Le Lézard
Classified in: Business, Covid-19 virus
Subjects: EARNINGS, Dividend, Conference Call, Webcast

Regional Management Corp. Announces Third Quarter 2020 Results


Regional Management Corp. (NYSE: RM), a diversified consumer finance company, today announced results for the third quarter ended September 30, 2020.

"I am delighted with our third quarter performance, which is a validation of our sustainable operating model, our team's ability to execute in a challenging environment, and the fundamental resilience of our customers," said Robert W. Beck, President and Chief Executive Officer of Regional Management Corp. "Our omni-channel strategy, including our implementation of remote loan closings, enabled us to grow our loan portfolio by $37 million in the third quarter despite macroeconomic headwinds. We accomplished this growth while continuing to maintain our underwriting standards and our portfolio's stable credit profile."

"Thanks in part to solid execution on our most recent securitization transaction in September, we also continue to maintain ample liquidity, including $208 million of immediately available liquidity as of October 23, 2020, which positions us well to withstand any additional economic challenges," added Mr. Beck. "To that end, based on our consistently strong performance, liquidity profile, excess capital, and confidence in our future prospects, we are very pleased that our Board of Directors has authorized a new $30 million share repurchase program and initiated a quarterly dividend of $0.20 per common share beginning in the fourth quarter of 2020. We are confident in our business model's ability to generate excess capital to return to our shareholders on a regular basis. The recurring dividend and repurchase programs allow us to return significant value to our shareholders, while retaining ample capital to continue our investment in omni-channel and digital initiatives that will expand our market share and generate sustainable long-term profitable growth."

Third Quarter 2020 Highlights

Quarterly Dividend and Share Repurchase Program

Regional's Board of Directors has approved the initiation of a quarterly dividend of $0.20 per common share. The initial dividend will be paid on December 4, 2020 to shareholders of record as of the close of business on November 17, 2020. The declaration and payment of any future dividend will be subject to the discretion of Regional's Board of Directors and will depend on a variety of factors, including the company's financial condition and results of operations.

Regional's Board of Directors has also authorized a new share repurchase program allowing for the repurchase of up to $30 million of its outstanding common stock. The authorization is effective immediately and will continue through October 22, 2022.

Stock repurchases under the share repurchase program may be made in the open market at prevailing market prices, through privately negotiated transactions, or through other structures in accordance with applicable federal securities laws, at times and in amounts as management deems appropriate. The timing and the amount of any common stock repurchases will be determined by the company's management based on its evaluation of market conditions, the company's liquidity needs, legal and contractual requirements and restrictions (including covenants in the company's credit agreements), share price, and other factors. Repurchases of common stock may be made under a Rule 10b5-1 plan, which would permit common stock to be repurchased when the company might otherwise be precluded from doing so under insider trading laws. The repurchase program does not obligate the company to purchase any particular number of shares and may be suspended, modified, or discontinued at any time without prior notice.

Liquidity and Capital Resources

As of September 30, 2020, the company had net finance receivables of $1.1 billion and outstanding long-term debt of $700.1 million ($698.3 million of outstanding debt and $1.8 million of interest payable), consisting of:

The company's unused capacity on its revolving credit facilities (subject to the borrowing base) was $507 million, or 66.2%, as of September 30, 2020.

The company had a funded debt-to-equity ratio of 2.6 to 1.0 and a stockholders' equity ratio of 26.3%, each as of September 30, 2020. On a non-GAAP basis, the company had a funded debt-to-tangible equity ratio of 2.7 to 1.0, as of September 30, 2020. Please refer to the reconciliations of non-GAAP measures to comparable GAAP measures included at the end of this press release.

Branch Network

As of September 30, 2020, the company's branch network consisted of 368 locations. During the fourth quarter of 2020, subject to the changing economic environment, the company plans to open one de novo branch.

