Business Wire | Nov 2, 2021 04:15PM EDT

Regional Management Corp. Announces Third Quarter 2021 Results

Nov. 02, 2021

GREENVILLE, S.C.--(BUSINESS WIRE)--Nov. 02, 2021--Regional Management Corp. (NYSE: RM), a diversified consumer finance company, today announced results for the third quarter ended September 30, 2021.

"We had another fantastic quarter, as our strategic initiatives continued to fuel record growth," said Robert W. Beck, President and Chief Executive Officer of Regional Management Corp. "Our sustained focus on geographic expansion, digital investment, and product and channel development enabled us to reach new consumers and gain market share, driving record sequential portfolio growth of $130.8 million in the quarter. Our portfolio exceeded $1.3 billion at quarter-end, generating record revenue of $111.5 million, up 23% year-over-year. As a result, we posted $22.2 million of net income and very attractive returns of 7.1% ROA and 31.6% ROE."

"While the successes of our omni-channel model are evident, equally important has been our ability to maintain a superior credit profile as we grow," added Mr. Beck. "Controlled growth with stable credit has been made possible by our commitment to underwriting to our rigorous pre-pandemic standards and our ongoing investments in our custom scorecards. We have further protected our portfolio with the addition of enhanced verification processes implemented at the outset of the pandemic and the use of alternative data in our risk and response models to adjust for the impact of stimulus and forbearance programs. Across all product lines, FICO scores have increased since early 2020 and our highest-scoring customers make up a larger portion of our overall portfolio."

"Looking ahead, we remain eager to bring our financial products to millions of new consumers, as we introduce end-to-end digital lending in the next few months and expand to five to seven new states by the end of 2022," continued Mr. Beck. "We have built a growth company with a focused, omni-channel strategy and proven, consistent execution. At the same time, we have de-risked the business by investing heavily in our custom underwriting models and shifting more than 82% of our portfolio to higher-quality loans at or below 36% APR, enabling us to maintain a stable credit profile as we grow and positioning us to deliver predictable, superior results for our shareholders."

Third Quarter 2021 Highlights

* Net income for the third quarter of 2021 was $22.2 million and diluted earnings per share was $2.11, compared to net income of $11.2 million and diluted earnings per share of $1.01 in the prior-year period.

* Net finance receivables as of September 30, 2021 hit another all-time high at $1.3 billion, a record increase of $254.7 million, or 24.0%, from the prior-year period.

- Total core small and large loan net finance receivables increased $263.4 million, or 25.4%, compared to the prior-year period.

- Large loan net finance receivables of $882.5 million increased $226.6 million, or 34.5%, from the prior-year period and represented 67.2% of the total loan portfolio. Small loan net finance receivables were $419.6 million, an increase of 9.6% from the prior-year period.

- Record loan originations of $420.7 million in the third quarter of 2021, an increase of $108.1 million, or 34.6%, from the prior-year period.

- Record digitally-sourced originations of $48.1 million in the third quarter of 2021.

* Total revenue for the third quarter of 2021 was a record $111.5 million, an increase of $20.9 million, or 23.1%, from the prior-year period.

- Interest and fee income increased $18.0 million, or 22.2%, primarily due to higher average net finance receivables and improved interest and fee yield.

- Insurance income, net increased $2.6 million, or 37.3%, driven by an increase in premium revenue, partially offset by an increase in expected life and non-file insurance claims.

* Provision for credit losses for the third quarter of 2021 was $26.1 million, an increase of $4.0 million, or 18.1%, from the prior-year period. The provision for credit losses for the third quarter of 2021 included a release in the allowance for credit losses of $2.0 million related to the expected economic impact of the COVID-19 pandemic and a net $12.7 million incremental build in reserves related to portfolio growth.

- Allowance for credit losses was $150.1 million as of September 30, 2021, including a $15.5 million allowance for credit losses associated with COVID-19.

* Annualized net credit losses as a percentage of average net finance receivables for the third quarter of 2021 were 5.0%, the lowest in the company's history as a public company and a 280 basis point improvement compared to 7.8% in the prior-year period.

* As of September 30, 2021, 30+ day contractual delinquencies totaled $61.3 million, or 4.7% of net finance receivables, consistent with the prior-year period. The 30+ day contractual delinquency is well below the company's $150.1 million allowance for credit losses as of September 30, 2021.

* The company expanded its operations to the state of Utah in the third quarter. In addition, during the third quarter, the company assessed its legacy branch network and determined to close 31 branches in the fourth quarter where clear opportunities existed to consolidate operations into a larger branch in close proximity. This branch optimization is consistent with the company's omni-channel strategy and builds upon the company's recent successes in entering new states with a lighter branch footprint, while still providing customers with best-in-class service. The company estimates total expenses of $1.6 million associated with the branch optimization, of which $0.7 million was incurred in the third quarter and $0.9 million is estimated in the fourth quarter. The branch optimization will generate approximately $2.2 million in annual savings, which the company will reinvest in its expansion into new states.

* General and administrative expenses for the third quarter of 2021 were $47.8 million, an increase of $4.0 million, or 9.1%, from the prior-year period due to ongoing investment in personnel, marketing, and digital capabilities to support the company's growth strategy. General and administrative expenses for the third quarter of 2021 included $0.7 million of expenses related to branch optimization and a $1.5 million benefit related to the incremental deferrals of digital loan origination costs.

