Delinquency Performance.
The 2022 and 2023 loan sales resulted in a net increase of 10 basis points to our 2023 net credit loss ratio. Delinquency Performance. Our delinquency rate increased to 7.7% as of December 31, 2024, from 6.9% as of December 31, 2023.
We continue to seek ways to diversify our funding sources. As of December 31, 2023, we had a funded debt-to-equity ratio (debt divided by total stockholders’ equity) of 4.3 to 1.0 and a stockholders’ equity ratio (total stockholders’ equity as a percentage of total assets) of 18.0%.
We continue to seek ways to diversify our funding sources. As of December 31, 2024, we had a funded debt-to-equity ratio of 4.1 to 1.0 and a stockholders’ equity ratio of 18.7%. Cash and cash equivalents decreased to $4.0 million as of December 31, 2024, from $4.5 million as of December 31, 2023.
The following is a summary of our revolving credit facilities as of December 31, 2023: Dollars in thousands Capacity Debt Balance Effective Interest Rate Facility Cash Reserve Requirement Restricted Cash Collection Maturity Date Senior (1) $ 420,000 $ 195,462 8.44% Sep 2024 RMR IV warehouse $ 125,000 $ 3,197 8.24% $ 253 $ 2,071 May 2026 RMR V warehouse $ 100,000 $ 26,718 8.34% $ 524 $ 4,288 Nov 2025 RMR VI warehouse $ 75,000 $ 15,953 7.94% $ 198 $ 1,621 Feb 2026 RMR VII warehouse $ 75,000 $ 4,216 8.44% $ 52 $ 487 Oct 2025 (1) See Note 19, “Subsequent Events” of the Notes to Consolidated Financial Statements in Part II, Item 8, “Financial Statements and Supplementary Data,” for information regarding the amendment of this facility following the end of the fiscal year.
The following is a summary of our revolving credit facilities as of December 31, 2024: Dollars in thousands Capacity Debt Balance Effective Interest Rate Facility Cash Reserve Requirement Restricted Cash Collection Maturity Date Senior $ 355,000 $ 219,339 7.7% $ — $ — Sep 2025 RMR IV warehouse $ 125,000 $ 4,792 7.5% $ 61 $ 256 May 2026 RMR V warehouse $ 100,000 $ 52,307 6.9% $ 325 $ 3,882 Nov 2027 RMR VI warehouse (1) $ 75,000 $ 2,443 7.2% $ 32 $ 171 Feb 2026 RMR VII warehouse $ 125,000 $ 37,023 7.0% $ 242 $ 2,746 Oct 2026 (1) See Note 21, “Subsequent Events” of the Notes to Consolidated Financial Statements in Part II, Item 8, “Financial Statements and Supplementary Data,” for information regarding the amendment of this facility following the end of the fiscal year.
Regional Management Corp. | 2023 Annual Report on Form 10-K | 51 Securitizations.
Regional Management Corp. | 2024 Annual Report on Form 10-K | 58
In addition, the revolving period maturities of our securitizations and warehouse credit facilities as of December 31, 2023 (each as described below within “Financing Arrangements”) range from February 2024 to September 2026.
In addition, the revolving period maturities of our securitizations and warehouse credit facilities as of December 31, 2024 (each as described below within “Financing Arrangements and Restricted Cash Reserve Accounts”) ranged from February 2025 to May 2027.
Going forward, we may experience 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 proactively diversified our funding over the past few years and continue to maintain a strong liquidity profile.
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.
The following table sets forth the average net finance receivables balance and average yield for our loan products: Average Net Finance Receivables for the Year Ended Average Yields for the Year Ended Dollars in thousands December 31, 2023 December 31, 2022 YoY % Inc (Dec) December 31, 2023 December 31, 2022 YoY % Inc (Dec) Small loans $ 462,116 $ 456,141 1.3 % 35.6 % 35.2 % 0.4 % Large loans 1,242,529 1,063,365 16.8 % 26.1 % 27.1 % (1.0 )% Retail loans 6,522 10,737 (39.3 )% 17.3 % 17.9 % (0.6 )% Total interest and fee yield $ 1,711,167 $ 1,530,243 11.8 % 28.6 % 29.5 % (0.9 )% Total originations decreased to $1.5 billion in 2023, from $1.6 billion in 2022, due to credit-tightening actions and the re-allocation of labor to collections in 2023.
