GREENVILLE, S.C.--(BUSINESS WIRE)--Regional Management Corp. (NYSE:RM), a diversified specialty consumer finance company, today announced results for the fourth quarter and full year periods ended December 31, 2015.
Fourth Quarter 2015 Highlights
- Net income for the fourth quarter of 2015 was $7.4 million, a $0.9 million increase sequentially and an increase of $4.0 million from the prior-year period. Diluted earnings per share were $0.56 based on a diluted share count of 13.1 million. Excluding proceeds from the bulk sale of charged-off loans in the fourth quarter of 2015, non-GAAP net income and diluted earnings per share would have been $6.1 million and $0.47, respectively.
-
Total finance receivables as of December 31, 2015 were $628.4 million,
an increase of 4.5% sequentially and 15.1% from the prior year. All
core loan categories continue to grow:
- Large loan finance receivables as of December 31, 2015 were $146.6 million, an increase of 22.4% sequentially and 217.6% compared to the prior year.
- Branch small loan and convenience check finance receivables, collectively, as of December 31, 2015 were $338.2 million, an increase of 3.0% sequentially and 5.8% over the prior year.
- Total revenue for the fourth quarter of 2015 was $56.7 million, an increase of $1.6 million sequentially and a $2.9 million, or 5.4%, increase from the prior-year period. Revenue growth over the prior-year period was driven by a 15.1% increase in receivables, partially offset by an overall yield decline of 290 basis points. On a sequential basis, yield declined by 50 basis points, stabilizing from earlier quarters.
- Net charge-offs1 for the fourth quarter of 2015 were $11.8 million, or 7.7% of average finance receivables. In December, Regional Management completed the bulk sale of approximately $112 million of its existing charged-off loan portfolio, and committed to the sale of the forward flow of accounts charged off between November 2015 and October 2016. Excluding the bulk sale of charged-off loans, net charge-offs for the quarter were $13.7 million, or 9.0% of average finance receivables, decreasing from 13.9% in the prior-year period but increasing from 8.5% sequentially.
- Total delinquencies as a percentage of total finance receivables as of December 31, 2015 were 20.3%, an improvement sequentially from 22.4% as of September 30, 2015 and from 22.6% as of December 31, 2014, partially due to a shift in portfolio mix.
- In December, Regional Management entered into a credit agreement with Wells Fargo Bank, N.A., as lender, providing for a $75 million amortizing loan secured by automobile receivables. Regional Management is paying interest of 3.00% per annum on the loan balance, plus amortization of debt issue costs, until the loan balance has been fully repaid.
- Regional Management opened 9 new branches in the fourth quarter of 2015, including one branch in Virginia, its ninth U.S. state. As of December 31, 2015, Regional Management’s branch network consisted of 331 locations.
“2015 was a year of continuous improvement at Regional in all aspects of our business processes, and as a result, we enter 2016 in a significantly stronger position from where we started in 2015,” said Michael R. Dunn, Chief Executive Officer of Regional Management Corp. “Our core products, led most prominently by our large loans, drove the 15% year-over-year growth in our portfolio. By the end of 2015, we had more than tripled the amount in our large loan portfolio compared to the end of 2014, and it has become a key component of our business, now comprising 23% of our total loan portfolio and growing. Overall, we ended the year with our combined loan portfolio at $628 million, a sizable increase from the prior year and indicative of solid origination performance throughout the year.”
“We are also gratified by the improvements that were made during 2015 in our credit processes and portfolio quality. Charge-off rates showed improvement versus the prior year in the aggregate as well as on a portfolio basis,” continued Mr. Dunn. “Our delinquencies at the end of the fourth quarter were considerably more aligned with the profile of credit quality we expect to see going forward. In 2016, we will continue the focus on our core products and execution, while we also expect it to be a year of additional investment in operations in order to firmly position us for long-term sustainable and profitable growth.”
______________________
1 Net charge-offs are reported on an annualized basis.
Fourth Quarter 2015 Results
Finance receivables outstanding at December 31, 2015 were $628.4 million, a 15.1% increase from $546.2 million in the prior year. Finance receivables increased primarily due to an increase in both Regional Management’s small and large loan portfolios and the addition of 31 de novo branches since December 31, 2014.
For the fourth quarter ended December 31, 2015, Regional Management reported total revenue of $56.7 million, a 5.4% increase from $53.8 million in the prior-year period. Interest and fee income for the fourth quarter of 2015 was $51.3 million, a 4.8% increase from $49.0 million in the prior-year period, primarily due to an increase in the portfolios of both small and large loans compared to the prior-year period and partially offset by lower interest and fee yield, primarily in the convenience check and branch small loan portfolios. Insurance income for the fourth quarter of 2015 was $2.8 million, an increase of $0.6 million from the prior-year period.
Provision for credit losses in the fourth quarter of 2015 was $11.4 million versus $16.0 million in the prior-year period. Excluding the one-time bulk sale of charged-off loans, provision for credit losses in the fourth quarter of 2015 was $13.4 million. Net charge-offs were $11.8 million in the fourth quarter of 2015 ($13.7 million excluding the bulk sale of charged-off loans). Net charge-offs as a percentage of average finance receivables for the fourth quarter of 2015 (excluding the bulk sale) were 9.0%, an improvement from 13.9% in the prior-year period.
On a sequential basis, provision for credit losses (excluding the bulk sale) of $13.4 million was $0.7 million lower than the third quarter of 2015, predominantly due to improving credit metrics and a shifting portfolio mix.