* The operating expense ratio (annualized general and administrative expenses as a percentage of average net finance receivables) for the third quarter of 2021 was 15.4%, a 160 basis point improvement compared to the prior-year period. The operating expense ratio was inclusive of a 30 basis point impact related to branch optimization and a 50 basis point improvement related to the incremental deferrals of digital loan origination costs.

* As of September 30, 2021, the company had total unused capacity on its revolving credit facilities of $722 million to fund future growth, subject to the borrowing base, and available liquidity of $194 million, including unrestricted cash on hand and immediate availability to draw down cash from its revolving credit facilities.

* In the third quarter of 2021, the company increased its stock repurchase program announced in May 2021 from $30 million to $50 million and repurchased 390,112 shares of its common stock at a weighted-average price of $56.32 per share. The company has repurchased 734,541 shares in total under the stock repurchase program at a weighted-average price of $51.69 per share through September 2021.

* In October 2021, the company closed its seventh asset-backed securitization, a $125 million five-year note issuance with a fixed rate of 3.875%. The securitization allows for the funding of multiple loan products, including small, large, and convenience check loans, digitally sourced originations, and loans with APRs greater than 36%. Following the transaction, the company's fixed-rate debt as a percentage of total debt increased from 78% to 87%, with a weighted-average coupon of 2.7% and an average revolving duration of nearly 3 years.

Fourth Quarter 2021 Dividend

The company's Board of Directors has declared a dividend of $0.25 per common share for the fourth quarter of 2021. The dividend will be paid on December 15, 2021 to shareholders of record as of the close of business on November 24, 2021. The declaration and payment of any future dividend is subject to the discretion of the Board of Directors and will depend on a variety of factors, including the company's financial condition and results of operations.

Liquidity and Capital Resources

As of September 30, 2021, the company had net finance receivables of $1.3 billion and debt of $978.8 million ($977.1 million of outstanding debt and $1.7 million of interest payable). The debt consisted of:

* $131.0 million on the company's $640 million senior revolving credit facility, * $88.3 million on the company's aggregate $300 million revolving warehouse credit facilities, and * $759.5 million through the company's asset-backed securitizations.

The company's unused capacity to fund future growth on its revolving credit facilities (subject to the borrowing base) was $722 million, or 76.8%, as of September 30, 2021.

As of September 30, 2021, the company also held interest rate caps with an aggregate notional principal amount of $450 million to manage the risk associated with variable rate debt. The interest rate caps are based on the one-month LIBOR and reimburse the company for the difference when the one-month LIBOR exceeds the strike rate. Of the aggregate amount, $350 million of the interest rate caps have strike rates of 25 or 50 basis points and a weighted-average duration of 2.3 years.

The company had a funded debt-to-equity ratio of 3.5 to 1.0 and a stockholders' equity ratio of 21.1%, each as of September 30, 2021. On a non-GAAP basis, the company had a funded debt-to-tangible equity ratio of 3.6 to 1.0, as of September 30, 2021. Please refer to the reconciliations of non-GAAP measures to comparable GAAP measures included at the end of this press release.

Full Year 2021 Outlook

The company is raising its full year 2021 outlook for net income to between $85 million and $87 million, from its previous outlook of net income between $75 million and $80 million. The outlook assumes that:

* Current economic conditions remain steady, * The full year 2021 net credit loss rate will be less than 7.0%, * Net finance receivables will be approximately $1.4 billion at the end of 2021, * The company will further build its allowance for credit losses in the fourth quarter due to net finance receivables growth, * The allowance for credit losses rate will continue to normalize gradually toward pre-pandemic levels of approximately 10.8% by mid-2022, and * General and administrative expenses will increase in the fourth quarter as the company continues to invest in its growth initiatives.

Assuming the economic recovery remains on track, the company believes that credit performance will remain strong into next year and that the company's 2022 net credit loss rate will be at or below 8.5%.

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 (855) 327-6837 (toll-free) or (631) 891-4304 (direct). Please dial the number 10 minutes prior to the scheduled start time.

*** A supplemental slide presentation will be made available on Regional's website prior to the earnings call at www.RegionalManagement.com. ***

In addition, a live webcast of the conference call will be available on Regional's website at www.RegionalManagement.com.

A webcast replay of the call will be available at www.RegionalManagement.com for one year following the call.

About Regional Management Corp.

Regional Management Corp. (NYSE: RM) is a diversified consumer finance company that provides attractive, easy-to-understand installment loan products primarily to customers with limited access to consumer credit from banks, thrifts, credit card companies, and other lenders. Regional Management operates under the name "Regional Finance" in more than 340 branch locations in 13 states across the United States. Most of its loan products are secured, and each is structured on a fixed-rate, fixed-term basis with fully amortizing equal monthly installment payments, repayable at any time without penalty. Regional Management sources loans through its multiple channel platform, which includes branches, centrally managed direct mail campaigns, digital partners, retailers, and its consumer website. For more information, please visit www.RegionalManagement.com.

Forward-Looking Statements

This press release may contain various "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical fact but instead represent Regional Management Corp.'s expectations or beliefs concerning future events. Forward-looking statements include, without limitation, statements concerning financial outlooks or future plans, objectives, goals, projections, strategies, events, or performance, and underlying assumptions and other statements related thereto. Words such as "may," "will," "should," "likely," "anticipates," "expects," "intends," "plans," "projects," "believes," "estimates," "outlook," and similar expressions may be used to identify these forward-looking statements. Such forward-looking statements speak only as of the date on which they were made and are about matters that are inherently subject to risks and uncertainties, many of which are outside of the control of Regional Management. As a result, actual performance and results may differ materially from those contemplated by these forward-looking statements. Therefore, investors should not place undue reliance on forward-looking statements.