The following table sets forth the average net finance receivables balance and average yield for our loan products: Average Net Finance Receivables for the Year Ended Average Yields for the Year Ended Dollars in thousands December 31, 2024 December 31, 2023 YoY % Inc (Dec) December 31, 2024 December 31, 2023 YoY % Inc (Dec) Large loans $ 1,278,683 $ 1,242,529 2.9 % 26.4 % 26.1 % 0.3 % Small loans 507,584 462,116 9.8 % 37.6 % 35.6 % 2.0 % Retail loans 2,214 6,522 (66.1 )% 16.1 % 17.3 % (1.2 )% Total $ 1,788,481 $ 1,711,167 4.5 % 29.6 % 28.6 % 1.0 % Total originations increased to $1.7 billion in 2024, from $1.5 billion in 2023.
This included 148.9 thousand small loan convenience checks, representing $221.8 million in net finance receivables. • Large Loans (>$2,500) – As of December 31, 2023, we had 246.6 thousand large installment loans outstanding, representing $1.3 billion in net finance receivables.
This included 69.5 thousand large loan convenience checks, representing $199.5 million in net finance receivables. • Small Loans (≤$2,500) – As of December 31, 2024, we had 314.9 thousand small installment loans outstanding, representing $554.7 million in net finance receivables.
As of December 31, 2023, we had $112.6 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 $551.5 million of unused capacity on our revolving credit facilities (subject to the borrowing base) as of December 31, 2023.
As of December 31, 2024 and December 31, 2023 we had $132.9 million and $108.1 million, respectively, of immediate availability to draw down cash from our revolving credit facilities. Our unused capacity on our revolving credit facilities (subject to the borrowing base) was $466.2 million and $551.5 million as of December 31, 2024 and December 31, 2023, respectively.
We continue to assess our legacy branch network for clear opportunities to 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.
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.
Regional Management Corp. | 2023 Annual Report on Form 10-K | 48 The following tables include delinquency balances by aging category and by product: Contractual Delinquency by Aging Dollars in thousands December 31, 2023 December 31, 2022 Current $ 1,493,341 84.3 % $ 1,431,502 84.2 % 1 to 29 days past due 155,196 8.8 % 148,048 8.7 % Delinquent accounts: 30 to 59 days 34,756 1.9 % 36,208 2.2 % 60 to 89 days 31,212 1.8 % 31,352 1.8 % 90 to 119 days 27,107 1.5 % 24,293 1.4 % 120 to 149 days 15,317 0.9 % 16,257 1.0 % 150 to 179 days 14,481 0.8 % 11,733 0.7 % Total contractual delinquency $ 122,873 6.9 % $ 119,843 7.1 % Total net finance receivables $ 1,771,410 100.0 % $ 1,699,393 100.0 % Contractual Delinquency by Product Dollars in thousands December 31, 2023 December 31, 2022 Small loans $ 42,151 8.5 % $ 43,703 9.1 % Large loans 80,136 6.3 % 75,349 6.2 % Retail loans 586 15.4 % 791 8.2 % Total contractual delinquency $ 122,873 6.9 % $ 119,843 7.1 % General and Administrative Expenses.
The following tables include contractual delinquency balances by aging category and by product: Contractual Delinquency by Aging Dollars in thousands December 31, 2024 December 31, 2023 Current $ 1,590,381 84.0 % $ 1,493,341 84.3 % 1 to 29 days past due 156,312 8.3 % 155,196 8.8 % Delinquent accounts: 30 to 59 days 36,948 1.9 % 34,756 1.9 % 60 to 89 days 35,242 1.9 % 31,212 1.8 % 90 to 119 days 28,085 1.5 % 27,107 1.5 % 120 to 149 days 23,987 1.3 % 15,317 0.9 % 150 to 179 days 21,580 1.1 % 14,481 0.8 % Total delinquency $ 145,842 7.7 % $ 122,873 6.9 % Total net finance receivables $ 1,892,535 100.0 % $ 1,771,410 100.0 % Contractual Delinquency by Product Dollars in thousands December 31, 2024 December 31, 2023 Large loans $ 88,054 6.6 % $ 80,136 6.3 % Small loans 57,595 10.4 % 42,151 8.5 % Retail loans 193 18.1 % 586 15.4 % Total $ 145,842 7.7 % $ 122,873 6.9 % General and Administrative Expenses.
