Regional Management Corp. Announces Third Quarter 2015 Results

- Net income of $6.5 million; diluted earnings per share of $0.50 -

- Total finance receivables of $602 million, up $29 million sequentially and $58 million compared to prior-year period -

- Announced marketing of existing and forward-flow charged-off accounts -

GREENVILLE, S.C.--(BUSINESS WIRE)-- Regional Management Corp. (NYSE: RM), a diversified specialty consumer finance company, today announced results for the third quarter ended September 30, 2015.

Third Quarter 2015 Highlights and Subsequent Events

• Net income for the third quarter of 2015 was $6.5 million, a $1.1 million increase sequentially and an increase of $5.1 million from the prior-year period, which included the impact of poor credit quality convenience check solicitations. Diluted earnings per share were $0.50 based on a diluted share count of 13.1 million.
• Total finance receivables as of September 30, 2015 were $601.6 million, an increase of 10.7% from the prior-year period. Core loan categories continue to grow:
  • Large loan finance receivables as of September 30, 2015 were $119.7 million, an increase of 28.5% sequentially and 183.9% compared to the prior-year period.
  • Branch small loan and convenience check finance receivables, collectively, as of September 30, 2015 were $328.2 million, an increase of 4.2% sequentially and 5.7% over the prior-year period.
• Total revenue for the third quarter of 2015 was $55.1 million, an increase of $2.1 million sequentially and a $1.2 million increase from the prior-year period. Revenue growth over the prior-year period was driven by a 10.7% increase in receivables, mostly offset by an overall yield decline of 270 basis points.
  • Branch small loan yield declined 450 basis points primarily due to the origination of higher balance loans that carry lower rates.
  • Convenience check yield declined 620 basis points, also primarily due to the origination of higher balance loans that carry lower rates. The yield decline from the prior-year period was also due to the absence of higher rate, poorer credit quality loans originated last year and which have now rolled out of the portfolio.

• Net charge-offs were $12.5 million for the third quarter of 2015, or 8.5% of average finance receivables (annualized), improving from 8.7% in the prior-year period. The related provision for credit losses for the third quarter of 2015 was $14.1 million, a decline from $22.5 million in the prior-year period, and an increase from $12.1 million in the second quarter of 2015. The $2.0 million increase compared to the second quarter of 2015 primarily relates to the growth in the total portfolio.
• Total delinquencies as a percentage of total finance receivables as of September 30, 2015 were 22.4%, down from 25.5% as of September 30, 2014 and up from 20.6% as of June 30, 2015, primarily reflecting seasonal industry trends.
• Regional Management opened 6 new branches in the third quarter of 2015. As of September 30, 2015, Regional Management’s branch network consisted of 322 locations.
• Regional Management renewed its senior revolving credit facility agreement in September, receiving an increase in the committed line under the credit facility to $538 million from the previous amount of $500 million, and a maturity extension from May 2016 to September 2018.
• Earlier today, Regional Management initiated the marketing of $100 million of its existing charged-off accounts as well as the forward flow of its charge-offs and intends to complete the transaction in the fourth quarter of 2015, with the possibility that the transaction may be completed in the first quarter of 2016.

“The third quarter results continued the sequential quarter-over-quarter trend of reporting increased profits that began in the fourth quarter of 2014,” said Michael R. Dunn, Chief Executive Officer of Regional Management Corp. “Our core products of branch small loans, convenience checks and large loans saw strong receivables growth, up 27.0% compared to the prior-year period, and as a result, our combined loan portfolio grew to over $600 million for the first time. Large loan receivables at the end of the quarter stood at $120 million, up 28% on a sequential basis and nearly triple the amount in our portfolio at the end of the third quarter of 2014. Notably, large loan receivables now comprise 20% of our total portfolio compared to 8% at the end of the prior-year quarter, and we believe there remain opportunities for continued growth.”