Factors that could cause actual results or performance to differ from the expectations expressed or implied in forward-looking statements include, but are not limited to, the following: risks related to Regional Management's business, including the COVID-19 pandemic and its impact on Regional Management's operations and financial condition; managing growth effectively, implementing Regional Management's growth strategy, and opening new branches as planned; Regional Management's convenience check strategy; Regional Management's policies and procedures for underwriting, processing, and servicing loans; Regional Management's ability to collect on its loan portfolio; Regional Management's insurance operations; exposure to credit risk and repayment risk, which risks may increase in light of adverse or recessionary economic conditions; the implementation of new underwriting models and processes, including as to the effectiveness of new custom scorecards; changes in the competitive environment in which Regional Management operates or a decrease in the demand for its products; the geographic concentration of Regional Management's loan portfolio; the failure of third-party service providers, including those providing information technology products; changes in economic conditions in the markets Regional Management serves, including levels of unemployment and bankruptcies; the ability to achieve successful acquisitions and strategic alliances; the ability to make technological improvements as quickly as competitors; security breaches, cyber-attacks, failures in information systems, or fraudulent activity; the ability to originate loans; reliance on information technology resources and providers, including the risk of prolonged system outages; changes in current revenue and expense trends, including trends affecting delinquencies and credit losses; changes in operating and administrative expenses; the departure, transition, or replacement of key personnel; the ability to timely and effectively implement, transition to, and maintain the necessary information technology systems, infrastructure, processes, and controls to support Regional Management's operations and initiatives; changes in interest rates; existing sources of liquidity may become insufficient or access to these sources may become unexpectedly restricted; exposure to financial risk due to asset-backed securitization transactions; risks related to regulation and legal proceedings, including changes in laws or regulations or in the interpretation or enforcement of laws or regulations; changes in accounting standards, rules, and interpretations and the failure of related assumptions and estimates, including those associated with CECL accounting; the impact of changes in tax laws, guidance, and interpretations, including the timing and amount of revenues that may be recognized; risks related to the ownership of Regional Management's common stock, including volatility in the market price of shares of Regional Management's common stock; the timing and amount of future cash dividend payments; and anti-takeover provisions in Regional Management's charter documents and applicable state law. The COVID-19 pandemic may also magnify many of these risks and uncertainties.

The foregoing factors and others are discussed in greater detail in Regional Management's filings with the Securities and Exchange Commission. Regional Management will not update or revise forward-looking statements to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events or the non-occurrence of anticipated events, whether as a result of new information, future developments, or otherwise, except as required by law. Regional Management is not responsible for changes made to this document by wire services or Internet services.

Regional Management Corp. and Subsidiaries

Consolidated Statements of Income

(Unaudited)

(dollars in thousands, except per share amounts)

Better (Worse) Better (Worse)

3Q 21 3Q 20 $ % YTD 21 YTD 20 $ %

Revenue

Interest and fee $ 99,355 $ 81,306 $ 18,049 22.2 % $ 275,427 $ 248,370 $ 27,057 10.9 %income

Insurance 9,418 6,861 2,557 37.3 % 26,059 20,460 5,599 27.4 %income, net

Other income 2,687 2,371 316 13.3 % 7,381 7,632 (251 ) (3.3 ) %

Total revenue 111,460 90,538 20,922 23.1 % 308,867 276,462 32,405 11.7 %



Expenses

Provision for 26,096 22,089 (4,007 ) (18.1 ) 58,007 99,110 41,103 41.5 %credit losses %



Personnel 29,299 26,207 (3,092 ) (11.8 ) 86,520 82,581 (3,939 ) (4.8 ) % %

Occupancy 6,027 5,893 (134 ) (2.3 ) 17,615 16,728 (887 ) (5.3 ) % %

Marketing 2,488 3,249 761 23.4 % 9,974 6,373 (3,601 ) (56.5 ) %

Other 9,936 8,405 (1,531 ) (18.2 ) 25,873 25,840 (33 ) (0.1 ) % %

Total general ) )and 47,750 43,754 (3,996 ) (9.1 % 139,982 131,522 (8,460 ) (6.4 %administrative



Interest expense 8,816 9,300 484 5.2 % 23,752 28,596 4,844 16.9 %

Income before 28,798 15,395 13,403 87.1 % 87,126 17,234 69,892 405.5 %income taxes

Income taxes 6,577 4,157 (2,420 ) (58.2 ) 19,217 4,851 (14,366 ) (296.1 ) % %

Net income $ 22,221 $ 11,238 $ 10,983 97.7 % $ 67,909 $ 12,383 $ 55,526 448.4 %

Net income per common share:

Basic $ 2.25 $ 1.02 $ 1.23 120.6 % $ 6.66 $ 1.13 $ 5.53 489.4 %

Diluted $ 2.11 $ 1.01 $ 1.10 108.9 % $ 6.29 $ 1.11 $ 5.18 466.7 %

Weighted-averagecommon shares outstanding:

Basic 9,861 10,977 1,116 10.2 % 10,199 10,945 746 6.8 %

Diluted 10,544 11,092 548 4.9 % 10,800 11,117 317 2.9 %

Return onaverage assets 7.1 % 4.4 % 7.8 % 1.6 % (annualized)

Return onaverage equity 31.6 % 16.9 % 32.4 % 6.2 % (annualized)