General and administrative expenses for the fourth quarter of 2015 were $28.6 million, an increase of 0.5% from $28.4 million in the prior-year period. The increase was driven primarily by $0.8 million of additional branch expenses, partially offset by a $0.4 million decline in marketing costs. Branch expenses include changes in staffing and incentive plans for all branches, as well as the expenses associated with 31 branches added since December 31, 2014.
GAAP net income for the fourth quarter of 2015 was $7.4 million, a 117.9% increase compared to net income of $3.4 million in the prior-year period. Diluted earnings per share for the fourth quarter of 2015 were $0.56, an increase from $0.26 in the prior-year period. Excluding the bulk sale of charged-off loans, non-GAAP net income in the fourth quarter of 2015 would have been $6.1 million and diluted earnings per share would have been $0.47. For a reconciliation of non-GAAP financial measures to the nearest comparable GAAP financial measure, please refer to the reconciliation table accompanying this release.
Full Year 2015 Results
For the full year ended December 31, 2015, Regional Management reported total revenue of $217.3 million, a 6.1% increase from $204.7 million in the prior year. Interest and fee income for the full year ended December 31, 2015 was $195.8 million, a 6.0% increase from $184.8 million in the prior year, primarily due to an increase in the portfolios of both small and large loans compared to the prior year. Insurance income for the full year ended December 31, 2015 was $11.7 million, a 9.2% increase from the prior year.
Provision for credit losses for the full year ended December 31, 2015 was $47.3 million ($49.3 million excluding the bulk sale of charged-off loans) versus $69.1 million in the prior year. Net charge-offs of $50.4 million ($52.4 million excluding the bulk sale) in the full year ended December 31, 2015 exceeded the provision by $3.1 million as Regional Management released a portion of the allowance recorded in 2014 for convenience checks. Net charge-offs as a percentage of average finance receivables for the full year ended December 31, 2015 (excluding the bulk sale) was 9.1%, a decline from 10.7% in the prior year.
General and administrative expenses for the full year ended December 31, 2015 were $115.6 million, an increase of $18.8 million, or 19.4%, from $96.8 million in the prior year, driven by $9.3 million of additional branch expenses, $8.8 million of additional home office expenses and $0.7 million of additional marketing costs. Branch expenses include changes in staffing and incentive plans for all branches, as well as the expenses associated with branches added since December 31, 2013. The increase in home office expenses includes additional personnel, incentive plan changes and legal and consulting fees.
GAAP net income for the full year ended December 31, 2015 was $23.4 million, a 57.9% increase compared to GAAP net income of $14.8 million in the prior year, and diluted earnings per share for the full year ended December 31, 2015 were $1.79 compared to $1.14 in the prior year. Excluding certain non-operating expenses and the bulk sale of charged-off loans, non-GAAP net income for the full year ended December 31, 2015 totaled $23.8 million and non-GAAP diluted earnings per share were $1.82.
2016 De Novo Outlook
As of December 31, 2015, Regional Management’s branch network consisted of 331 locations. Regional Management opened 9 de novo branches in the fourth quarter of 2015 and, for the full year 2016, plans to open between 20 and 25 de novo branches.
Liquidity and Capital Resources
As of December 31, 2015, Regional Management had finance receivables of $628.4 million and outstanding debt of $411.2 million (consisting of $338.3 million of debt on its $538.0 million senior revolving credit facility and $72.9 million of debt on its $75 million amortizing loan).
Conference Call Information
Regional Management Corp. will host a conference call and webcast today at 5:00 PM ET to discuss these results.
The dial-in number for the conference call is (866) 318-8611 (toll-free) or (617) 399-5130 (direct), passcode 47330233. Please dial the number 10 minutes prior to the scheduled start time. A live webcast of the conference call will also be available on Regional Management’s website at www.RegionalManagement.com.
A replay will be available following the end of the call through Thursday, February 4, 2016, by telephone at (888) 286-8010 (toll-free) or (617) 801-6888 (direct), passcode 63457927. A webcast replay of the call will be available at http://www.RegionalManagement.com for one year following the call.
Forward-Looking Statements
This press release may contain various “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, which represent Regional Management Corp.’s expectations or beliefs concerning future events. Words such as “may,” “will,” “should,” “likely,” “anticipates,” “expects,” “intends,” “plans,” “projects,” “believes,” “estimates,” “outlook” and similar expressions may be used to identify these forward-looking statements. Such forward-looking statements are about matters that are inherently subject to risks and uncertainties, many of which are outside of the control of Regional Management. Factors that could cause actual results or performance to differ from the expectations expressed or implied in such forward-looking statements include, but are not limited to, the following: the continuation or worsening of adverse conditions in the global and domestic credit markets and uncertainties regarding, or the impact of, governmental responses to those conditions; changes in interest rates; risks related to acquisitions; risks related to opening new branches, including the ability or inability to open new branches as planned; risks inherent in making loans, including repayment risks and value of collateral, which risks may increase in light of adverse or recessionary economic conditions; recently-enacted or proposed legislation; the timing and amount of revenues that may be recognized by Regional Management; changes in current revenue and expense trends (including trends affecting delinquencies and charge-offs); changes in Regional Management’s markets and general changes in the economy (particularly in the markets served by Regional Management); changes in operating and administrative expenses; and the departure, transition or replacement of key personnel. Such factors and others are discussed in greater detail in Regional Management’s filings with the Securities and Exchange Commission. Regional Management will not and is not responsible for updating the information contained in this press release beyond the publication date, or for changes made to this document by wire services or Internet services.
About Regional Management Corp.