“Our net charge-off rate of 8.5% for the third quarter of 2015 was down from 8.7% in the third quarter of 2014 and 9.4% in the second quarter of 2015, and demonstrates the improving quality of our portfolio,” continued Mr. Dunn. “Our delinquencies at the end of the third quarter were up from the second quarter, mainly due to seasonality. General and administrative expenses increased $900,000 over the prior-year period, primarily due to higher branch expenses. Importantly, last month we announced the renewal of our senior revolving credit facility. In addition to seeing an increase in the size of our committed line, we gained approval to complete an auto loan securitization of up to $100 million, which will provide available funding as we continue to focus on growing our core loan portfolios. We were pleased with the continued support from our group of lenders, and with that now behind us, we are fully focused on further building a profitable and well-managed business.”

Third Quarter 2015 Results

Finance receivables outstanding at September 30, 2015 were $601.6 million, a 10.7% increase from $543.4 million in the prior-year period. Finance receivables increased primarily due to an increase in both Regional Management’s small and large loan portfolios and the addition of 26 de novo branches since September 30, 2014.

For the third quarter ended September 30, 2015, Regional Management reported total revenue of $55.1 million, a 2.2% increase from $53.9 million in the prior-year period. Interest and fee income for the third quarter of 2015 was $49.7 million, a 1.9% increase from $48.8 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 third quarter of 2015 was $2.8 million, a 5.0% increase from the prior-year period.

Provision for credit losses in the third quarter of 2015 was $14.1 million versus $22.5 million in the prior-year period. Net charge-offs were $12.5 million in the third quarter of 2015. Annualized net charge-offs as a percentage of average finance receivables for the third quarter of 2015 were 8.5%, an improvement from 8.7% in the prior-year period.

On a sequential basis, provision for credit losses of $14.1 million was $2.0 million higher than the second quarter of 2015, predominantly due to loan growth.

General and administrative expenses for the third quarter of 2015 were $26.2 million, an increase of 3.6% from $25.3 million in the prior-year period. The increase was driven primarily by $2.0 million of additional branch expenses, offset by a $0.5 million decline in home office expenses and a $0.6 million decline in marketing costs. Branch expenses include changes in staffing and incentive plans for all branches, as well as the expenses associated with 26 branches added since September 30, 2014.

Net income for the third quarter of 2015 was $6.5 million, a 365.8% increase compared to net income of $1.4 million in the prior-year period. Diluted earnings per share for the third quarter of 2015 were $0.50, an increase from $0.11 in the prior-year period.

Nine Months 2015 Results

For the nine months ended September 30, 2015, Regional Management reported total revenue of $160.6 million, a 6.4% increase from $150.9 million in the prior-year period. Interest and fee income for the nine months ended September 30, 2015 was $144.5 million, a 6.4% increase from $135.8 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. Insurance income for the nine months ended September 30, 2015 was $8.8 million, a 4.8% increase from the prior-year period.

Provision for credit losses for the nine months ended September 30, 2015 was $35.9 million versus $53.1 million in the prior-year period. Net charge-offs of $38.6 million in the nine months ended September 30, 2015 exceeded the provision by $2.7 million as Regional Management released a portion of the allowance recorded in 2014 for convenience checks. Annualized net charge-offs as a percentage of average finance receivables for the nine months ended September 30, 2015 was 9.2%, a decline from 9.6% in the prior-year period.

General and administrative expenses for the nine months ended September 30, 2015 were $87.0 million, an increase of $18.7 million, or 27.3%, from $68.4 million in the prior-year period. Included in the nine months 2015 results were $2.7 million in non-operating expenses. The balance of the expense increase of $16.0 million was driven primarily by $8.5 million of additional branch expenses, $6.5 million of additional home office expenses and $1.1 million of additional marketing costs. Branch expenses include changes in staffing and incentive plans for all branches, as well as the expenses associated with 58 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 nine months ended September 30, 2015 was $16.0 million, a 40.1% increase compared to GAAP net income of $11.4 million in the prior-year period, and diluted earnings per share for the nine months ended September 30, 2015 were $1.22 compared to $0.88 in the prior-year period. Excluding the aforementioned non-operating expenses, non-GAAP net income for the nine months ended September 30, 2015 totaled $17.7 million and non-GAAP diluted earnings per share were $1.35. For a reconciliation of non-GAAP financial measures to the nearest comparable GAAP financial measure, please refer to the reconciliation table accompanying this release.