Regional Management Corp. and Subsidiaries

Consolidated Balance Sheets

(Unaudited)

(dollars in thousands, except par value amounts)

Increase (Decrease)

3Q 21

3Q 20

$

%

Assets

Cash

$

8,146

$

4,292

$

3,854

89.8

%

Net finance receivables

1,314,233

1,059,554

254,679

24.0

%

Unearned insurance premiums

(44,142

)

(30,024

)

(14,118

)

(47.0

)%

Allowance for credit losses

(150,100

)

(144,000

)

(6,100

)

(4.2

)%

Net finance receivables, less unearned insurance premiums and allowance for credit losses

1,119,991

885,530

234,461

26.5

%

Restricted cash

103,999

58,219

45,780

78.6

%

Lease assets

28,891

27,855

1,036

3.7

%

Deferred tax assets, net

12,535

22,960

(10,425

)

(45.4

)%

Property and equipment

12,495

15,054

(2,559

)

(17.0

)%

Intangible assets

9,184

8,677

507

5.8

%

Other assets

18,317

14,972

3,345

22.3

%

Total assets

$

1,313,558

$

1,037,559

$

275,999

26.6

%

Liabilities and Stockholders' Equity

Liabilities:

Debt

$

978,803

$

700,139

$

278,664

39.8

%

Unamortized debt issuance costs

(10,110

)

(8,603

)

(1,507

)

(17.5

)%

Net debt

968,693

691,536

277,157

40.1

%

Accounts payable and accrued expenses

36,114

43,576

(7,462

)

(17.1

)%

Lease liabilities

31,285

29,983

1,302

4.3

%

Total liabilities

1,036,092

765,095

270,997

35.4

%

Stockholders' equity:

Preferred stock ($0.10 par value, 100,000 shares authorized, none issued or outstanding)

-

-

-

-

Common stock ($0.10 par value, 1,000,000 shares authorized, 14,177 shares issued and 10,007 shares outstanding at September 30, 2021 and 13,821 shares issued and 11,337 shares outstanding at September 30, 2020)

1,418

1,382

36

2.6

%

Additional paid-in capital

106,319

105,866

453

0.4

%

Retained earnings

287,825

215,290

72,535

33.7

%

Treasury stock (4,170 shares at September 30, 2021 and 2,484 shares at September 30, 2020)

(118,096

)

(50,074

)

(68,022

)

(135.8

)%

Total stockholders' equity

277,466

272,464

5,002

1.8

%

Total liabilities and stockholders' equity

$

1,313,558

$

1,037,559

$

275,999

26.6

%

Regional Management Corp. and Subsidiaries

Consolidated Balance Sheets

(Unaudited)

(dollars in thousands, except par value amounts)

Increase (Decrease)

3Q 21 3Q 20 $ %

Assets

Cash $ 8,146 $ 4,292 $ 3,854 89.8 %

Net finance 1,314,233 1,059,554 254,679 24.0 %receivables

Unearned insurance (44,142 ) (30,024 ) (14,118 ) (47.0 )premiums %

Allowance for credit (150,100 ) (144,000 ) (6,100 ) (4.2 )losses %

Net financereceivables, lessunearned insurance 1,119,991 885,530 234,461 26.5 %premiums andallowance for creditlosses

Restricted cash 103,999 58,219 45,780 78.6 %

Lease assets 28,891 27,855 1,036 3.7 %

Deferred tax assets, 12,535 22,960 (10,425 ) (45.4 )net %

Property and 12,495 15,054 (2,559 ) (17.0 )equipment %

Intangible assets 9,184 8,677 507 5.8 %

Other assets 18,317 14,972 3,345 22.3 %

Total assets $ 1,313,558 $ 1,037,559 $ 275,999 26.6 %

Liabilities and Stockholders' Equity

Liabilities:

Debt $ 978,803 $ 700,139 $ 278,664 39.8 %

Unamortized debt (10,110 ) (8,603 ) (1,507 ) (17.5 )issuance costs %

Net debt 968,693 691,536 277,157 40.1 %

Accounts payable and 36,114 43,576 (7,462 ) (17.1 )accrued expenses %

Lease liabilities 31,285 29,983 1,302 4.3 %

Total liabilities 1,036,092 765,095 270,997 35.4 %

Stockholders' equity:

Preferred stock($0.10 par value,100,000 shares - - - - authorized, noneissued oroutstanding)

Common stock ($0.10par value, 1,000,000shares authorized,14,177 shares issuedand 10,007 sharesoutstanding at 1,418 1,382 36 2.6 %September 30, 2021and 13,821 sharesissued and 11,337shares outstandingat September 30,2020)

Additional paid-in 106,319 105,866 453 0.4 %capital

Retained earnings 287,825 215,290 72,535 33.7 %

Treasury stock(4,170 shares at )September 30, 2021 (118,096 ) (50,074 ) (68,022 ) (135.8 %and 2,484 shares atSeptember 30, 2020)

Total stockholders' 277,466 272,464 5,002 1.8 %equity

Total liabilitiesand stockholders' $ 1,313,558 $ 1,037,559 $ 275,999 26.6 %equity

Regional Management Corp. and Subsidiaries

Selected Financial Data

(Unaudited)

(dollars in thousands, except per share amounts)

Net Finance Receivables by Product

3Q 21

2Q 21

QoQ $ Inc (Dec)

QoQ % Inc (Dec)

3Q 20

YoY $ Inc (Dec)