Regional Management Corp. (NYSE: RM) is a diversified specialty consumer finance company providing a broad array of loan products primarily to customers with limited access to consumer credit from banks, thrifts, credit card companies and other traditional lenders. Regional Management began operations in 1987 with four branches in South Carolina and has since expanded its branch network across South Carolina, Texas, North Carolina, Tennessee, Alabama, Oklahoma, New Mexico, Georgia and Virginia. Each of its loan products is structured on a fixed rate, fixed term basis with fully amortizing equal monthly installment payments and is repayable at any time without penalty. Regional Management’s loans are sourced through its multiple channel platform, including in its branches, through direct mail campaigns, independent and franchise automobile dealerships, online credit application networks, retailers and its consumer website. For more information, please visit http://www.RegionalManagement.com.
|
Regional Management Corp. and Subsidiaries Consolidated Statements of Income (Unaudited) (in thousands, except per share amounts) |
||||||||||||||||||||||||||||||||||||||
| Better (Worse) | Better (Worse) | |||||||||||||||||||||||||||||||||||||
| 4Q’15 | 4Q’14 |
$ |
% | YTD’15 | YTD’14 | $ | % | |||||||||||||||||||||||||||||||
| Revenue | ||||||||||||||||||||||||||||||||||||||
| Interest and fee income | $ | 51,320 | $ | 48,964 | $ | 2,356 | 4.8 | % | $ | 195,794 | $ | 184,797 | $ | 10,997 | 6.0 | % | ||||||||||||||||||||||
| Insurance income, net | 2,838 | 2,261 | 577 | 25.5 | % | 11,654 | 10,673 | 981 | 9.2 | % | ||||||||||||||||||||||||||||
| Other income | 2,527 | 2,567 |
(40 |
) |
(1.6 |
)% |
9,858 | 9,249 | 609 | 6.6 | % | |||||||||||||||||||||||||||
| Total revenue | 56,685 | 53,792 | 2,893 | 5.4 | % | 217,306 | 204,719 | 12,587 | 6.1 | % | ||||||||||||||||||||||||||||
| Expenses | ||||||||||||||||||||||||||||||||||||||
| Provision for credit losses | 11,449 | 15,950 | 4,501 | 28.2 | % | 47,348 | 69,057 | 21,709 | 31.4 | % | ||||||||||||||||||||||||||||
| Personnel | 17,283 | 17,099 |
(184 |
) |
(1.1 |
)% |
69,247 | 55,383 |
(13,864 |
) |
(25.0 |
)% |
||||||||||||||||||||||||||
| Occupancy | 4,722 | 4,157 |
(565 |
) |
(13.6 |
)% |
17,775 | 15,575 |
(2,200 |
) |
(14.1 |
)% |
||||||||||||||||||||||||||
| Marketing | 1,403 | 1,842 | 439 | 23.8 | % | 7,017 | 6,330 |
(687 |
) |
(10.9 |
)% |
|||||||||||||||||||||||||||
| Other | 5,142 | 5,298 | 156 | 2.9 | % | 21,559 | 19,488 |
(2,071 |
) |
(10.6 |
)% |
|||||||||||||||||||||||||||
| Total general and administrative | 28,550 | 28,396 |
(154 |
) |
(0.5 |
)% |
115,598 | 96,776 |
(18,822 |
) |
(19.4 |
)% |
||||||||||||||||||||||||||
| Interest expense | 4,350 | 3,780 | (570 | ) | (15.1 |
)% |
16,221 | 14,947 |
(1,274 |
) |
(8.5 |
)% |
||||||||||||||||||||||||||
| Income before income taxes | 12,336 | 5,666 | 6,670 | 117.7 | % | 38,139 | 23,939 | 14,200 | 59.3 | % | ||||||||||||||||||||||||||||
| Income taxes | 4,969 | 2,285 |
(2,684 |
) |
(117.5 |
)% |
14,774 | 9,137 |
(5,637 |
) |
(61.7 |
)% |
||||||||||||||||||||||||||
| Net income | $ | 7,367 | $ | 3,381 | $ | 3,986 | 117.9 | % | $ | 23,365 | $ | 14,802 | $ | 8,563 | 57.9 | % | ||||||||||||||||||||||
| Net income per common share: | ||||||||||||||||||||||||||||||||||||||
| Basic | $ | 0.57 | $ | 0.27 | $ | 0.30 | 111.1 | % | $ | 1.82 | $ | 1.17 | $ | 0.65 | 55.6 | % | ||||||||||||||||||||||
| Diluted | $ | 0.56 | $ | 0.26 | $ | 0.30 | 115.4 | % | $ | 1.79 | $ | 1.14 | $ | 0.65 | 57.0 | % | ||||||||||||||||||||||
| Weighted-average shares outstanding: | ||||||||||||||||||||||||||||||||||||||
| Basic | 12,891 | 12,744 | 147 | 1.2 | % | 12,849 | 12,701 | 148 | 1.2 | % | ||||||||||||||||||||||||||||
| Diluted | 13,105 | 12,955 | 150 | 1.2 | % | 13,074 | 12,951 | 123 | 0.9 | % | ||||||||||||||||||||||||||||
| Return on average assets (annualized) | 4.9 | % | 2.6 | % | 4.2 | % | 2.9 | % | ||||||||||||||||||||||||||||||