Regional Management Corp. | 2023 Annual Report on Form 10-K | 47 The following table summarizes the components of insurance income, net: Insurance Premiums and Direct Expenses for the Year Ended Dollars in thousands December 31, 2023 December 31, 2022 YoY $ B(W) YoY % B(W) Earned premiums $ 59,830 $ 60,190 $ (360 ) (0.6 )% Claims, reserves, and certain direct expenses (15,301 ) (16,688 ) 1,387 8.3 % Insurance income, net $ 44,529 $ 43,502 $ 1,027 2.4 % Earned premiums during 2023 decreased by $0.4 million, and claims, reserves, and certain direct expenses decreased by $1.4 million compared to 2022.
The following table summarizes the components of insurance income, net: Insurance Premiums and Direct Expenses for the Year Ended Dollars in thousands December 31, 2024 December 31, 2023 YoY $ B(W) YoY % B(W) Earned premiums $ 57,312 $ 59,830 $ (2,518 ) (4.2 )% Claims, reserves, and certain direct expenses (16,617 ) (15,301 ) (1,316 ) (8.6 )% Insurance income, net $ 40,695 $ 44,529 $ (3,834 ) (8.6 )% Earned premiums during 2024 decreased by $2.5 million, and claims, reserves, and certain direct expenses increased by $1.3 million in each case compared to 2023.
As of December 31, 2023, we did not exercise our right to redeem the notes of our RMIT 2020-1 securitization, for which the revolving period ended in September 2023. 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.
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 increase was due to the growth of receivables in branches opened during 2022 and 2023, partially offset by credit tightening for disciplined growth and the transition of small loan customers to large loans. • Large Loans (>$2,500) – Large loans outstanding increased by $66.0 million, or 5.5%, to $1.3 billion at December 31, 2023, from $1.2 billion at December 31, 2022.
The increase was due to growth in our auto-secured portfolio, the growth of receivables in branches opened during 2023 and 2024, and the transition of small loan customers to large loans. • Small Loans (≤$2,500) – Small loans outstanding increased by $61.2 million, or 12.4%, to $554.7 million at December 31, 2024, from $493.5 million at December 31, 2023.
Other Income. Our other income consists primarily 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.
Other Income. Our other income consists primarily 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. In addition, interest income from restricted cash, commissions earned from the sale of club membership products, and investment income from restricted AFS securities are included in other income.
See Note 19, “Subsequent Events” of the Notes to Consolidated Financial Statements in Part II, Item 8, “Financial Statements and Supplementary Data,” for information regarding the amendment of the senior revolving credit facility following the end of the fiscal year. Dividends. The Board may in its discretion declare and pay cash dividends on our common stock.
See Note 21, “Subsequent Events” of the Notes to Consolidated Financial Statements in Part II, Item 8, “Financial Statements and Supplementary Data,” for information regarding the amendment of the RMR VI revolving warehouse credit facility following the end of the fiscal year. Regional Management Corp. | 2024 Annual Report on Form 10-K | 55 Dividends and Stock Repurchases.
Net Finance Receivables by Product Dollars in thousands December 31, 2023 December 31, 2022 YoY $ Inc (Dec) YoY % Inc (Dec) Small loans $ 493,473 $ 481,605 $ 11,868 2.5 % Large loans 1,274,137 1,208,185 65,952 5.5 % Retail loans 3,800 9,603 (5,803 ) (60.4 )% Total net finance receivables $ 1,771,410 $ 1,699,393 $ 72,017 4.2 % Number of branches at period end 346 345 1 0.3 % Net finance receivables per branch $ 5,120 $ 4,926 $ 194 3.9 % Regional Management Corp. | 2023 Annual Report on Form 10-K | 46 Comparison of the Year Ended December 31, 2023, Versus the Year Ended December 31, 2022 Net Income.
Regional Management Corp. | 2024 Annual Report on Form 10-K | 51 Net Finance Receivables by Product Dollars in thousands December 31, 2024 December 31, 2023 YoY $ Inc (Dec) YoY % Inc (Dec) Large loans $ 1,336,780 $ 1,274,137 $ 62,643 4.9 % Small loans 554,686 493,473 61,213 12.4 % Retail loans 1,069 3,800 (2,731 ) (71.9 )% Total $ 1,892,535 $ 1,771,410 $ 121,125 6.8 % Number of branches at period end 344 346 (2 ) (0.6 )% Net finance receivables per branch $ 5,502 $ 5,120 $ 382 7.5 % Comparison of the Year Ended December 31, 2024, Versus the Year Ended December 31, 2023 Net Income.