YoY % Inc (Dec)

Small loans

$

419,602

$

380,780

$

38,822

10.2

%

$

382,785

$

36,817

9.6

%

Large loans

882,514

789,743

92,771

11.7

%

655,932

226,582

34.5

%

Total core loans

1,302,116

1,170,523

131,593

11.2

%

1,038,717

263,399

25.4

%

Automobile loans

1,757

2,303

(546

)

(23.7

)%

4,892

(3,135

)

(64.1

)%

Retail loans

10,360

10,561

(201

)

(1.9

)%

15,945

(5,585

)

(35.0

)%

Total net finance receivables

$

1,314,233

$

1,183,387

$

130,846

11.1

%

$

1,059,554

$

254,679

24.0

%

Number of branches at period end

372

368

4

1.1

%

368

4

1.1

%

Average net finance receivables per branch

$

3,533

$

3,216

$

317

9.9

%

$

2,879

$

654

22.7

%

Regional Management Corp. and Subsidiaries

Selected Financial Data

(Unaudited)

(dollars in thousands, except per share amounts)

Net Finance Receivables by Product

QoQ $ QoQ % YoY $ YoY % 3Q 21 2Q 21 Inc (Dec) Inc 3Q 20 Inc (Dec) Inc (Dec) (Dec)

Small loans $ 419,602 $ 380,780 $ 38,822 10.2 % $ 382,785 $ 36,817 9.6 %

Large loans 882,514 789,743 92,771 11.7 % 655,932 226,582 34.5 %

Total core 1,302,116 1,170,523 131,593 11.2 % 1,038,717 263,399 25.4 %loans

Automobile 1,757 2,303 (546 ) (23.7 ) 4,892 (3,135 ) (64.1 )loans % %

Retail loans 10,360 10,561 (201 ) (1.9 ) 15,945 (5,585 ) (35.0 ) % %

Total netfinance $ 1,314,233 $ 1,183,387 $ 130,846 11.1 % $ 1,059,554 $ 254,679 24.0 %receivables

Number ofbranches at 372 368 4 1.1 % 368 4 1.1 %period end

Average netfinance $ 3,533 $ 3,216 $ 317 9.9 % $ 2,879 $ 654 22.7 %receivablesper branch

Averages and Yields

3Q 21

2Q 21

3Q 20

Average Net Finance Receivables

Average Yield (Annualized)

Average Net Finance Receivables

Average Yield (Annualized)

Average Net Finance Receivables

Average Yield (Annualized)

Small loans

$

394,888

38.9

%

$

365,535

38.3

%

$

377,390

37.7

%

Large loans

834,470

28.9

%

744,935

28.6

%

632,106

28.3

%

Automobile loans

2,036

13.4

%

2,647

12.7

%

5,492

13.5

%

Retail loans

10,291

18.8

%

11,181

18.2

%

17,145

18.9

%

Total interest and fee yield

$

1,241,685

32.0

%

$

1,124,298

31.6

%

$

1,032,133

31.5

%

Total revenue yield

$

1,241,685

35.9

%

$

1,124,298

35.5

%

$

1,032,133

35.1

%

Averages and Yields

3Q 21 2Q 21 3Q 20

Average Net Average Average Net Average Average Net Average Finance Yield Finance Yield Finance Yield Receivables (Annualized) Receivables (Annualized) Receivables (Annualized)

Small loans $ 394,888 38.9 % $ 365,535 38.3 % $ 377,390 37.7 %

Large loans 834,470 28.9 % 744,935 28.6 % 632,106 28.3 %

Automobile 2,036 13.4 % 2,647 12.7 % 5,492 13.5 %loans

Retail loans 10,291 18.8 % 11,181 18.2 % 17,145 18.9 %

Total interest $ 1,241,685 32.0 % $ 1,124,298 31.6 % $ 1,032,133 31.5 %and fee yield

Total revenue $ 1,241,685 35.9 % $ 1,124,298 35.5 % $ 1,032,133 35.1 %yield

Components of Increase in Interest and Fee Income

3Q 21 Compared to 3Q 20

Increase (Decrease)

Volume

Rate

Volume & Rate

Total

Small loans

$

1,651

$

1,116

$

52

$

2,819

Large loans

14,309

1,033

331

15,673

Automobile loans

(117

)

(3

)

2

(118

)

Retail loans

(323

)

(3

)

1

(325

)

Product mix

987

(862

)

(125

)

-

Total increase in interest and fee income

$

16,507

$

1,281

$

261

$

18,049

Components of Increase in Interest and Fee Income

3Q 21 Compared to 3Q 20

Increase (Decrease)

Volume Rate Volume Total & Rate

Small loans $ 1,651 $ 1,116 $ 52 $ 2,819

Large loans 14,309 1,033 331 15,673

Automobile loans (117 ) (3 ) 2 (118 )

Retail loans (323 ) (3 ) 1 (325 )

Product mix 987 (862 ) (125 ) -

Total increase in interest $ 16,507 $ 1,281 $ 261 $ 18,049 and fee income

Loans Originated (1) (2)

3Q 21

2Q 21

QoQ $ Inc (Dec)

QoQ % Inc (Dec)

3Q 20

YoY $ Inc (Dec)

YoY % Inc (Dec)

Small loans

$

173,390

$

151,584

$

21,806

14.4

%

$

147,882

$

25,508

17.2

%

Large loans

245,062

224,484

20,578

9.2

%

162,804

82,258

50.5

%

Retail loans

2,206

1,659

547

33.0

%

1,832

374

20.4

%

Total loans originated

$

420,658

$

377,727

$

42,931

11.4

%

$

312,518

$

108,140

34.6

%

(1) Represents the principal balance of loan originations and refinancings. (2) The company ceased originating automobile purchase loans in November 2017.