2015 De Novo Outlook

As of September 30, 2015, Regional Management’s branch network consisted of 322 locations. Regional Management opened 6 de novo branches in the third quarter of 2015 and, for the full year 2015, plans to open a minimum of 30 de novo branches.

Liquidity and Capital Resources

As of September 30, 2015, Regional Management had finance receivables of $601.6 million and outstanding debt of $379.6 million on its $538.0 million senior revolving credit facility.

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) 515-2909 (toll-free) or (617) 399-5123 (direct), passcode 62776115. 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, October 29, 2015, 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 and Georgia. 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)
		3Q’15				3Q’14				$				%			YTD’15				YTD’14				$				%
Revenue
Interest and fee income		$	49,741			$	48,792			$	949			1.9	%		$	144,474			$	135,833			$	8,641			6.4	%
Insurance income, net			2,767				2,636				131			5.0	%			8,816				8,412				404			4.8	%
Other income			2,588				2,481				107			4.3	%			7,331				6,682				649			9.7	%
Total revenue			55,096				53,909				1,187			2.2	%			160,621				150,927				9,694			6.4	%
Expenses
Provision for credit losses			14,085				22,542				8,457			37.5	%			35,899				53,106				17,207			32.4	%
Personnel			15,993				14,042				(1,951	)		-13.9	%			51,964				38,284				(13,680	)		-35.7	%
Occupancy			4,590				4,221				(369	)		-8.7	%			13,053				11,418				(1,635	)		-14.3	%
Marketing			1,134				1,756				622			35.4	%			5,614				4,488				(1,126	)		-25.1	%
Other			4,465				5,265				800			15.2	%			16,417				14,191				(2,226	)		-15.7	%
Total general and administrative expenses			26,182				25,284				(898	)		-3.6	%			87,048				68,381				(18,667	)		-27.3	%
Interest expense			4,335				3,848				(487	)		-12.7	%			11,871				11,167				(704	)		-6.3	%
Income before income taxes			10,494				2,235				8,259			369.5	%			25,803				18,273				7,530			41.2	%
Income taxes			3,987				838				(3,149	)		-375.8	%			9,805				6,852				(2,953	)		-43.1	%
Net income		$	6,507			$	1,397			$	5,110			365.8	%		$	15,998			$	11,421			$	4,577			40.1	%
Net income per common share:
Basic		$	0.51			$	0.11			$	0.40			363.6	%		$	1.25			$	0.90			$	0.35			38.9	%
Diluted		$	0.50			$	0.11			$	0.39			354.5	%		$	1.22			$	0.88			$	0.34			38.6	%
Weighted-average shares outstanding:
Basic			12,881				12,714				167			1.3	%			12,835				12,687				148			1.2	%
Diluted			13,111				12,934				177			1.4	%			13,063				12,950				113			0.9	%
Return on average assets (annualized)			4.5	%			1.1	%										3.9	%			3.0	%
Return on average equity (annualized)			13.4	%			3.2	%										11.4	%			9.0	%

Regional Management Corp. and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
(in thousands, except par value amounts)
										Increase (Decrease)
		3Q’15				3Q’14				$				%
Assets
Cash		$	4,922			$	3,831			$	1,091			28.5	%
Gross finance receivables			743,003				656,079				86,924			13.2	%
Less unearned finance charges, insurance premiums, and commissions			(141,395	)			(112,726	)			(28,669	)		-25.4	%
Finance receivables			601,608				543,353				58,255			10.7	%
Allowance for credit losses			(37,786	)			(43,301	)			5,515			-12.7	%
Net finance receivables			563,822				500,052				63,770			12.8	%
Property and equipment, net of accumulated depreciation			9,377				8,553				824			9.6	%
Deferred tax asset, net			265				2,915				(2,650	)		-90.9	%
Repossessed assets at net realizable value			343				733				(390	)		-53.2	%
Goodwill			716				716				—			0.0	%
Intangible assets, net			564				978				(414	)		-42.3	%
Other assets			8,957				5,042				3,915			77.6	%
Total assets		$	588,966			$	522,820			$	66,146			12.7	%
Liabilities and Stockholders’ Equity
Liabilities:
Senior revolving credit facility		$	379,617			$	339,323			$	40,294			11.9	%
Accounts payable and accrued expenses			11,754				9,864				1,890			19.2	%
Total liabilities			391,371				349,187				42,184			12.1	%
Commitments and Contingencies
Stockholders’ equity:
Preferred stock, $0.10 par value, 100,000 shares authorized, no sharesissued or outstanding			—				—				—			—
Common stock, $0.10 par value, 1,000,000 shares authorized, 12,914and 12,716 shares issued and outstanding at September 30, 2015 and 2014, respectively			1,291				1,272				19			1.5	%
Additional paid-in-capital			88,913				84,349				4,564			5.4	%
Retained earnings			107,391				88,012				19,379			22.0	%
Total stockholders’ equity			197,595				173,633				23,962			13.8	%
Total liabilities and stockholders’ equity		$	588,966			$	522,820			$	66,146			12.7	%

Regional Management Corp. and Subsidiaries
Selected Financial Data
(Unaudited)
(in thousands, except per share amounts)
		Averages and Yields
		3Q’15						2Q’15						3Q’14
		Average FinanceReceivables			Average Yield (Annualized)			Average FinanceReceivables			Average Yield (Annualized)			Average FinanceReceivables			Average Yield (Annualized)
Branch small loans		$	144,551		43.5	%		$	130,806		45.3	%		$	111,713		48.0	%
Convenience checks			178,940		42.8	%			171,323		45.0	%			187,845		49.0	%
Large loans			106,155		27.6	%			79,756		27.7	%			42,691		26.6	%
Automobile loans			133,857		18.8	%			143,659		19.3	%			168,226		19.6	%
Retail loans			25,022		19.1	%			24,556		18.8	%			27,271		18.7	%
Total interest and fee yield		$	588,525		33.8	%		$	550,100		34.7	%		$	537,746		36.3	%
Total revenue yield		$	588,525		37.4	%		$	550,100		38.5	%		$	537,746		40.1	%

									Components of Increase in Interest and Fee Income 3Q’15 Compared to 3Q’14 Increase (Decrease)
									Volume				Rate				Net
							Branch small loans		$	3,663			$	(1,336	)		$	2,327
							Convenience checks			(1,054	)			(2,798	)			(3,852	)
							Large loans			4,381				110				4,491
							Automobile loans			(1,630	)			(310	)			(1,940	)
							Retail loans			(107	)			30				(77	)
							Change in product mix			(805	)			805				—
							Total increase in interest and fee income		$	4,448			$	(3,499	)		$	949

		Net Loans Originated (1)
		3Q’15			2Q’15			3Q’14			QoQ $ Inc (Dec)				QoQ % Inc (Dec)			YoY $ Inc (Dec)				YoY % Inc (Dec)
Branch small loans		$	63,647		$	80,818		$	62,910		$	(17,171	)		-21.2	%		$	737			1.2	%
Convenience checks			80,675			90,745			111,415			(10,070	)		-11.1	%			(30,740	)		-27.6	%
Large loans			44,911			46,134			11,301			(1,223	)		-2.7	%			33,610			297.4	%
Automobile loans			7,665			11,802			16,222			(4,137	)		-35.1	%			(8,557	)		-52.7	%
Retail loans			7,868			8,136			7,725			(268	)		-3.3	%			143			1.9	%
Total net loans originated		$	204,766		$	237,635		$	209,573		$	(32,869	)		-13.8	%		$	(4,807	)		-2.3	%
(1) Represents the balance of loan origination and refinancing net of unearned finance charges