| Return on average equity (annualized) | 14.6 | % | 7.7 | % | 12.2 | % | 8.7 | % | ||||||||||||||||||||||||||||||
|
Regional Management Corp. and Subsidiaries Consolidated Balance Sheets (Unaudited) (in thousands, except par value amounts) |
|||||||||||||||||||
| Increase (Decrease) | |||||||||||||||||||
| 4Q’15 | 4Q’14 | $ | % | ||||||||||||||||
| Assets | |||||||||||||||||||
| Cash | $ | 7,654 | $ | 4,012 | $ | 3,642 | 90.8 | % | |||||||||||
| Gross finance receivables | 785,042 | 663,432 | 121,610 | 18.3 | % | ||||||||||||||
| Less unearned finance charges, insurance premiums, and commissions |
(156,598 |
) |
(117,240 |
) |
(39,358 |
) |
33.6 | % | |||||||||||
| Finance receivables | 628,444 | 546,192 | 82,252 | 15.1 | % | ||||||||||||||
| Allowance for credit losses |
(37,452 |
) |
(40,511 |
) |
3,059 | (7.6 |
)% |
||||||||||||
| Net finance receivables | 590,992 | 505,681 | 85,311 | 16.9 | % | ||||||||||||||
| Restricted cash | 10,506 | 1,901 | 8,605 | 452.7 | % | ||||||||||||||
| Property and equipment, net of accumulated depreciation | 10,441 | 8,905 | 1,536 | 17.2 | % | ||||||||||||||
| Deferred tax asset, net | — | 1,870 | (1,870 | ) |
(100.0 |
)% |
|||||||||||||
| Goodwill | 716 | 716 | — |
0.0 |
% |
||||||||||||||
| Intangible assets, net | 473 | 847 |
(374 |
) |
(44.2 |
)% |
|||||||||||||
| Repossessed assets at net realizable value | 307 | 556 |
(249 |
) |
(44.8 |
)% |
|||||||||||||
| Other assets | 7,979 | 5,782 | 2,197 | 38.0 | % | ||||||||||||||
| Total assets | $ | 629,068 | $ | 530,270 | $ | 98,798 | 18.6 | % | |||||||||||
| Liabilities and Stockholders’ Equity | |||||||||||||||||||
| Liabilities: | |||||||||||||||||||
| Long-term debt | $ | 411,177 | $ | 341,419 | $ | 69,758 | 20.4 | % | |||||||||||
| Accounts payable and accrued expenses | 12,089 | 10,528 | 1,561 | 14.8 | % | ||||||||||||||
| Deferred tax liability, net | 575 | — | 575 | 100.0 | % | ||||||||||||||
| Total liabilities | 423,841 | 351,947 | 71,894 | 20.4 | % | ||||||||||||||
| Commitments and Contingencies | |||||||||||||||||||
| Stockholders’ equity: | |||||||||||||||||||
| Preferred stock, $0.10 par value, 100,000 shares authorized, no shares issued or outstanding | — | — | — | — | |||||||||||||||
| Common stock, $0.10 par value, 1,000,000 shares authorized, 12,914 and 12,748 shares issued and outstanding at December 31, 2015 and 2014, respectively | 1,291 | 1,275 | 16 | 1.3 | % | ||||||||||||||
| Additional paid-in-capital | 89,178 | 85,655 | 3,523 | 4.1 | % | ||||||||||||||
| Retained earnings | 114,758 | 91,393 | 23,365 | 25.6 | % | ||||||||||||||
| Total stockholders’ equity | 205,227 | 178,323 | 26,904 | 15.1 | % | ||||||||||||||
| Total liabilities and stockholders’ equity | $ | 629,068 | $ | 530,270 | $ | 98,798 | 18.6 | % | |||||||||||
|
Regional Management Corp. and Subsidiaries Selected Financial Data (Unaudited) (in thousands, except per share amounts) |
||||||||||||||||||||||||
| Averages and Yields | ||||||||||||||||||||||||
| 4Q’15 | 3Q’15 | 4Q’14 | ||||||||||||||||||||||
|
Average Finance Receivables |
Average Yield
(Annualized) |
Average Finance Receivables |
Average Yield
(Annualized) |
Average Finance Receivables |
Average Yield
(Annualized) |
|||||||||||||||||||
| Branch small loans | $ | 151,983 |
43.1 |
% |
$ | 144,551 | 43.5 | % | $ | 119,097 | 48.4 | % | ||||||||||||
| Convenience checks | 180,395 | 41.4 | % | 178,940 | 42.8 | % | 192,951 | 46.8 | % | |||||||||||||||
| Large loans | 133,457 | 28.0 | % | 106,155 | 27.6 | % | 43,464 | 27.1 | % | |||||||||||||||
| Automobile loans | 122,049 | 18.4 | % | 133,857 | 18.8 | % | 159,047 | 19.5 | % | |||||||||||||||
| Retail loans | 26,453 | 19.4 | % | 25,022 | 19.1 | % | 26,493 | 18.7 | % | |||||||||||||||
| Total interest and fee yield | $ | 614,337 | 33.4 | % | $ | 588,525 | 33.8 | % | $ | 541,052 | 36.2 | % | ||||||||||||
| Total revenue yield | $ | 614,337 | 36.9 | % | $ | 588,525 | 37.4 | % | $ | 541,052 | 39.8 | % | ||||||||||||
|