Collections on these finance receivables are remitted to restricted cash collection accounts, which totaled $109.9 million and $112.2 million as of December 31, 2023 and December 31, 2022, respectively. Our debt arrangements also contain various debt covenants. We were in compliance with all such debt covenants as of December 31, 2023. Revolving Credit Facilities.
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 $117.1 million and $109.9 million as of December 31, 2024 and December 31, 2023, respectively. Our debt arrangements also contain various debt covenants.
Our provision for credit losses increased $34.9 million, or 18.9%, to $220.0 million in 2023, from $185.1 million in 2022. The increase was due to an increase in net credit losses of $45.8 million, partially offset by a lower build in the allowance for credit losses of $10.9 million compared to 2022.
Our provision for credit losses decreased $7.8 million, or 3.6%, to $212.2 million in 2024, from $220.0 million in 2023. The decrease was due to a decrease in net credit losses of $11.3 million, partially offset by an incremental increase in the allowance for credit losses of $3.5 million compared to 2023.
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.
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.
Macroeconomic factors, including, but not limited to, inflationary pressures, interest rate trends, and impacts from current geopolitical events outside the U.S., may affect our business, liquidity, financial condition, and results of operations. Ongoing inflationary pressures and interest rate trends have continued to create economic uncertainty. Recent geopolitical events outside of the U.S. have also contributed to volatility in U.S. markets.
Macroeconomic factors, including, but not limited to, inflationary pressures, higher interest rates, and impacts from current geopolitical events outside the U.S., may affect our business, liquidity, financial condition, and results of operations. Due to moderating inflation and expectations for an improving economic environment, we have prudently increased the growth in our small loan portfolio.
Net cash provided by financing activities in 2023 was $26.4 million, compared to $205.6 million in 2022, a decrease of $179.1 million.
Net cash provided by financing activities in 2024 was $53.4 million, compared to $26.4 million in 2023, an increase of $27.0 million.
Net income decreased $35.3 million, or 68.8%, to $16.0 million in 2023, from $51.2 million in 2022.
Net income increased $25.3 million, or 158.3%, to $41.2 million in 2024, from $16.0 million in 2023.
A summary of the future material financial obligations requiring repayments as of December 31, 2023 is as follows: Future Material Financial Obligations by Period Dollars in thousands Next Twelve Months Beyond Twelve Months Total Principal payments on debt obligations $ 441,290 $ 954,733 $ 1,396,023 Interest payments on debt obligations 59,250 66,154 125,404 Operating lease obligations 9,681 33,285 42,966 Total $ 510,221 $ 1,054,172 $ 1,564,393 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.
A summary of the future material financial obligations requiring payments as of December 31, 2024 is as follows: Future Material Financial Obligations by Period Dollars in thousands Next Twelve Months Beyond Twelve Months Total Principal payments on debt obligations $ 466,626 $ 1,007,637 $ 1,474,263 Interest payments on debt obligations 65,822 76,813 142,635 Operating lease obligations 11,001 36,728 47,729 Total $ 543,449 $ 1,121,178 $ 1,664,627 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.
Net cash used in investing activities in 2023 was $278.7 million, compared to $447.3 million in 2022, a decrease of $168.6 million. The decrease was primarily due to decreased originations of finance receivables. Financing Activities. Financing activities consist of borrowings and payments on our outstanding indebtedness.
Net cash used in investing activities in 2024 was $316.1 million, compared to $278.7 million in 2023, an increase of $37.4 million. The increase 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.
The increase was primarily due to an increase in our average cost of debt as well as an increase in the average balance of our debt facilities. The average cost of debt increased to 5.00% in 2023, from 2.89% in 2022.
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 Regional Management Corp. | 2024 Annual Report on Form 10-K | 54 facilities. Our cost of funds increased 0.3% to 4.2% during 2024, from 3.9% during 2023.