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 368 branch locations across 11 states in the Southeastern, Southwestern, Mid-Atlantic, and Midwestern United States, as of September 30, 2020. 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 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: changes in general economic conditions, including levels of unemployment and bankruptcies; the impact of the recent outbreak of a novel coronavirus (COVID-19), including on Regional Management's access to liquidity and the credit risk of Regional Management's finance receivable portfolio; risks associated with Regional Management's ability to timely and effectively implement, transition to, and maintain the necessary information technology systems, infrastructure, processes, and controls to support its operations and initiatives; risks associated with Regional Management's loan origination and servicing software system, including the risk of prolonged system outages; risks related to opening new branches, including the ability or inability to open new branches as planned; risks inherent in making loans, including credit risk, repayment risk, and value of collateral, which risks may increase in light of adverse or recessionary economic conditions; risks associated with the implementation of new underwriting models and processes, including as to the effectiveness of new custom scorecards; risks relating to Regional Management's asset-backed securitization transactions; changes in interest rates; the risk that Regional Management's existing sources of liquidity become insufficient to satisfy its needs or that its access to these sources becomes unexpectedly restricted; changes in federal, state, or local laws, regulations, or regulatory policies and practices, and risks associated with the manner in which laws and regulations are interpreted, implemented, and enforced; changes in accounting standards, rules, and interpretations, and the failure of related assumptions and estimates, including those associated with the implementation of current expected credit loss (CECL) accounting; the impact of changes in tax laws, guidance, and interpretations; 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 credit losses); changes in Regional Management's markets and general changes in the economy (particularly in the markets served by Regional Management); changes in the competitive environment in which Regional Management operates or a decrease in the demand for its products; the timing and amount of future cash dividend payments; risks related to acquisitions; changes in operating and administrative expenses; and the departure, transition, or replacement of key personnel. 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)

(in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

Better (Worse)

 

 

 

 

 

 

 

 

 

 

Better (Worse)

 

 

 

3Q 20

 

 

3Q 19

 

 

$

 

 

%

 

 

YTD 20

 

 

YTD 19

 

 

$

 

 

%

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fee income

 

$

81,306

 

 

$

83,089

 

 

$

(1,783

)

 

 

(2.1

)%

 

$

248,370

 

 

$

233,385

 

 

$

14,985

 

 

 

6.4

%

Insurance income, net

 

 

6,861

 

 

 

5,087

 

 

 

1,774

 

 

 

34.9

%

 

 

20,460

 

 

 

14,266

 

 

 

6,194

 

 

 

43.4

%

Other income

 

 

2,371

 

 

 

3,531

 

 

 

(1,160

)

 

 

(32.9

)%

 

 

7,632

 

 

 

10,078

 

 

 

(2,446

)

 

 

(24.3

)%

Total revenue

 

 

90,538

 

 

 

91,707

 

 

 

(1,169

)

 

 

(1.3

)%

 

 

276,462

 

 

 

257,729

 

 

 

18,733

 

 

 

7.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for credit losses

 

 

22,089

 

 

 

24,515

 

 

 

2,426

 

 

 

9.9

%

 

 

99,110

 

 

 

73,572

 

 

 

(25,538

)

 

 

(34.7

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Personnel

 

 

26,207

 

 

 

23,791

 

 

 

(2,416

)

 

 

(10.2

)%

 

 

82,581

 

 

 

68,695

 

 

 

(13,886

)

 

 

(20.2

)%

Occupancy

 

 

6,851

 

 

 

6,367

 

 

 

(484

)

 

 

(7.6

)%

 

 

18,875

 

 

 

18,742

 

 

 

(133

)

 

 

(0.7

)%

Marketing

 

 

3,249

 

 

 

2,397

 

 

 

(852

)

 

 

(35.5

)%

 

 

6,373

 

 

 

6,309

 

 

 

(64

)

 

 

(1.0

)%

Other

 

 

7,447

 

 

 

7,612

 

 

 

165

 

 

 

2.2

%

 

 

23,693

 

 

 

22,347

 

 

 

(1,346

)

 

 

(6.0

)%

Total general and administrative

 

 

43,754

 

 

 

40,167

 

 

 

(3,587

)

 

 

(8.9

)%

 

 

131,522

 

 

 

116,093

 

 

 

(15,429

)

 

 

(13.3

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

9,300

 

 

 

10,348

 

 

 

1,048

 

 

 

10.1

%

 

 

28,596

 

 

 

29,840

 

 

 

1,244

 

 

 

4.2

%

Income before income taxes

 

 

15,395

 

 

 

16,677

 

 

 

(1,282

)

 

 

(7.7

)%

 

 

17,234

 

 

 

38,224

 

 

 

(20,990

)

 

 

(54.9

)%

Income taxes

 

 

4,157

 

 

 

4,105

 

 

 

(52

)

 

 

(1.3

)%

 

 

4,851

 

 

 

9,175

 

 

 

4,324

 

 

 

47.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

11,238

 

 

$

12,572

 

 

$

(1,334

)

 

 

(10.6

)%

 

$

12,383

 

 

$

29,049

 

 

$

(16,666

)

 

 