Components of Increase in Interest and Fee Income
4Q’15 Compared to 4Q’14 Increase (Decrease) |
|||||||||||||||
| Volume | Rate | Net | |||||||||||||
| Branch small loans | $ | 3,670 | $ | (1,700 | ) | $ | 1,970 | ||||||||
| Convenience checks | (1,410 | ) | (2,513 | ) | (3,923 | ) | |||||||||
| Large loans | 6,301 | 102 | 6,403 | ||||||||||||
| Automobile loans | (1,725 | ) | (416 | ) | (2,141 | ) | |||||||||
| Retail loans | (2 | ) | 49 | 47 | |||||||||||
| Change in product mix | (274 | ) | 274 | — | |||||||||||
| Total increase (decrease) in interest and fee income | $ | 6,560 | $ | (4,204 | ) | $ | 2,356 | ||||||||
| Net Loans Originated (1) | ||||||||||||||||||||||||||||||
| 4Q’15 | 3Q’15 | 4Q’14 |
QoQ $
Inc (Dec) |
QoQ %
Inc (Dec) |
YoY $
Inc (Dec) |
YoY %
Inc (Dec) |
||||||||||||||||||||||||
| Branch small loans | $ | 81,074 | $ | 63,647 | $ | 80,171 | $ | 17,427 | 27.4 | % | $ | 903 | 1.1 | % | ||||||||||||||||
| Convenience checks | 83,230 | 80,675 | 95,330 | 2,555 | 3.2 | % | (12,100 | ) | (12.7 | ) % | ||||||||||||||||||||
| Large loans | 52,686 | 44,911 | 17,737 | 7,775 | 17.3 | % | 34,949 | 197.0 | % | |||||||||||||||||||||
| Automobile loans | 7,563 | 7,665 | 13,516 | (102 | ) | (1.3 | ) % | (5,953 | ) | (44.0 | ) % | |||||||||||||||||||
| Retail loans | 8,978 | 7,868 | 7,634 | 1,110 | 14.1 | % | 1,344 | 17.6 | % | |||||||||||||||||||||
| Total net loans originated | $ | 233,531 | $ | 204,766 | $ | 214,388 | $ | 28,765 | 14.0 | % | $ | 19,143 | 8.9 | % | ||||||||||||||||
|
(1) Represents the balance of loan origination and refinancing net of unearned finance charges |
||||||||||||||||||||||||||||||
| Other Key Metrics | |||||||||||||||
| 4Q’15 | 3Q’15 | 4Q’14 | |||||||||||||
| Net charge-offs | $ | 11,783 | $ | 12,470 | $ | 18,740 | |||||||||
| Net charge-offs (bulk sale of charged-off loans) | 1,964 | — | — | ||||||||||||
| Net charge-offs (excluding sale) | $ | 13,747 | $ | 12,470 | $ | 18,740 | |||||||||
| Percentage of average finance receivables (annualized) | 9.0 | % | 8.5 | % | 13.9 | % | |||||||||
| Provision for credit losses | $ | 11,449 | $ | 14,085 | $ | 15,950 | |||||||||
| Provision for credit losses (bulk sale of charged-off loans) | 1,964 | — | — | ||||||||||||
| Provision for credit losses (excluding sale) | $ | 13,413 | $ | 14,085 | $ | 15,950 | |||||||||
| Percentage of average finance receivables (annualized) | 8.7 | % | 9.6 | % | 11.8 | % | |||||||||
| Percentage of total revenue | 23.7 | % | 25.6 | % | 29.7 | % | |||||||||
| General and administrative expenses | $ | 28,550 | $ | 26,182 | $ | 28,396 | |||||||||
| Percentage of average finance receivables (annualized) | 18.6 | % | 17.8 | % | 21.0 | % | |||||||||
| Percentage of total revenue | 50.4 | % | 47.5 | % | 52.8 | % | |||||||||
| Same store results: | |||||||||||||||
| Finance receivables at period-end | $ | 599,415 | $ | 573,221 | $ | 504,697 | |||||||||
| Finance receivable growth rate | 11.7 | % | 7.1 | % | -6.0 | % | |||||||||
| Number of branches in calculation | 296 | 293 | 264 | ||||||||||||
| Finance Receivables by Product | ||||||||||||||||||||||||||||||
| 4Q’15 | 3Q’15 |
QoQ $
Inc (Dec) |
QoQ %
Inc (Dec) |
4Q’14 |
YoY $
Inc (Dec) |
YoY %
Inc (Dec) |
||||||||||||||||||||||||
| Branch small loans | $ | 157,755 | $ | 147,664 | $ | 10,091 | 6.8 | % | $ | 128,217 | $ | 29,538 | 23.0 | % | ||||||||||||||||
| Convenience checks | 180,402 | 180,543 | (141 | ) | (0.1 | ) % | 191,316 | (10,914 | ) | (5.7 | ) % | |||||||||||||||||||
| Large loans | 146,553 | 119,731 | 26,822 | 22.4 | % | 46,147 | 100,406 | 217.6 | % | |||||||||||||||||||||
| Total core loans | 484,710 | 447,938 | 36,772 | 8.2 | % | 365,680 | 119,030 | 32.6 | % | |||||||||||||||||||||
| Automobile loans | 116,109 | 128,131 | (12,022 | ) | (9.4 | ) % | 154,382 | (38,273 | ) | (24.8 | ) % | |||||||||||||||||||
| Retail loans | 27,625 | 25,539 | 2,086 | 8.2 | % | 26,130 | 1,495 | 5.7 | % | |||||||||||||||||||||