Loans Originated (1) (2)

QoQ $ QoQ % YoY $ YoY % 3Q 21 2Q 21 Inc Inc 3Q 20 Inc (Dec) Inc (Dec) (Dec) (Dec)

Small loans $ 173,390 $ 151,584 $ 21,806 14.4 % $ 147,882 $ 25,508 17.2 %

Large loans 245,062 224,484 20,578 9.2 % 162,804 82,258 50.5 %

Retail loans 2,206 1,659 547 33.0 % 1,832 374 20.4 %

Total loans $ 420,658 $ 377,727 $ 42,931 11.4 % $ 312,518 $ 108,140 34.6 %originated

(1) Represents the principal balance of loan originations and refinancings. (2) The company ceased originating automobile purchase loans in November 2017.

Other Key Metrics

3Q 21 2Q 21 3Q 20

Net credit losses $ 15,396 $ 20,749 $ 20,089

Percentage of average netfinance receivables 5.0 % 7.4 % 7.8 %(annualized)

Provision for loan losses (1) $ 26,096 $ 20,549 $ 22,089

Percentage of average netfinance receivables 8.4 % 7.3 % 8.6 %(annualized)

Percentage of total revenue 23.4 % 20.6 % 24.4 %

General and administrative $ 47,750 $ 46,389 $ 43,754 expenses

Percentage of average netfinance receivables 15.4 % 16.5 % 17.0 %(annualized)

Percentage of total revenue 42.8 % 46.5 % 48.3 %

Same store results (2):

Net finance receivables at $ 1,296,746 $ 1,175,516 $ 1,049,327 period-end

Net finance receivable growth 22.7 % 15.4 % (1.5 )rate %

Number of branches in 359 356 347 calculation

(1) Includes COVID-19 pandemic impacts to provision for credit losses of $(2,000), $(6,300), and $(1,500) for 3Q 21, 2Q 21, and 3Q 20, respectively. (2) Same store sales reflect the change in year-over-year sales for the comparable branch base. The comparable branch base includes those branches open for at least one year.

Contractual Delinquency by Aging

3Q 21 2Q 21 3Q 20

Allowance forcredit losses $ 150,100 11.4 % $ 139,400 11.8 % $ 144,000 13.6 %(1)

1,156,475 88.0 % 1,066,124 90.1 % 929,778 87.8 %Current

1 to 29 days 96,477 7.3 % 74,470 6.3 % 79,838 7.5 %past due

Delinquent accounts:

30 to 59 days 20,162 1.6 % 14,488 1.2 % 16,105 1.5 %

60 to 89 days 15,075 1.1 % 9,614 0.8 % 11,014 1.0 %

90 to 119 11,202 0.9 % 6,116 0.5 % 8,375 0.8 %days

120 to 149 8,176 0.6 % 5,961 0.5 % 7,967 0.8 %days

150 to 179 6,666 0.5 % 6,614 0.6 % 6,477 0.6 %days

Totalcontractual $ 61,281 4.7 % $ 42,793 3.6 % $ 49,938 4.7 %delinquency

Total netfinance $ 1,314,233 100.0 % $ 1,183,387 100.0 % $ 1,059,554 100.0 %receivables

1 day and $ 157,758 12.0 % $ 117,263 9.9 % $ 129,776 12.2 %over past due

Contractual Delinquency by Product

3Q 21

2Q 21

3Q 20

Small loans

$

27,928

6.7

%

$

18,876

5.0

%

$

22,904

6.0

%

Large loans

32,523

3.7

%

23,068

2.9

%

25,489

3.9

%

Automobile loans

143

8.1

%

183

7.9

%

337

6.9

%

Retail loans

687

6.6

%

666

6.3

%

1,208

7.6

%

Total contractual delinquency

$

61,281

4.7

%

$

42,793

3.6

%

$

49,938

4.7

%

(1) Includes incremental COVID-19 allowance for credit losses of $15,500, $17,500, and $31,900 in 3Q 21, 2Q 21, and 3Q 20, respectively.

Contractual Delinquency by Product

3Q 21 2Q 21 3Q 20

Small loans $ 27,928 6.7 % $ 18,876 5.0 % $ 22,904 6.0 %

Large loans 32,523 3.7 % 23,068 2.9 % 25,489 3.9 %

Automobile loans 143 8.1 % 183 7.9 % 337 6.9 %

Retail loans 687 6.6 % 666 6.3 % 1,208 7.6 %

Total contractual $ 61,281 4.7 % $ 42,793 3.6 % $ 49,938 4.7 %delinquency

(1) Includes incremental COVID-19 allowance for credit losses of $15,500, $17,500, and $31,900 in 3Q 21, 2Q 21, and 3Q 20, respectively.