(57.4

)%

Net income per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

1.02

 

 

$

1.11

 

 

$

(0.09

)

 

 

(8.1

)%

 

$

1.13

 

 

$

2.51

 

 

$

(1.38

)

 

 

(55.0

)%

Diluted

 

$

1.01

 

 

$

1.08

 

 

$

(0.07

)

 

 

(6.5

)%

 

$

1.11

 

 

$

2.44

 

 

$

(1.33

)

 

 

(54.5

)%

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

10,977

 

 

 

11,302

 

 

 

325

 

 

 

2.9

%

 

 

10,945

 

 

 

11,572

 

 

 

627

 

 

 

5.4

%

Diluted

 

 

11,092

 

 

 

11,677

 

 

 

585

 

 

 

5.0

%

 

 

11,117

 

 

 

11,924

 

 

 

807

 

 

 

6.8

%

Return on average assets (annualized)

 

 

4.4

%

 

 

4.7

%

 

 

 

 

 

 

 

 

 

 

1.6

%

 

 

3.9

%

 

 

 

 

 

 

 

 

Return on average equity (annualized)

 

 

16.9

%

 

 

17.2

%

 

 

 

 

 

 

 

 

 

 

6.2

%

 

 

13.4

%

 

 

 

 

 

 

 

 

Regional Management Corp. and Subsidiaries

Consolidated Balance Sheets

(Unaudited)

(in thousands, except par value amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase (Decrease)

 

 

 

3Q 20

 

 

3Q 19

 

 

$

 

 

%

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash

 

$

4,292

 

 

$

2,044

 

 

$

2,248

 

 

 

110.0

%

Net finance receivables

 

 

1,059,554

 

 

 

1,067,086

 

 

 

(7,532

)

 

 

(0.7

)%

Unearned insurance premiums

 

 

(30,024

)

 

 

(24,900

)

 

 

(5,124

)

 

 

(20.6

)%

Allowance for credit losses

 

 

(144,000

)

 

 

(60,900

)

 

 

(83,100

)

 

 

(136.5

)%

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

 

 

885,530

 

 

 

981,286

 

 

 

(95,756

)

 

 

(9.8

)%

Restricted cash

 

 

58,219

 

 

 

43,659

 

 

 

14,560

 

 

 

33.3

%

Lease assets

 

 

27,855

 

 

 

25,688

 

 

 

2,167

 

 

 

8.4

%

Property and equipment

 

 

15,054

 

 

 

14,512

 

 

 

542

 

 

 

3.7

%

Intangible assets

 

 

8,677

 

 

 

9,574

 

 

 

(897

)

 

 

(9.4

)%

Deferred tax asset

 

 

22,960

 

 

 

1,445

 

 

 

21,515

 

 

 

1488.9

%

Other assets

 

 

14,972

 

 

 

7,964

 

 

 

7,008

 

 

 

88.0

%

Total assets

 

$

1,037,559

 

 

$

1,086,172

 

 

$

(48,613

)

 

 

(4.5

)%

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term debt

 

$

700,139

 

 

$

743,835

 

 

$

(43,696

)

 

 

(5.9

)%

Unamortized debt issuance costs

 

 

(8,603

)

 

 

(7,828

)

 

 

(775

)

 

 

(9.9

)%

Net long-term debt

 

 

691,536

 

 

 

736,007

 

 

 

(44,471

)

 

 

(6.0

)%

Accounts payable and accrued expenses

 

 

43,576

 

 

 

25,764

 

 

 

17,812

 

 

 

69.1

%

Lease liabilities

 

 

29,983

 

 

 

27,714

 

 

 

2,269

 

 

 

8.2

%

Total liabilities

 

 

765,095

 

 

 

789,485

 

 

 

(24,390

)

 

 

(3.1

)%

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, 13,821 shares issued and 11,337 shares outstanding at September 30, 2020 and 13,513 shares issued and 11,409 shares outstanding at September 30, 2019)

 

 

1,382

 

 

 

1,351

 

 

 

31

 

 

 

2.3

%

Additional paid-in-capital

 

 

105,866

 

 

 

101,682

 

 

 

4,184

 

 

 

4.1

%

Retained earnings

 

 

215,290

 

 

 

233,146

 

 

 

(17,856

)

 

 

(7.7

)%

Treasury stock (2,484 shares at September 30, 2020 and 2,104 shares at September 30, 2019)

 

 

(50,074

)

 

 

(39,492

)

 

 

(10,582

)

 

 