Marketing expenses increased $0.4 million, or 2.6%, to $15.8 million in 2023, from $15.4 million in 2022 primarily due to higher digital marketing costs of $0.3 million. Other Expenses. Other expenses increased $3.3 million, or 7.9%, to $45.4 million in 2023, from $42.1 million in 2022, primarily due to increased investment in digital and technological capabilities of $2.4 million.
Other expenses increased $3.6 million, or 8.0%, to $49.1 million in 2024, from $45.4 million in 2023, primarily due to an increase in collections expense of $1.1 million and increased investment in digital and technological capabilities of $1.0 million. The prior-year period included insurance settlement proceeds of $1.0 million, which reduced other expenses.
Additionally, 2023 included reduction in force expenses of $1.7 million. These increases were partially offset by lower recruiter fees and relocation expenses of $0.7 million and $0.3 million, respectively, compared to 2022. Capitalized loan origination costs, which reduce personnel expenses, increased by $1.5 million compared to 2022. Occupancy.
The decrease was primarily due to higher capitalized loan origination costs, which reduce personnel expenses, of $2.2 million and reduction in force expenses of $1.7 million in 2023, partially offset by higher labor costs of $0.9 million. Occupancy.
The following is a summary of our securitizations as of December 31, 2023: Dollars in thousands Issue Amount Debt Balance Effective Interest Rate Restricted Cash Reserves Restricted Cash Collection Revolving Period Maturity Final Maturity Date RMIT 2020-1 $ 180,000 $ 145,290 2.97% $ 1,875 $ 12,050 Sep 2023 Oct 2030 RMIT 2021-1 $ 248,700 $ 248,916 2.08% $ 2,604 $ 20,812 Feb 2024 Mar 2031 RMIT 2021-2 $ 200,000 $ 200,192 2.30% $ 2,083 $ 15,555 Jul 2026 Aug 2033 RMIT 2021-3 $ 125,000 $ 125,202 3.88% $ 1,471 $ 15,866 Sep 2026 Oct 2033 RMIT 2022-1 $ 250,000 $ 250,374 3.59% $ 2,646 $ 20,327 Feb 2025 Mar 2032 RMIT 2022-2B (1) $ 200,000 $ 184,295 7.51% $ 2,326 $ 16,790 Oct 2024 Nov 2031 (1) RMR III retained $16.3 million of Class C fixed-rate, asset-backed notes that may be sold in whole or in part on the closing date.
The following is a summary of our securitizations as of December 31, 2024: Dollars in thousands Issue Amount Debt Balance Effective Interest Rate Restricted Cash Reserves Restricted Cash Collection Revolving Period Maturity Final Maturity Date RMIT 2020-1 $ 180,000 $ 46,769 4.3% $ 1,875 $ 4,849 Sep 2023 Oct 2030 RMIT 2021-1 $ 248,700 $ 101,550 2.7% $ 2,604 $ 9,969 Feb 2024 Mar 2031 RMIT 2021-2 $ 200,000 $ 200,191 2.3% $ 2,083 $ 16,871 Jul 2026 Aug 2033 RMIT 2021-3 $ 125,000 $ 125,202 3.9% $ 1,471 $ 16,698 Sep 2026 Oct 2033 RMIT 2022-1 $ 250,000 $ 250,374 3.6% $ 2,646 $ 21,469 Feb 2025 Mar 2032 RMIT 2024-1 $ 187,305 $ 187,788 6.2% $ 1,078 $ 17,332 May 2027 July 2036 RMIT 2024-2 $ 250,000 $ 250,558 5.3% $ 1,418 $ 22,892 Nov 2026 Dec 2033 RMC Reinsurance.
The decrease in earned premiums was primarily due to fewer active policies. The decrease in claims, reserves, and certain direct expenses was primarily due to a decrease in claims reserves. Other Income .
The decrease in earned premiums was primarily due to our strategic shifts in product and geographic mix which resulted in fewer active policies. The increase in claims, reserves, and certain direct expenses was primarily due to an increase in personal property insurance claims and reserves of $2.6 million related to hurricane activity. Other Income .
Average net finance receivables were $1.7 billion in 2023 and $1.5 billion in 2022. 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.
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 plan to add additional branches in new and existing states where it is favorable for us to conduct business. 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.
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.