									Other Key Metrics
									3Q’15				2Q’15				3Q’14
							Net charge-offs		$	12,470			$	12,881			$	13,825
							Net charge-offs (180+ policy change)			—				—				(2,106	)
							Net charge-offs (excluding policy change)		$	12,470			$	12,881			$	11,719
							Percentage of average finance receivables (annualized)			8.5	%			9.4	%			8.7	%
							Provision for credit losses		$	14,085			$	12,102			$	22,542
							Percentage of average finance receivables (annualized)			9.6	%			8.8	%			16.8	%
							Percentage of total revenue			25.6	%			22.8	%			41.8	%
							General and administrative expenses		$	26,182			$	28,243			$	25,284
							Percentage of average finance receivables (annualized)			17.8	%			20.5	%			18.8	%
							Percentage of total revenue			47.5	%			53.3	%			46.9	%
							Same store results:
							Finance receivables at period-end		$	573,221			$	545,928			$	525,468
							Finance receivable growth rate			7.1	%			8.0	%			3.8	%
							Number of branches in calculation			293				281				263

		Finance Receivables by Product
		3Q’15			2Q’15			QoQ $ Inc (Dec)				QoQ % Inc (Dec)			3Q’14			YoY $ Inc (Dec)				YoY % Inc (Dec)
Branch small loans		$	147,664		$	140,161		$	7,503			5.4	%		$	114,398		$	33,266			29.1	%
Convenience checks			180,543			174,786			5,757			3.3	%			196,026			(15,483	)		-7.9	%
Large loans			119,731			93,203			26,528			28.5	%			42,177			77,554			183.9	%
Total core loans			447,938			408,150			39,788			9.7	%			352,601			95,337			27.0	%
Automobile loans			128,131			139,593			(11,462	)		-8.2	%			163,825			(35,694	)		-21.8	%
Retail loans			25,539			24,782			757			3.1	%			26,927			(1,388	)		-5.2	%
Total finance receivables		$	601,608		$	572,525		$	29,083			5.1	%		$	543,353		$	58,255			10.7	%
Number of branches at period end			322			316			6			1.9	%			296			26			8.8	%
Average finance receivables per branch		$	1,868		$	1,812		$	56			3.1	%		$	1,836		$	32			1.7	%
		3Q’14			2Q’14			QoQ $ Inc (Dec)				QoQ % Inc (Dec)
Total finance receivables		$	543,353		$	517,975		$	25,378			4.9	%

		Contractual Delinquency by Aging
		3Q’15						2Q’15						3Q’14
Allowance for credit losses		$	37,786		6.3	%		$	36,171		6.3	%		$	43,301		8.0	%
Current			466,847		77.6	%			454,424		79.4	%			404,756		74.5	%
1 to 29 days past due			90,626		15.1	%			81,275		14.2	%			98,304		18.1	%
Delinquent accounts:
30 to 59 days			17,094		2.8	%			14,665		2.5	%			19,274		3.6	%
60 to 89 days			9,952		1.7	%			8,113		1.4	%			9,406		1.7	%
90 to 119 days			6,874		1.1	%			5,633		1.0	%			5,508		1.0	%
120 to 149 days			5,766		1.0	%			4,597		0.8	%			4,284		0.8	%
150 to 179 days			4,449		0.7	%			3,818		0.7	%			1,821		0.3	%
180 days and over			—		0.0	%			—		0.0	%			—		0.0	%
Total contractual delinquency		$	44,135		7.3	%		$	36,826		6.4	%		$	40,293		7.4	%
Total finance receivables		$	601,608		100.0	%		$	572,525		100.0	%		$	543,353		100.0	%
1 day and over past due		$	134,761		22.4	%		$	118,101		20.6	%		$	138,597		25.5	%