(26.8

)%

Total stockholders' equity

 

 

272,464

 

 

 

296,687

 

 

 

(24,223

)

 

 

(8.2

)%

Total liabilities and stockholders' equity

 

$

1,037,559

 

 

$

1,086,172

 

 

$

(48,613

)

 

 

(4.5

)%

Regional Management Corp. and Subsidiaries

Selected Financial Data

(Unaudited)

(in thousands, except per share amounts)

 

 

 

Net Finance Receivables by Product

 

 

 

3Q 20

 

 

2Q 20

 

 

QoQ $

Inc (Dec)

 

 

QoQ %

Inc (Dec)

 

 

3Q 19

 

 

YoY $

Inc (Dec)

 

 

YoY %

Inc (Dec)

 

Small loans

 

$

382,785

 

 

$

380,083

 

 

$

2,702

 

 

 

0.7

%

 

$

453,969

 

 

$

(71,184

)

 

 

(15.7

)%

Large loans

 

 

655,932

 

 

 

618,134

 

 

 

37,798

 

 

 

6.1

%

 

 

574,988

 

 

 

80,944

 

 

 

14.1

%

Total core loans

 

 

1,038,717

 

 

 

998,217

 

 

 

40,500

 

 

 

4.1

%

 

 

1,028,957

 

 

 

9,760

 

 

 

0.9

%

Automobile loans

 

 

4,892

 

 

 

6,059

 

 

 

(1,167

)

 

 

(19.3

)%

 

 

12,144

 

 

 

(7,252

)

 

 

(59.7

)%

Retail loans

 

 

15,945

 

 

 

18,359

 

 

 

(2,414

)

 

 

(13.1

)%

 

 

25,985

 

 

 

(10,040

)

 

 

(38.6

)%

Total net finance receivables

 

$

1,059,554

 

 

$

1,022,635

 

 

$

36,919

 

 

 

3.6

%

 

$

1,067,086

 

 

$

(7,532

)

 

 

(0.7

)%

Number of branches at period end

 

 

368

 

 

 

368

 

 

 

?

 

 

 

0.0

%

 

 

358

 

 

 

10

 

 

 

2.8

%

Average net finance receivables per branch

 

$

2,879

 

 

$

2,779

 

 

$

100

 

 

 

3.6

%

 

$

2,981

 

 

$

(102

)

 

 

(3.4

)%

 

 

Averages and Yields

 

 

 

3Q 20

 

 

2Q 20

 

 

3Q 19

 

 

 

Average Net Finance Receivables

 

 

Average Yield (Annualized)

 

 

Average Net Finance Receivables

 

 

Average Yield (Annualized)

 

 

Average Net Finance Receivables

 

 

Average Yield (Annualized)

 

Small loans

 

$

377,390

 

 

 

37.7

%

 

$

404,019

 

 

 

36.2

%

 

$

446,621

 

 

 

38.4

%

Large loans

 

 

632,106

 

 

 

28.3

%

 

 

618,860

 

 

 

27.3

%

 

 

546,582

 

 

 

28.1

%

Automobile loans

 

 

5,492

 

 

 

13.5

%

 

 

6,820

 

 

 

14.8

%

 

 

13,834

 

 

 

14.9

%

Retail loans

 

 

17,145

 

 

 

18.9

%

 

 

20,114

 

 

 

18.0

%

 

 

26,902

 

 

 

19.1

%

Total interest and fee yield

 

$

1,032,133

 

 

 

31.5

%

 

$

1,049,813

 

 

 

30.5

%

 

$

1,033,939

 

 

 

32.1

%

Total revenue yield

 

$

1,032,133

 

 

 

35.1

%

 

$

1,049,813

 

 

 

34.2

%

 

$

1,033,939

 

 

 

35.5

%

 

 

Components of Decrease in Interest and Fee Income

 

 

 

3Q 20 Compared to 3Q 19

 

 

 

Increase (Decrease)

 

 

 

Volume

 

 

Rate

 

 

Volume & Rate

 

 

Total

 

Small loans

 

$

(6,646

)

 

$

(724

)

 

$

113

 

 

$

(7,257

)

Large loans

 

 

6,011

 

 

 

233

 

 

 

37

 

 

 

6,281

 

Automobile loans

 

 

(312

)

 

 

(48

)

 

 

29

 

 

 

(331

)

Retail loans

 

 

(466

)

 

 

(16

)

 

 

6

 

 

 

(476

)

Product mix

 

 

1,268

 

 

 

(1,086

)

 

 

(182

)

 

 

?