| Total finance receivables | $ | 628,444 | $ | 601,608 | $ | 26,836 | 4.5 | % | $ | 546,192 | $ | 82,252 | 15.1 | % | ||||||||||||||||
| Number of branches at period end | 331 | 322 | 9 | 2.8 | % | 300 | 31 | 10.3 | % | |||||||||||||||||||||
| Average finance receivables per branch | $ | 1,899 | $ | 1,868 | $ | 31 | 1.7 | % | $ | 1,821 | $ | 78 | 4.3 | % | ||||||||||||||||
| 4Q’14 | 3Q’14 |
QoQ $
Inc (Dec) |
QoQ %
Inc (Dec) |
|||||||||||||||||||||||||||
| Total finance receivables | $ | 546,192 | $ | 543,353 | $ | 2,839 | 0.5 | % | ||||||||||||||||||||||
| Contractual Delinquency by Aging | |||||||||||||||||||||
| 4Q’15 | 3Q’15 | 4Q’14 | |||||||||||||||||||
| Allowance for credit losses | $ | 37,452 | 6.0 % | $ | 37,786 | 6.3 % | $ | 40,511 | 7.4 % | ||||||||||||
| Current | 500,591 | 79.7 % | 466,847 | 77.6 % | 422,342 | 77.4 % | |||||||||||||||
| 1 to 29 days past due | 82,589 | 13.1 % | 90,626 | 15.1 % | 82,714 | 15.1 % | |||||||||||||||
| Delinquent accounts: | |||||||||||||||||||||
| 30 to 59 days | 15,654 | 2.5 % | 17,094 | 2.8 % | 15,951 | 2.9 % | |||||||||||||||
| 60 to 89 days | 9,858 | 1.6 % | 9,952 | 1.7 % | 9,624 | 1.8 % | |||||||||||||||
| 90 to 119 days | 7,696 | 1.1 % | 6,874 | 1.1 % | 6,899 | 1.2 % | |||||||||||||||
| 120 to 149 days | 6,678 | 1.1 % | 5,766 | 1.0 % | 4,988 | 0.9 % | |||||||||||||||
| 150 to 179 days | 5,378 | 0.9 % | 4,449 | 0.7 % | 3,674 | 0.7 % | |||||||||||||||
| Total contractual delinquency | $ | 45,264 | 7.2 % | $ | 44,135 | 7.3 % | $ | 41,136 | 7.5 % | ||||||||||||
| Total finance receivables | $ | 628,444 | 100.0 % | $ | 601,608 | 100.0 % | $ | 546,192 | 100.0 % | ||||||||||||
| 1 day and over past due | $ | 127,853 | 20.3 % | $ | 134,761 | 22.4 % | $ | 123,850 | 22.6 % | ||||||||||||
| Contractual Delinquency by Product | ||||||||||||||||||||||||
| 4Q’15 | 3Q’15 | 4Q’14 | ||||||||||||||||||||||
| Branch small loans | $ | 14,765 | 9.4 | % | $ | 14,166 | 9.6 | % | $ | 10,247 | 8.0 | % | ||||||||||||
| Convenience checks | 15,420 | 8.5 | % | 15,605 | 8.6 | % | 17,165 | 9.0 | % | |||||||||||||||
| Large loans | 4,945 | 3.4 | % | 3,829 | 3.2 | % | 2,106 | 4.6 | % | |||||||||||||||
| Automobile loans | 8,713 | 7.5 | % | 9,327 | 7.3 | % | 10,302 | 6.7 | % | |||||||||||||||
| Retail loans | 1,421 | 5.1 | % | 1,208 | 4.7 | % | 1,316 | 5.0 | % | |||||||||||||||
| Total contractual delinquency | $ | 45,264 | 7.2 | % | $ | 44,135 | 7.3 | % | $ | 41,136 | 7.5 | % | ||||||||||||
| Quarterly Trend | ||||||||||||||||||||||||||||||
| 4Q’14 | 1Q’15 | 2Q’15 | 3Q’15 | 4Q’15 |
QoQ $
B(W) |
YoY $
B(W) |
||||||||||||||||||||||||
| Revenue | ||||||||||||||||||||||||||||||
| Interest and fee income | $ | 48,964 | $ | 47,065 | $ | 47,668 | $ | 49,741 | $ | 51,320 | $ | 1,579 | $ | 2,356 | ||||||||||||||||
| Insurance income, net | 2,261 | 2,929 | 3,120 | 2,767 | 2,838 | 71 | 577 | |||||||||||||||||||||||
| Other income | 2,567 | 2,530 | 2,213 | 2,588 | 2,527 | (61 | ) | (40 | ) | |||||||||||||||||||||
| Total revenue | 53,792 | 52,524 | 53,001 | 55,096 | 56,685 | 1,589 | 2,893 | |||||||||||||||||||||||
| Expenses | ||||||||||||||||||||||||||||||
| Provision for credit losses | 15,950 | 9,712 | 12,102 | 14,085 | 11,449 | 2,636 | 4,501 | |||||||||||||||||||||||
| Personnel | 17,099 | 19,760 | 16,211 | 15,993 | 17,283 | (1,290 | ) | (184 | ) | |||||||||||||||||||||
| Occupancy | 4,157 | 4,165 | 4,298 | 4,590 | 4,722 | (132 | ) | (565 | ) | |||||||||||||||||||||
| Marketing | 1,842 | 2,471 | 2,009 | 1,134 | 1,403 | (269 | ) | 439 | ||||||||||||||||||||||
| Other | 5,298 | 6,227 | 5,725 | 4,465 | 5,142 | (677 | ) | 156 | ||||||||||||||||||||||
| Total general and administrative | 28,396 | 32,623 | 28,243 | 26,182 | 28,550 | (2,368 | ) | (154 | ) | |||||||||||||||||||||
| Interest expense | 3,780 | 3,604 | 3,932 | 4,335 | 4,350 | (15 | ) | (570 | ) | |||||||||||||||||||||
| Income before income taxes | 5,666 | 6,585 | 8,724 | 10,494 | 12,336 | 1,842 | 6,670 | |||||||||||||||||||||||
| Income taxes | 2,285 | 2,502 | 3,316 | 3,987 | 4,969 | (982 | ) | (2,684 | ) | |||||||||||||||||||||