Income Statement Quarterly Trend

3Q 20 4Q 20 1Q 21 2Q 21 3Q 21 QoQ $ YoY $ B(W) B(W)

Revenue

Interest and fee income $ 81,306 $ 86,845 $ 87,279 $ 88,793 $ 99,355 $ 10,562 $ 18,049

Insurance income, net 6,861 7,889 7,985 8,656 9,418 762 2,557

Other income 2,371 2,710 2,467 2,227 2,687 460 316

Total revenue 90,538 97,444 97,731 99,676 111,460 11,784 20,922

Expenses

Provision for credit losses 22,089 24,700 11,362 20,549 26,096 (5,547 ) (4,007 )

26,207 26,979 28,851 28,370 29,299 (929 ) (3,092 )Personnel

Occupancy 5,893 5,900 6,020 5,568 6,027 (459 ) (134 )

Marketing 3,249 3,984 2,710 4,776 2,488 2,288 761

Other 8,405 7,931 8,262 7,675 9,936 (2,261 ) (1,531 )

Total general and 43,754 44,794 45,843 46,389 47,750 (1,361 ) (3,996 )administrative

9,300 9,256 7,135 7,801 8,816 (1,015 ) 484 Interest expense

Income before income taxes 15,395 18,694 33,391 24,937 28,798 3,861 13,403

Income taxes 4,157 4,347 7,869 4,771 6,577 (1,806 ) (2,420 )

Net income $ 11,238 $ 14,347 $ 25,522 $ 20,166 $ 22,221 $ 2,055 $ 10,983

Net income per common share:

Basic $ 1.02 $ 1.32 $ 2.42 $ 1.98 $ 2.25 $ 0.27 $ 1.23

Diluted $ 1.01 $ 1.28 $ 2.31 $ 1.87 $ 2.11 $ 0.24 $ 1.10

Weighted-average shares outstanding:

Basic 10,977 10,882 10,543 10,200 9,861 339 1,116

Diluted 11,092 11,228 11,066 10,797 10,544 253 548

$ 81,238 $ 88,188 $ 90,596 $ 91,875 $ 102,644 $ 10,769 $ 21,406 Net interest margin

Net credit margin $ 59,149 $ 63,488 $ 79,234 $ 71,326 $ 76,548 $ 5,222 $ 17,399

Balance Sheet Quarterly Trend

3Q 20

4Q 20

1Q 21

2Q 21

3Q 21

QoQ $ Inc (Dec)

YoY $ Inc (Dec)

Total assets

$

1,037,559

$

1,103,856

$

1,098,295

$

1,191,305

$

1,313,558

$

122,253

$

275,999

Net finance receivables

$

1,059,554

$

1,136,259

$

1,105,603

$

1,183,387

$

1,314,233

$

130,846

$

254,679

Allowance for credit losses

$

144,000

$

150,000

$

139,600

$

139,400

$

150,100

$

10,700

$

6,100

Debt

$

700,139

$

768,909

$

752,200

$

853,067

$

978,803

$

125,736

$

278,664

Balance Sheet Quarterly Trend

3Q 20 4Q 20 1Q 21 2Q 21 3Q 21 QoQ $ YoY $ Inc (Dec) Inc (Dec)

Total assets $ 1,037,559 $ 1,103,856 $ 1,098,295 $ 1,191,305 $ 1,313,558 $ 122,253 $ 275,999

Net finance $ 1,059,554 $ 1,136,259 $ 1,105,603 $ 1,183,387 $ 1,314,233 $ 130,846 $ 254,679 receivables

Allowance for credit $ 144,000 $ 150,000 $ 139,600 $ 139,400 $ 150,100 $ 10,700 $ 6,100 losses

Debt $ 700,139 $ 768,909 $ 752,200 $ 853,067 $ 978,803 $ 125,736 $ 278,664

Other Key Metrics Quarterly Trend

3Q 20

4Q 20

1Q 21

2Q 21

3Q 21

QoQ Inc (Dec)

YoY Inc (Dec)

Interest and fee yield (annualized)

31.5

%

31.9

%

31.1

%

31.6

%

32.0

%

0.4

%

0.5

%

Efficiency ratio (1)

48.3

%

46.0

%

46.9

%

46.5

%

42.8

%

(3.7

)%

(5.5

)%

Operating expense ratio (2)

17.0

%

16.4

%

16.3

%

16.5

%

15.4

%

(1.1

)%

(1.6

)%

30+ contractual delinquency

4.7

%

5.3

%

4.3

%

3.6

%

4.7

%

1.1

%

-

Net credit loss ratio (3)

7.8

%

6.9

%

7.7

%

7.4

%

5.0

%

(2.4

)%

(2.8

)%

Book value per share

$

24.03

$

24.89

$

26.28

$

26.93

$

27.73

$

0.80

$

3.70

(1) General and administrative expenses as a percentage of total revenue. (2) Annualized general and administrative expenses as a percentage of average net finance receivables. (3) Annualized net credit losses as a percentage of average net finance receivables.

Other Key Metrics Quarterly Trend

QoQ YoY 3Q 20 4Q 20 1Q 21 2Q 21 3Q 21 Inc Inc (Dec) (Dec)

Interest and fee yield 31.5 % 31.9 % 31.1 % 31.6 % 32.0 % 0.4 % 0.5 %(annualized)

Efficiency ratio (1) 48.3 % 46.0 % 46.9 % 46.5 % 42.8 % (3.7 ) (5.5 ) % %

Operating expense 17.0 % 16.4 % 16.3 % 16.5 % 15.4 % (1.1 ) (1.6 )ratio (2) % %

30+ contractual 4.7 % 5.3 % 4.3 % 3.6 % 4.7 % 1.1 % - delinquency

Net credit loss ratio 7.8 % 6.9 % 7.7 % 7.4 % 5.0 % (2.4 ) (2.8 )(3) % %

Book value per share $ 24.03 $ 24.89 $ 26.28 $ 26.93 $ 27.73 $ 0.80 $ 3.70

(1) General and administrative expenses as a percentage of total revenue. (2) Annualized general and administrative expenses as a percentage of average net finance receivables. (3) Annualized net credit losses as a percentage of average net finance receivables.