 

Total decrease in interest and fee income

 

$

(145

)

 

$

(1,641

)

 

$

3

 

 

$

(1,783

)

 

 

Net Loans Originated (1) (2)

 

 

 

3Q 20

 

 

2Q 20

 

 

QoQ $

Inc (Dec)

 

 

QoQ %

Inc (Dec)

 

 

3Q 19

 

 

YoY $

Inc (Dec)

 

 

YoY %

Inc (Dec)

 

Small loans

 

$

144,132

 

 

$

79,265

 

 

$

64,867

 

 

 

81.8

%

 

$

177,629

 

 

$

(33,497

)

 

 

(18.9

)%

Large loans

 

 

162,120

 

 

 

90,980

 

 

 

71,140

 

 

 

78.2

%

 

 

166,835

 

 

 

(4,715

)

 

 

(2.8

)%

Retail loans

 

 

1,835

 

 

 

1,907

 

 

 

(72

)

 

 

(3.8

)%

 

 

4,421

 

 

 

(2,586

)

 

 

(58.5

)%

Total net loans originated

 

$

308,087

 

 

$

172,152

 

 

$

135,935

 

 

 

79.0

%

 

$

348,885

 

 

$

(40,798

)

 

 

(11.7

)%

(1) Represents the balance of loan origination and refinancing net of unearned finance charges.
(2) The company ceased originating automobile loans in November 2017.

 

 

Other Key Metrics

 

 

 

3Q 20

 

 

2Q 20

 

 

3Q 19

 

Net credit losses

 

$

20,089

 

 

$

27,899

 

 

$

20,815

 

Percentage of average net finance receivables (annualized)

 

 

7.8

%

 

 

10.6

%

 

 

8.1

%

Provision for loan losses (1)

 

$

22,089

 

 

$

27,499

 

 

$

24,515

 

Percentage of average net finance receivables (annualized)

 

 

8.6

%

 

 

10.5

%

 

 

9.5

%

Percentage of total revenue

 

 

24.4

%

 

 

30.6

%

 

 

26.7

%

General and administrative expenses (2)

 

$

43,754

 

 

$

41,525

 

 

$

40,167

 

Percentage of average net finance receivables (annualized)

 

 

17.0

%

 

 

15.8

%

 

 

15.5

%

Percentage of total revenue

 

 

48.3

%

 

 

46.2

%

 

 

43.8

%

Same store results (3):

 

 

 

 

 

 

 

 

 

 

 

 

Net finance receivables at period-end

 

$

1,049,327

 

 

$

1,016,776

 

 

$

1,053,166

 

Net finance receivable growth rate

 

 

(1.5

)%

 

 

2.2

%

 

 

17.1

%

Number of branches in calculation

 

 

347

 

 

 

349

 

 

 

332

 

(1) Includes COVID-19 pandemic impacts to provision for credit losses of $(1,500) and $9,500 for 3Q 20 and 2Q 20, respectively.
(2) Includes non-operating severance costs of $778 for 3Q 20.
(3) 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 20

 

 

2Q 20

 

 

3Q 19

 

Allowance for credit losses (1)

 

$

144,000

 

 

 

13.6

%

 

$

142,000

 

 

 

13.9

%

 

$

60,900

 

 

 

5.7

%

 

Current

 

 

929,778

 

 

 

87.8

%

 

 

896,928

 

 

 

87.8

%

 

 

896,051

 

 

 

83.9

%

1 to 29 days past due

 

 

79,838

 

 

 

7.5

%

 

 

76,172

 

 

 

7.4

%

 

 

102,120

 

 

 

9.6

%

Delinquent accounts:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30 to 59 days

 

 

16,105

 

 

 

1.5

%

 

 

15,277

 

 

 

1.4

%

 

 

23,058

 

 

 

2.2

%

60 to 89 days

 

 

11,014

 

 

 

1.0

%

 

 

9,764

 

 

 

1.0

%

 

 

16,240

 

 

 

1.5

%

90 to 119 days

 

 

8,375

 

 

 

0.8

%

 

 

7,014

 

 

 

0.7

%

 

 

11,797

 

 

 

1.1

%

120 to 149 days

 

 

7,967

 

 

 

0.8

%

 

 

8,081

 

 

 

0.8

%

 

 

9,728

 

 

 

0.9

%

150 to 179 days

 

 

6,477

 

 

 

0.6

%

 

 

9,399

 

 

 

0.9

%

 