Our debt arrangements described below, other than our senior revolving credit facility, are issued by each of our Regional Management Receivables (“ RMR ”) and Regional Management Issuance Trust (“ RMIT ”) SPEs, which are considered VIEs under GAAP. These debts are supported by the expected cash flows from the underlying collateralized finance receivables.
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.
The largest component of general and administrative expenses is personnel expense, which increased $15.6 million, or 11.1%, to $156.9 million in 2023, from $141.2 million in 2022. We had several offsetting increases and decreases in personnel expenses during 2023. Labor expenses and incentive costs increased $14.9 million and $1.7 million, respectively, compared to 2022.
The largest component of general and administrative expenses is personnel expense, which decreased $3.1 million, or 2.0%, to $153.8 million in 2024, from $156.9 million in 2023.
The year-over-year increase was due to an increase in variable rate funding costs, inclusive of a prior-year increase in the fair value of our interest rate caps of $13.1 million. The average balance of our debt facilities increased to $1.3 billion in 2023, from $1.2 billion in 2022. Income Taxes.
The average balance of our debt facilities increased to $1.4 billion in 2024, from $1.3 billion in 2023. Income Taxes. Income taxes increased $8.0 million, or 166.3%, to $12.8 million in 2024, from $4.8 million in 2023. The increase was primarily due to a $33.3 million increase in income before taxes compared to 2023.
Occupancy expenses increased $1.2 million, or 5.1%, to $25.0 million in 2023, from $23.8 million in 2022. The increase was primarily due to the growth of our state footprint and the addition of new branches since 2022. Marketing.
Occupancy expenses increased $0.8 million, or 3.2%, to $25.8 million in 2024, from $25.0 million in 2023, primarily due to increased rent expense of $0.9 million. Marketing.
Our unused capacity on our revolving credit facilities (subject to the borrowing base) was $551.5 million and $555.1 million as of December 31, 2023 and December 31, 2022, respectively. Our total debt was $1.4 billion as of both December 31, 2023 and the prior year-end.
Our debt balance was $1.5 billion as of December 31, 2024 compared to $1.4 billion the prior year-end.
Our product mix also varies to some extent by state, and we may further diversify our product mix in the Regional Management Corp. | 2023 Annual Report on Form 10-K | 43 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.
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.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+0 added−0 removed3 unchanged
Biggest changeAs of December 31, 2023, the balances and key terms of the credit facilities were as follows: Revolving Credit Facility Balance (in thousands) Interest Payment Frequency Rate Type Floor Margin Effective Interest Rate Senior $ 195,462 Monthly 1-month SOFR 0.50 % 3.00 % 8.44 % RMR IV warehouse 3,197 Monthly 1-month SOFR — 2.80 % 8.24 % RMR V warehouse 26,718 Monthly Conduit — 2.75 % 8.34 % RMR VI warehouse 15,953 Monthly 1-month SOFR — 2.50 % 7.94 % RMR VII warehouse 4,216 Monthly 1-month SOFR — 3.00 % 8.44 % Total $ 245,546 Based on the underlying rates and the outstanding balances as of December 31, 2023, 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.
Biggest changeAs of December 31, 2024, the balances and key terms of the credit facilities were as follows: Revolving Credit Facility Debt Balance (in thousands) Interest Payment Frequency Floor Margin Rate Type Effective Interest Rate Senior $ 219,339 Monthly 0.5 % 3.0 % 1-month SOFR 7.7 % RMR IV warehouse 4,792 Monthly — 2.8 % 1-month SOFR 7.5 % RMR V warehouse 52,307 Monthly — 2.1 % Conduit 6.9 % RMR VI warehouse 2,443 Monthly — 2.5 % 1-month SOFR 7.2 % RMR VII warehouse 37,023 Monthly — 2.4 % 1-month SOFR 7.0 % Total $ 315,904 Based on the underlying rates and the outstanding balances as of December 31, 2024, an increase of 100 basis points in the rates of our revolving credit facilities would result in approximately $3.2 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. Regional Management Corp. | 2023 Annual Report on Form 10-K | 54
The nature and amount of our debt may vary as a result of future business requirements, market conditions, and other factors. Regional Management Corp. | 2024 Annual Report on Form 10-K | 59
As of December 31, 2023, the interest rates on 82% 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 December 31, 2024, the interest rates on the securitizations, which account for 79% of our debt, 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.

Other RM 10-K year-over-year comparisons