		Contractual Delinquency by Product
		3Q’15						2Q’15						3Q’14
Branch small loans		$	14,166		9.6	%		$	10,804		7.7	%		$	9,209		8.0	%
Convenience checks			15,605		8.6	%			13,561		7.8	%			17,151		8.7	%
Large loans			3,829		3.2	%			2,748		2.9	%			2,114		5.0	%
Automobile loans			9,327		7.3	%			8,619		6.2	%			10,588		6.5	%
Retail loans			1,208		4.7	%			1,094		4.4	%			1,231		4.6	%
Total contractual delinquency		$	44,135		7.3	%		$	36,826		6.4	%		$	40,293		7.4	%

		Quarterly Trend
		3Q’14			4Q’14			1Q’15			2Q’15			3Q’15			QoQ $ B(W)				YoY $ B(W)
Revenue
Interest and fee income		$	48,792		$	48,964		$	47,065		$	47,668		$	49,741		$	2,073			$	949
Insurance income, net			2,636			2,261			2,929			3,120			2,767			(353	)			131
Other income			2,481			2,567			2,530			2,213			2,588			375				107
Total revenue			53,909			53,792			52,524			53,001			55,096			2,095				1,187
Expenses
Provision for credit losses			22,542			15,950			9,712			12,102			14,085			(1,983	)			8,457
Personnel			14,042			17,099			19,760			16,211			15,993			218				(1,951	)
Occupancy			4,221			4,157			4,165			4,298			4,590			(292	)			(369	)
Marketing			1,756			1,842			2,471			2,009			1,134			875				622
Other			5,265			5,298			6,227			5,725			4,465			1,260				800
Total general and administrative			25,284			28,396			32,623			28,243			26,182			2,061				(898	)
Interest expense			3,848			3,780			3,604			3,932			4,335			(403	)			(487	)
Income before income taxes			2,235			5,666			6,585			8,724			10,494			1,770				8,259
Income taxes			838			2,285			2,502			3,316			3,987			(671	)			(3,149	)
Net income		$	1,397		$	3,381		$	4,083		$	5,408		$	6,507		$	1,099			$	5,110
Net income per common share:
Basic		$	0.11		$	0.27		$	0.32		$	0.42		$	0.51		$	0.09			$	0.40
Diluted		$	0.11		$	0.26		$	0.31		$	0.41		$	0.50		$	0.09			$	0.39
Weighted-average shares outstanding:
Basic			12,714			12,744			12,838			12,845			12,881			36				167
Diluted			12,934			12,955			13,061			13,078			13,111			33				177
		3Q’14			4Q’14			1Q’15			2Q’15			3Q’15			QoQ $ Inc (Dec)				YoY $ Inc (Dec)
Total assets			522,820			530,270			507,742			560,981			588,966			27,985				66,146
Finance receivables			543,353			546,192			525,907			572,525			601,608			29,083				58,255
Allowance for credit losses			43,301			40,511			36,950			36,171			37,786			1,615				(5,515	)
Senior revolving credit facility			339,323			341,419			312,538			359,491			379,617			20,126				40,294

		Headcount Trend
		3Q’14		4Q’14		1Q’15		2Q’15		3Q’15		QoQ Inc (Dec)		YoY Inc (Dec)
Branch headcount		1,313		1,335		1,273		1,205		1,208		3		(105	)
2015 new branches						15		40		48		8		48
Total branch headcount		1,313		1,335		1,288		1,245		1,256		11		(57	)
Home office headcount		92		105		125		120		129		9		37
Total headcount		1,405		1,440		1,413		1,365		1,385		20		(20	)
Number of branches		296		300		306		316		322		6		26

		General & Administrative Expenses Trend
		3Q’14			4Q’14			1Q’15			2Q’15			3Q’15			QoQ $ B(W)				YoY $ B(W)
Branch G&A expenses		$	16,866		$	18,020		$	19,284		$	16,596		$	17,946		$	(1,350	)		$	(1,080	)
2015 new branches									86			498			930			(432	)			(930	)
Total branch G&A expenses			16,866			18,020			19,370			17,094			18,876			(1,782	)			(2,010	)
Marketing			1,756			1,842			2,471			2,009			1,134			875				621
Home office G&A expenses			6,662			8,534			10,782			9,140			6,172			2,968				491
Total G&A expenses		$	25,284		$	28,396		$	32,623		$	28,243		$	26,182		$	2,061			$	(898	)