 

8,092

 

 

 

0.8

%

Total contractual delinquency

 

$

49,938

 

 

 

4.7

%

 

$

49,535

 

 

 

4.8

%

 

$

68,915

 

 

 

6.5

%

Total net finance receivables

 

$

1,059,554

 

 

 

100.0

%

 

$

1,022,635

 

 

 

100.0

%

 

$

1,067,086

 

 

 

100.0

%

1 day and over past due

 

$

129,776

 

 

 

12.2

%

 

$

125,707

 

 

 

12.2

%

 

$

171,035

 

 

 

16.1

%

 

 

Contractual Delinquency by Product

 

 

 

3Q 20

 

 

2Q 20

 

 

3Q 19

 

Small loans

 

$

22,904

 

 

 

6.0

%

 

$

24,465

 

 

 

6.4

%

 

$

36,719

 

 

 

8.1

%

Large loans

 

 

25,489

 

 

 

3.9

%

 

 

23,660

 

 

 

3.8

%

 

 

28,852

 

 

 

5.0

%

Automobile loans

 

 

337

 

 

 

6.9

%

 

 

291

 

 

 

4.8

%

 

 

1,153

 

 

 

9.5

%

Retail loans

 

 

1,208

 

 

 

7.6

%

 

 

1,119

 

 

 

6.1

%

 

 

2,191

 

 

 

8.4

%

Total contractual delinquency

 

$

49,938

 

 

 

4.7

%

 

$

49,535

 

 

 

4.8

%

 

$

68,915

 

 

 

6.5

%

(1) Includes incremental COVID-19 allowance for credit losses of $31,900 and $33,400 in 3Q 20 and 2Q 20, respectively.

 

 

Income Statement Quarterly Trend

 

 

 

3Q 19

 

 

4Q 19

 

 

1Q 20

 

 

2Q 20

 

 

3Q 20

 

 

QoQ $

B(W)

 

 

YoY $

B(W)

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fee income

 

$

83,089

 

 

$

87,784

 

 

$

86,997

 

 

$

80,067

 

 

$

81,306

 

 

$

1,239

 

 

$

(1,783

)

Insurance income, net

 

 

5,087

 

 

 

6,551

 

 

 

5,949

 

 

 

7,650

 

 

 

6,861

 

 

 

(789

)

 

 

1,774

 

Other income

 

 

3,531

 

 

 

3,649

 

 

 

3,128

 

 

 

2,133

 

 

 

2,371

 

 

 

238

 

 

 

(1,160

)

Total revenue

 

 

91,707

 

 

 

97,984

 

 

 

96,074

 

 

 

89,850

 

 

 

90,538

 

 

 

688

 

 

 

(1,169

)

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for credit losses

 

 

24,515

 

 

 

26,039

 

 

 

49,522

 

 

 

27,499

 

 

 

22,089

 

 

 

5,410

 

 

 

2,426

 

 

Personnel

 

 

23,791

 

 

 

25,305

 

 

 

29,511

 

 

 

26,863

 

 

 

26,207

 

 

 

656

 

 

 

(2,416

)

Occupancy

 

 

6,367

 

 

 

5,876

 

 

 

5,771

 

 

 

6,253

 

 

 

6,851

 

 

 

(598

)

 

 

(484

)

Marketing

 

 

2,397

 

 

 

1,897

 

 

 

1,686

 

 

 

1,438

 

 

 

3,249

 

 

 

(1,811

)

 

 

(852

)

Other

 

 

7,612

 

 

 

7,813

 

 

 

9,275

 

 

 

6,971

 

 

 

7,447

 

 

 

(476

)

 

 

165

 

Total general and administrative

 

 

40,167

 

 

 

40,891

 

 

 

46,243

 

 

 

41,525

 

 

 

43,754

 

 

 

(2,229

)

 

 

(3,587

)

 

Interest expense

 

 

10,348

 

 

 

10,285

 

 

 

10,159

 

 

 

9,137

 

 

 

9,300

 

 

 

(163

)

 

 

1,048

 

Income (loss) before income taxes

 

 

16,677

 

 

 

20,769

 

 

 

(9,850

)

 

 

11,689

 

 

 

15,395

 

 

 

3,706

 

 

 

(1,282

)

Income taxes

 

 

4,105

 

 

 

5,086

 

 

 

(3,525

)

 

 

4,219

 

 

 

4,157

 

 

 

62

 

 

 

(52

)

Net income (loss)

 

$

12,572

 

 

