New High Recorded on the Back of Strong Quarterly Results - Report on Regional Management

Aug 03, 2015, 09:30 ET from www.aciassociation.com

NEW YORK, August 3, 2015 /PRNewswire/ --

ACI Association has initiated research coverage on Regional Management Corp. (NYSE: RM). Select highlights from the internally released reports are being made available to the general public (included below), with access to the entirety of the research available to new members.

Today, membership is open to readers on a complementary basis at the following URL: http://www.aciassociation.com/?c=RM

Highlights from our RM Report include:

  • Regional Reaches a New 52-Week High Following Strong Q2 Earnings - Regional Management Corp. announced diluted earnings per share of $0.41 for the second quarter ended June 30, 2015, leading to a positive earnings surprise of 10.80%. According to yahoo finance, analysts were expecting the Company to earn $0.37 per share in Q2. Shares of the Company reached a new 52-week high of $19.92 on the following day, July 24 and closed at $19.11, with a volume of 130,320 shares. The stock had previously closed at $17.34.
  • Strong Receivable Performance Lead to a Robust Top line - Regional Management reported Q2 2015 total revenue of $53.0 million, an 11.7% increase from $47.4 million in the prior-year period. Interest and fee income for the second quarter of 2015 witnessed an 11.0% YoY increase to $47.7 million from $43.0 million in the prior-year period, primarily due to a significant increase in the portfolios of both small and large installment loans compared to the prior-year period.
  • Important Loan Categories Continue to Grow - Large loan finance receivables as of June 30, 2015 were $93.2 million, an increase of 47.2% sequentially and 116.8% compared to the prior-year period. Branch small loan and convenience check finance receivables, collectively, as of June 30, 2015 were $314.9 million, an increase of 8.0% QoQ and 14.3% YoY.
  • Level of Delinquency Returns to a More Normalized Profile for the Business - Total delinquencies as a percentage of total finance receivables as of June 30, 2015 were 20.6%, compared to 23.6% as of June 30, 2014 and record low of 19.2% as of March 31, 2015. Provision for credit losses in the second quarter of 2015 was $12.1 million versus $13.6 million in the prior-year period. On a sequential basis however, provision for credit losses increased 24.6%, reflecting the significant increase in small and large loan originations during the second quarter of 2015.
  • A Stronger Bottom Line Despite Rising Operating Expenses -Although general and administrative expenses for the second quarter of 2015 increased 21.7% YoY due to additional branch and home office expenses, net income saw a positive growth of 22.5% on the back of higher revenues. Q2 2015 Profit was $5.4 million compared to $4.4 million in the prior-year period.
  • The Management's Outlook: The management believes that large loans will continue to be a strong driver of the Company's future growth. Michael R. Dunn, Chief Executive Officer said that moving forward, Regional's focus remains on growing its core small and large loan portfolios, while maintaining more normalized levels of delinquencies and continuing to focus on its expense structure. Overall, Mr. Dunn believes that the Company is solidly positioned for future consistent top and bottom line growth.

To find out how this influences our rating on Regional Management Corp. read the full report in its entirety here: http://www.aciassociation.com/?c=RM

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