														Averages and Yields
														YTD’15						YTD’14
														Average FinanceReceivables			Average Yield (Annualized)			Average FinanceReceivables			Average Yield (Annualized)
												Branch small loans		$	133,701		44.8	%		$	107,493		47.9	%
												Convenience checks			178,196		44.3	%			174,057		45.2	%
												Large loans			79,806		27.4	%			42,585		26.8	%
												Automobile loans			142,417		19.1	%			173,252		19.7	%
												Retail loans			24,983		18.7	%			28,879		18.3	%
												Total interest and fee yield		$	559,103		34.5	%		$	526,266		34.4	%
												Total revenue yield		$	559,103		38.3	%		$	526,266		38.2	%

								Components of Increase in Interest and Fee Income YTD’15 Compared to YTD’14 Increase (Decrease)
								Volume				Rate				Net
						Branch small loans		$	8,935			$	(2,665	)		$	6,270
						Convenience checks			1,389				(1,215	)			174
						Large loans			7,635				169				7,804
						Automobile loans			(4,445	)			(700	)			(5,145	)
						Retail loans			(544	)			82				(462	)
						Change in product mix			(4,548	)			4,548				—
						Total increase in interest and fee income		$	8,422			$	219			$	8,641

														Net Loans Originated (1)
														YTD’15			YTD’14			YTD $ Inc (Dec)				YTD % Inc (Dec)
												Branch small loans		$	195,835		$	160,293		$	35,542			22.2	%
												Convenience checks			232,074			238,785			(6,711	)		-2.8	%
												Large loans			120,874			32,995			87,879			266.3	%
												Automobile loans			34,057			51,326			(17,269	)		-33.6	%
												Retail loans			22,731			22,350			381			1.7	%
												Total net loans originated		$	605,571		$	505,749		$	99,822			19.7	%
												(1) Represents the balance of loan origination and refinancing net of unearned finance charges

														Other Key Metrics
														YTD’15				YTD’14
												Net charge-offs		$	38,624			$	39,894
												Net charge-offs (180+ policy change)			—				(2,106	)
												Net charge-offs (excluding policy change)		$	38,624			$	37,788
												Percentage of average finance receivables (annualized)			9.2	%			9.6	%
												Provision for credit losses		$	35,899			$	53,106
												Percentage of average finance receivables (annualized)			8.6	%			13.5	%
												Percentage of total revenue			22.4	%			35.2	%
												General and administrative expenses		$	87,048			$	68,381
												Percentage of average finance receivables (annualized)			20.8	%			17.3	%
												Percentage of total revenue			54.2	%			45.3	%

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
		YTD’15			Adjustments				Non-GAAP
General and administrative expenses		$	87,048		$	(2,676	)(1)(2)(3)		$	84,372
Income taxes		$	9,805		$	1,017	(5)		$	10,822
Net income		$	15,998		$	1,659			$	17,657
Diluted net income per common share		$	1.22		$	0.13			$	1.35

		Non-GAAP Reconciliation
		YTD’14			Adjustments				Non-GAAP
General and administrative expenses		$	68,381		$	(49	)(2)(4)		$	68,332
Income taxes		$	6,852		$	18	(5)		$	6,870
Net income		$	11,421		$	31			$	11,452
Diluted net income per common share		$	0.88		$	—			$	0.88

(1)		Exclude executive retirement agreement costs of $533
(2)		Exclude loan system conversion costs of $613 and $1,437 for YTD’15 and YTD’14
(3)		Exclude CEO equity award costs of $1,530
(4)		Benefit related to vacation policy change of $1,388
(5)		Tax effect of the adjustments

View source version on businesswire.com: http://www.businesswire.com/news/home/20151022006515/en/

Investor Relations
Garrett Edson, 203-682-8331

Source: Regional Management Corp.

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