$

15,683

 

 

$

(6,325

)

 

$

7,470

 

 

$

11,238

 

 

$

3,768

 

 

$

(1,334

)

Net income (loss) per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

1.11

 

 

$

1.44

 

 

$

(0.58

)

 

$

0.68

 

 

$

1.02

 

 

$

0.34

 

 

$

(0.09

)

Diluted

 

$

1.08

 

 

$

1.38

 

 

$

(0.56

)

 

$

0.68

 

 

$

1.01

 

 

$

0.33

 

 

$

(0.07

)

Weighted-average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

11,302

 

 

 

10,893

 

 

 

10,897

 

 

 

10,962

 

 

 

10,977

 

 

 

(15

)

 

 

325

 

Diluted

 

 

11,677

 

 

 

11,327

 

 

 

11,253

 

 

 

11,013

 

 

 

11,092

 

 

 

(79

)

 

 

585

 

 

Net interest margin

 

$

81,359

 

 

$

87,699

 

 

$

85,915

 

 

$

80,713

 

 

$

81,238

 

 

$

525

 

 

$

(121

)

Net credit margin

 

$

56,844

 

 

$

61,660

 

 

$

36,393

 

 

$

53,214

 

 

$

59,149

 

 

$

5,935

 

 

$

2,305

 

 

 

Balance Sheet Quarterly Trend

 

 

 

3Q 19

 

 

4Q 19

 

 

1Q 20

 

 

2Q 20

 

 

3Q 20

 

 

QoQ $

Inc (Dec)

 

 

YoY $

Inc (Dec)

 

Total assets

 

$

1,086,172

 

 

$

1,158,540

 

 

$

1,078,890

 

 

$

1,000,225

 

 

$

1,037,559

 

 

$

37,334

 

 

$

(48,613

)

Net finance receivables

 

$

1,067,086

 

 

$

1,133,404

 

 

$

1,102,285

 

 

$

1,022,635

 

 

$

1,059,554

 

 

$

36,919

 

 

$

(7,532

)

Allowance for credit losses

 

$

60,900

 

 

$

62,200

 

 

$

142,400

 

 

$

142,000

 

 

$

144,000

 

 

$

2,000

 

 

$

83,100

 

Long-term debt

 

$

743,835

 

 

$

808,218

 

 

$

777,847

 

 

$

683,865

 

 

$

700,139

 

 

$

16,274

 

 

$

(43,696

)

 

 

Other Key Metrics Quarterly Trend

 

 

 

3Q 19

 

 

4Q 19

 

 

1Q 20

 

 

2Q 20

 

 

3Q 20

 

 

QoQ

Inc (Dec)

 

 

YoY

Inc (Dec)

 

Interest and fee yield (annualized)

 

 

32.1

%

 

 

32.0

%

 

 

31.0

%

 

 

30.5

%

 

 

31.5

%

 

 

1.0

%

 

 

(0.6

)%

Efficiency ratio (1)

 

 

43.8

%

 

 

41.7

%

 

 

48.1

%

 

 

46.2

%

 

 

48.3

%

 

 

2.1

%

 

 

4.5

%

Operating expense ratio (2)

 

 

15.5

%

 

 

14.9

%

 

 

16.5

%

 

 

15.8

%

 

 

17.0

%

 

 

1.2

%

 

 

1.5

%

30+ contractual delinquency

 

 

6.5

%

 

 

7.0

%

 

 

6.6

%

 

 

4.8

%

 

 

4.7

%

 

 

(0.1

)%

 

 

(1.8

)%

Net credit loss ratio (3)

 

 

8.1

%

 

 

9.0

%

 

 

10.5

%

 

 

10.6

%

 

 

7.8

%

 

 

(2.8

)%

 

 

(0.3

)%

Book value per share

 

$

26.00

 

 

$

27.49

 

 

$

22.49

 

 

$

23.11

 

 

$

24.03

 

 

$

0.92

 

 

$

(1.97

)

(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 20

 

 

YTD 19

 

 

 

Average Net Finance Receivables

 

 

Average Yield (Annualized)

 

 

Average Net Finance Receivables

 

 

Average Yield (Annualized)

 

Small loans

 

$

413,051

 

 

 

36.9

%

 

$

436,432

 

 

 

38.1

%

Large loans

 

 

628,173

 

 

 

27.7

%

 

 

494,880

 

 

 

27.6

%

Automobile loans

 

 

6,971

 

 

 

13.9

%

 

 

18,327

 

 

 