Averages and Yields

YTD 21 YTD 20

Average Net Average Average Net Average Finance Yield Finance Yield Receivables (Annualized) Receivables (Annualized)

Small loans $ 383,208 38.2 % $ 413,051 36.9 %

Large loans 766,087 28.5 % 628,173 27.7 %

Automobile loans 2,716 13.0 % 6,971 13.9 %

Retail loans 11,537 18.2 % 20,094 18.2 %

Total interest $ 1,163,548 31.6 % $ 1,068,289 31.0 %and fee yield

Total revenue $ 1,163,548 35.4 % $ 1,068,289 34.5 %yield

Components of Increase in Interest and Fee Income

YTD 21 Compared to YTD 20

Increase (Decrease)

Volume

Rate

Volume & Rate

Total

Small loans

$

(8,257

)

$

4,180

$

(302

)

$

(4,379

)

Large loans

28,677

3,599

790

33,066

Automobile loans

(445

)

(49

)

30

(464

)

Retail loans

(1,169

)

4

(1

)

(1,166

)

Product mix

3,341

(3,226

)

(115

)

-

Total increase in interest and fee income

$

22,147

$

4,508

$

402

$

27,057

Components of Increase in Interest and Fee Income

YTD 21 Compared to YTD 20

Increase (Decrease)

Volume Rate Volume Total & Rate

Small loans $ (8,257 ) $ 4,180 $ (302 ) $ (4,379 )

Large loans 28,677 3,599 790 33,066

Automobile loans (445 ) (49 ) 30 (464 )

Retail loans (1,169 ) 4 (1 ) (1,166 )

Product mix 3,341 (3,226 ) (115 ) -

Total increase in interest $ 22,147 $ 4,508 $ 402 $ 27,057 and fee income

Loans Originated (1) (2)

YTD 21

YTD 20

YTD $ Inc (Dec)

YTD % Inc (Dec)

Small loans

$

426,715

$

351,764

$

74,951

21.3

%

Large loans

600,871

360,215

240,656

66.8

%

Retail loans

5,645

7,312

(1,667

)

(22.8

)%

Total loans originated

$

1,033,231

$

719,291

$

313,940

43.6

%

(1) Represents the principal balance of loan originations and refinancings. (2) The company ceased originating automobile loans in November 2017.

Loans Originated (1) (2)

YTD $ YTD % YTD 21 YTD 20 Inc (Dec) Inc (Dec)

Small loans $ 426,715 $ 351,764 $ 74,951 21.3 %

Large loans 600,871 360,215 240,656 66.8 %

Retail loans 5,645 7,312 (1,667 ) (22.8 )%

Total loans $ 1,033,231 $ 719,291 $ 313,940 43.6 %originated

(1) Represents the principal balance of loan originations and refinancings. (2) The company ceased originating automobile loans in November 2017.

Other Key Metrics

YTD 21 YTD 20

Net credit losses $ 57,907 $ 77,410

Percentage of average net finance receivables 6.6 % 9.7 %(annualized)

Provision for loan losses (1) $ 58,007 $ 99,110

Percentage of average net finance receivables 6.6 % 12.4 %(annualized)

Percentage of total revenue 18.8 % 35.8 %

General and administrative expenses (2) (3) (4) $ 139,982 $ 131,522

Percentage of average net finance receivables 16.0 % 16.4 %(annualized)

Percentage of total revenue 45.3 % 47.6 %

(1) Includes COVID-19 pandemic impacts to provision for credit losses of $(14,900) and $31,900 for YTD 21 and YTD 20, respectively. (2) Includes non-operating executive transition costs of $3,066 for YTD 20. (3) Includes non-operating loan management system outage costs of $720 for YTD 20. (4) Includes non-operating severance costs of $778 for YTD 20.

Non-GAAP Financial Measures

In addition to financial measures presented in accordance with generally accepted accounting principles ("GAAP"), this press release contains certain non-GAAP financial measures. The company's management utilizes non-GAAP measures as additional metrics to aid in, and enhance, its understanding of the company's financial results. Tangible equity and funded debt-to-tangible equity ratio are non-GAAP measures that adjust GAAP measures to exclude intangible assets. Management uses these equity measures to evaluate and manage the company's capital and leverage position. The company also believes that these equity measures are commonly used in the financial services industry and provide useful information to users of the company's financial statements in the evaluation of its capital and leverage position.

This non-GAAP financial information should be considered in addition to, not as a substitute for or superior to, measures of financial performance prepared in accordance with GAAP. In addition, the company's non-GAAP measures may not be comparable to similarly titled non-GAAP measures of other companies. The following tables provide a reconciliation of GAAP measures to non-GAAP measures.

3Q 21

Debt $ 978,803

277,466 Total stockholders' equity

Less: Intangible assets 9,184

Tangible equity (non-GAAP) $ 268,282

3.5 xFunded debt-to-equity ratio

Funded debt-to-tangible equity ratio (non-GAAP) 3.6 x

View source version on businesswire.com: https://www.businesswire.com/news/home/20211102006171/en/

CONTACT: Investor Relations Garrett Edson, (203) 682-8331 investor.relations@regionalmanagement.com