| Net income | $ | 3,381 | $ | 4,083 | $ | 5,408 | $ | 6,507 | $ | 7,367 | $ | 860 | $ | 3,986 | ||||||||||||||||
| Net income per common share: | ||||||||||||||||||||||||||||||
| Basic | $ | 0.27 | $ | 0.32 | $ | 0.42 | $ | 0.51 | $ | 0.57 | $ | 0.06 | $ | 0.30 | ||||||||||||||||
| Diluted | $ | 0.26 | $ | 0.31 | $ | 0.41 | $ | 0.50 | $ | 0.56 | $ | 0.06 | $ | 0.30 | ||||||||||||||||
| Weighted-average shares outstanding: | ||||||||||||||||||||||||||||||
| Basic | 12,744 | 12,838 | 12,845 | 12,881 | 12,891 | 10 | 147 | |||||||||||||||||||||||
| Diluted | 12,955 | 13,061 | 13,078 | 13,111 | 13,105 | (6 | ) | 150 | ||||||||||||||||||||||
| 4Q’14 | 1Q’15 | 2Q’15 | 3Q’15 | 4Q’15 |
QoQ $
Inc (Dec) |
YoY $
Inc (Dec) |
||||||||||||||||||||||||
| Total assets | 530,270 | 507,742 | 560,981 | 588,966 | 629,068 | 40,102 | 98,798 | |||||||||||||||||||||||
| Finance receivables | 546,192 | 525,907 | 572,525 | 601,608 | 628,444 | 26,836 | 82,252 | |||||||||||||||||||||||
| Allowance for credit losses | 40,511 | 36,950 | 36,171 | 37,786 | 37,452 | (334 | ) | (3,059 | ) | |||||||||||||||||||||
| Long-term debt | 341,419 | 312,538 | 359,491 | 379,617 | 411,177 | 31,560 | 69,758 | |||||||||||||||||||||||
| Headcount Trend | ||||||||||||||||||||||
| 4Q’14 | 1Q’15 | 2Q’15 | 3Q’15 | 4Q’15 |
QoQ
Inc (Dec) |
YoY
Inc (Dec) |
||||||||||||||||
| Legacy branch headcount | 1,335 | 1,273 | 1,205 | 1,208 | 1,208 | — | (127 | ) | ||||||||||||||
| 2015 new branches | 15 | 40 | 48 | 72 | 24 | 72 | ||||||||||||||||
| Total branch headcount | 1,335 | 1,288 | 1,245 | 1,256 | 1,280 | 24 | (55 | ) | ||||||||||||||
| Home office headcount | 105 | 125 | 120 | 129 | 133 | 4 | 28 | |||||||||||||||
| Total headcount | 1,440 | 1,413 | 1,365 | 1,385 | 1,413 | 28 | (27 | ) | ||||||||||||||
| Number of branches | 300 | 306 | 316 | 322 | 331 | 9 | 31 | |||||||||||||||
| General & Administrative Expenses Trend | ||||||||||||||||||||||||||||||
| 4Q’14 | 1Q’15 | 2Q’15 | 3Q’15 | 4Q’15 |
QoQ $
B(W) |
YoY $
B(W) |
||||||||||||||||||||||||
| Legacy branch G&A expenses | $ | 18,020 | $ | 19,284 | $ | 16,596 | $ | 17,946 | $ | 17,361 | $ | 585 | $ | 659 | ||||||||||||||||
| 2015 new branches | 86 | 498 | 930 | 1,501 | (571 | ) | (1,501 | ) | ||||||||||||||||||||||
| Total branch G&A expenses | 18,020 | 19,370 | 17,094 | 18,876 | 18,862 | 14 | (842 | ) | ||||||||||||||||||||||
| Marketing | 1,842 | 2,471 | 2,009 | 1,134 | 1,403 | (269 | ) | 439 | ||||||||||||||||||||||
| Home office G&A expenses | 8,534 | 10,782 | 9,140 | 6,172 | 8,285 | (2,113 | ) | 249 | ||||||||||||||||||||||
| Total G&A expenses | $ | 28,396 | $ | 32,623 | $ | 28,243 | $ | 26,182 | $ | 28,550 | $ | (2,368 | ) | $ | (154 | ) | ||||||||||||||
| Averages and Yields | ||||||||||||||||
| YTD’15 | YTD’14 | |||||||||||||||
|
Average Finance Receivables |
Average Yield |
Average Finance Receivables |
Average Yield | |||||||||||||
| Branch small loans | $ | 138,253 | 44.3 | % | $ | 110,531 | 48.0 | % | ||||||||
| Convenience checks | 178,692 | 43.6 | % | 178,181 | 45.8 | % | ||||||||||
| Large loans | 93,243 | 27.6 | % | 42,887 | 26.9 | % | ||||||||||
| Automobile loans | 137,249 | 19.0 | % | 169,607 | 19.7 | % | ||||||||||
| Retail loans | 25,392 | 18.8 | % | 28,295 | 18.4 | % | ||||||||||
| Total interest and fee yield | $ | 572,829 | 34.2 | % | $ | 529,501 | 34.9 | % | ||||||||
| Total revenue yield | $ | 572,829 | 37.9 | % | $ | 529,501 | 38.7 | % | ||||||||
|
Components of Increase in Interest and Fee Income
YTD’15 Compared to YTD’14 Increase (Decrease) |
|||||||||||||||
| Volume | Rate | Net | |||||||||||||
| Branch small loans | $ | 12,529 | $ | (4,289 | ) | $ | 8,240 | ||||||||
| Convenience checks | 233 | (3,981 | ) | (3,748 | ) | ||||||||||
| Large loans | 13,884 | 322 | 14,206 | ||||||||||||
| Automobile loans | (6,180 | ) | (1,106 | ) | (7,286 | ) | |||||||||
| Retail loans | (543 | ) | 128 | (415 | ) | ||||||||||
| Change in product mix | (4,974 | ) | 4,974 | — | |||||||||||
| Total increase (decrease) in interest and fee income | $ | 14,949 | $ | (3,952 | ) | $ | 10,997 | ||||||||
| Net Loans Originated (1) | |||||||||||||||||
| YTD’15 | YTD’14 |
YTD $
Inc (Dec) |
YTD %
Inc (Dec) |
||||||||||||||
| Branch small loans | $ | 276,908 | $ | 240,465 | $ | 36,443 | 15.2 | % | |||||||||
| Convenience checks | 315,303 | 334,115 | (18,812 | ) | (5.6 | ) % | |||||||||||
| Large loans | 173,560 | 50,731 | 122,829 | 242.1 | % | ||||||||||||
| Automobile loans | 41,621 | 64,842 | (23,221 | ) | (35.8 | ) % | |||||||||||
| Retail loans | 31,710 | 29,984 | 1,726 | 5.8 | % | ||||||||||||
| Total net loans originated | $ | 839,102 | $ | 720,137 | $ | 118,965 | 16.5 | % | |||||||||
|
(1) Represents the balance of loan origination and refinancing net of unearned finance charges |
|||||||||||||||||
| Other Key Metrics | ||||||||||
| YTD’15 | YTD’14 | |||||||||
| Net charge-offs | $ | 50,407 | $ | 58,635 | ||||||
| Net charge-offs (bulk sale of charged-off loans) | 1,964 | — | ||||||||
| Net charge-offs (180+ policy change) | — | (2,106 | ) | |||||||
| Net charge-offs (excluding policy change and sale) | $ | 52,371 | $ | 56,529 | ||||||
| Percentage of average finance receivables | 9.1 | % | 10.7 | % | ||||||
| Provision for credit losses | $ | 47,348 | $ | 69,057 | ||||||
| Provision for credit losses (bulk sale of charged-off loans) | 1,964 | — | ||||||||
| Provision for credit losses (excluding sale) | $ | 49,312 | $ | 69,057 | ||||||
| Percentage of average finance receivables | 8.6 | % | 13.0 | % | ||||||
| Percentage of total revenue | 22.7 | % | 33.7 | % | ||||||
| General and administrative expenses | $ | 115,598 | $ | 96,776 | ||||||
| Percentage of average finance receivables | 20.2 | % | 18.3 | % | ||||||
| Percentage of total revenue | 53.2 | % | 47.3 | % | ||||||
Because it adjusts for certain non-operating and non-cash items, the Company believes that non-GAAP measures are useful to investors as supplemental financial measures that, when viewed with its GAAP financial information, provide information regarding trends in the Company’s results of operations and credit metrics, which is intended to help investors meaningfully evaluate and compare the Company’s results of operations and credit metrics between periods.
| Non-GAAP Reconciliation | |||||||||||||
| Q4 ‘15 | Adjustments | Non-GAAP | |||||||||||
| Provision for credit losses | $ | 11,449 | $ |
1,964 |
(1) |
$ | 13,413 | ||||||
| Income taxes | $ | 4,969 | $ | (746 | )(7) | $ | 4,223 | ||||||
| Net income | $ | 7,367 | $ | (1,218 | ) | $ | 6,149 | ||||||
| Diluted net income per common share | $ | 0.56 | $ | (0.09 | ) | $ | 0.47 | ||||||
| Non-GAAP Reconciliation | |||||||||||||
| YTD’15 | Adjustments | Non-GAAP | |||||||||||
| General and administrative expenses | $ | 115,598 | $ | (2,676 | )(2)(3)(4) | $ | 112,922 | ||||||
| Provision for credit losses | $ | 47,348 | $ |
1,964 |
(1) |
$ | 49,312 | ||||||
| Income taxes | $ | 14,774 | $ |
271 |
(7) |
$ | 15,045 | ||||||
| Net income | $ | 23,365 | $ | 441 | $ | 23,806 | |||||||
| Diluted net income per common share | $ | 1.79 | $ | 0.03 | $ | 1.82 | |||||||
| Non-GAAP Reconciliation | |||||||||||||
| YTD’14 | Adjustments | Non-GAAP | |||||||||||
| General and administrative expenses | $ | 96,776 | $ | (1,538 | )(3)(5)(6) | $ | 95,238 | ||||||
| Income taxes | $ | 9,137 | $ |
577 |
(7) |
$ | 9,714 | ||||||
| Net income | $ | 14,802 | $ | 961 | $ | 15,763 | |||||||
| Diluted net income per common share | $ | 1.14 | $ | 0.08 | $ | 1.22 | |||||||
|
(1) |
Benefit related to bulk sale of charged-off loans of $1,964 |
|
|
(2) |
Exclude executive retirement agreement costs of $533 |
|
|
(3) |
Exclude loan system conversion costs of $613 and $1,772 for YTD’15 and YTD’14 |
|
|
(4) |
Exclude CEO equity award costs of $1,530 |
|
|
(5) |
Benefit related to vacation policy change of $1,388 |
|
|
(6) |
Exclude CEO separation costs of $1,154 |
|
|
(7) |
Tax effect of the adjustments |