14.8

%

Retail loans

 

 

20,094

 

 

 

18.2

%

 

 

28,568

 

 

 

18.8

%

Total interest and fee yield

 

$

1,068,289

 

 

 

31.0

%

 

$

978,207

 

 

 

31.8

%

Total revenue yield

 

$

1,068,289

 

 

 

34.5

%

 

$

978,207

 

 

 

35.1

%

 

 

Components of Increase in Interest and Fee Income

 

 

 

YTD 20 Compared to YTD 19

 

 

 

Increase (Decrease)

 

 

 

Volume

 

 

Rate

 

 

Volume & Rate

 

 

Total

 

Small loans

 

$

(6,682

)

 

$

(3,982

)

 

$

213

 

 

$

(10,451

)

Large loans

 

 

27,631

 

 

 

317

 

 

 

85

 

 

 

28,033

 

Automobile loans

 

 

(1,260

)

 

 

(117

)

 

 

72

 

 

 

(1,305

)

Retail loans

 

 

(1,197

)

 

 

(135

)

 

 

40

 

 

 

(1,292

)

Product mix

 

 

3,000

 

 

 

(2,041

)

 

 

(959

)

 

 

?

 

Total increase in interest and fee income

 

$

21,492

 

 

$

(5,958

)

 

$

(549

)

 

$

14,985

 

 

 

Net Loans Originated (1) (2)

 

 

 

YTD 20

 

 

YTD 19

 

 

YTD $

Inc (Dec)

 

 

YTD %

Inc (Dec)

 

Small loans

 

$

343,421

 

 

$

481,314

 

 

$

(137,893

)

 

 

(28.6

)%

Large loans

 

 

358,748

 

 

 

420,276

 

 

 

(61,528

)

 

 

(14.6

)%

Retail loans

 

 

7,315

 

 

 

15,797

 

 

 

(8,482

)

 

 

(53.7

)%

Total net loans originated

 

$

709,484

 

 

$

917,387

 

 

$

(207,903

)

 

 

(22.7

)%

(1) Represents the balance of loan origination and refinancing net of unearned finance charges.
(2) The company ceased originating automobile loans in November 2017.

 

 

Other Key Metrics

 

 

 

YTD 20

 

 

YTD 19

 

Net credit losses

 

$

77,410

 

 

$

70,972

 

Percentage of average net finance receivables (annualized)

 

 

9.7

%

 

 

9.7

%

Provision for loan losses (1)

 

$

99,110

 

 

$

73,572

 

Percentage of average net finance receivables (annualized)

 

 

12.4

%

 

 

10.0

%

Percentage of total revenue

 

 

35.8

%

 

 

28.5

%

General and administrative expenses (2) (3) (4)

 

$

131,522

 

 

$

116,093

 

Percentage of average net finance receivables (annualized)

 

 

16.4

%

 

 

15.8

%

Percentage of total revenue

 

 

47.6

%

 

 

45.0

%

(1) Includes COVID-19 pandemic impacts to provision for credit losses of $31,900 for YTD 20.
(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 20

 

Long-term debt

 

$

700,139

 

 

Total stockholders' equity

 

 

272,464

 

Less: Intangible assets

 

 

8,677

 

Tangible equity (non-GAAP)

 

$

263,787

 

 

Funded debt-to-equity ratio

 

 

2.6

x

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

 

 

2.7

x

 


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Hudson and Hudson of San Francisco, a private financial consulting group since 1989, gained fame through both its business and individual survival advice, especially in times of economic challenge. The Wall Street Journal touted Hudson as the...

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Senior government officials from several nations patronized the launch of the Digital Cooperation Organization (DCO) Thursday ? a global organization aimed at strengthening cooperation across all innovation driven areas and accelerating growth of the...

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? R&D activities focused on advancing the development of innovative delivery systems and yeast beta glucan as a potential inhalable therapeutic for COVID-19 ? ? Q3 2020 sales of $3,476,000 compared to $2,908,000 for Q3 2019, representing a 20%...

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NAV CANADA today announced that it has called for a joint meeting (the "Meeting") of holders of all outstanding bonds (collectively, the "Bonds") and holders of all outstanding series of notes (collectively, the "Notes"), respectively, and commenced...

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Sleep Country Canada Holdings Inc. ("Sleep Country" or the "Company") , the leading specialty mattress retailer in Canada, is building on an unprecedented third quarter with strength across its full omni-channel offering, by introducing its new...



News published on 29 october 2020 at 16:20 and distributed by: