Attached files
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| 8-K - 8-K - Regional Management Corp. | d690997d8k.htm |
Exhibit 99.1
Regional Management Corp. Announces Fourth Quarter 2013 Results
Greenville, South Carolina – March 11, 2014 – Regional Management Corp. (NYSE: RM), a diversified specialty consumer finance company, today announced results for the fourth quarter and full year ended December 31, 2013.
Fourth Quarter 2013 Highlights
| • | Total fourth quarter 2013 revenue was $48.5 million, a 31.6% increase from the prior-year period. |
| • | Same-store1 revenue growth for the fourth quarter of 2013 was 17.0%. Same-store finance receivables growth for the fourth quarter of 2013 was 11.5%. |
| • | Finance receivables as of December 31, 2013 were $544.7 million, an increase of 23.9% from the prior-year period. |
| • | GAAP net income for the fourth quarter of 2013 was $8.4 million, a 29.6% increase from net income of $6.5 million in the prior-year period. Diluted earnings per share were $0.65 based on a diluted share count of 13.0 million. Excluding $1.5 million of pre-tax expenses related to director compensation and the secondary offering completed in December 2013, non-GAAP net income for the fourth quarter of 2013 was $9.4 million and diluted earnings per share were $0.73. For a reconciliation of non-GAAP to GAAP measures, please review the disclosures and table included with this release. |
| • | Annualized net charge-offs as a percentage of average finance receivables for the fourth quarter of 2013 was 7.8%, an increase from 7.1% in the prior-year period (for the full year 2013, net charge-offs as a percentage of average finance receivables were 6.9%; an increase from 6.5% in the prior year). Provision for credit losses for the fourth quarter of 2013 was 24.0% of revenue, comparable with the prior-year period. |
| • | On December 10, 2013, Regional Management announced the closing of a secondary offering of 2,346,074 shares of its common stock, at a price of $31.00 per share, by: (i) Palladium Equity Partners III, L.P., an existing stockholder of Regional Management and an affiliate of Palladium Equity Partners; (ii) Parallel 2005 Equity Fund, LP, an existing stockholder of Regional Management and an affiliate of Parallel Investment Partners; (iii) entities affiliated with Richard A. Godley, a director, existing stockholder and founder of |
| 1 | Defined as stores open for at least 13 months. |
| Regional Management; and (iv) C. Glynn Quattlebaum, President and Chief Operating Officer of Regional Management and an existing stockholder and founder of Regional Management. Regional Management did not receive any proceeds from the offering. |
“2013 was a very solid year for Regional Management, as we continued to see significant top-line and same-store sales growth flow toward our bottom line,” said Thomas F. Fortin, Chief Executive Officer of Regional Management Corp. “In terms of the fourth quarter, we were pleased with our top-line performance, as well as the continued growth of our finance receivables, which was bolstered by ongoing success from our direct mail campaigns. Due in part to the successful campaigns and our small installment loan category comprising a larger share of our overall portfolio, we did see a tick-up in the fourth quarter of our annualized net charge-offs as a percentage of average finance receivables, and will continue to watch that figure closely in 2014. We are proud of the effort and dedication displayed by our entire team to make 2013 such a success for Regional Management, and we remain optimistic about the opportunities that are present for the future growth of Regional Management and the creation of long-term shareholder value. Finally, we certainly want to thank Palladium and Parallel, as without their dedication to and support of Regional Management over the past seven years, we would not be where we stand today.”
In addition, Regional Management will certify in its 2013 annual report on Form 10-K that its internal controls over financial reporting were effective as of December 31, 2013, thus being in compliance with requirements under the Sarbanes-Oxley Act of 2002. In connection with its internal control implementation work, Regional Management is making immaterial corrections to prior period financial statements when it files its 2013 Form 10-K. As a result, Regional Management’s financial statements for the three months and full year ended December 31, 2012 included in this press release have been revised from the amounts previously reported. Please refer to the table “Revisions to Financial Statements” included later in this release for more information.
Fourth Quarter 2013 Results
For the fourth quarter ended December 31, 2013, Regional Management reported total revenue of $48.5 million, a 31.6% increase from $36.9 million in the prior-year period. Interest and fee income for the fourth quarter of 2013 was $43.7 million, a 32.9% increase from $32.8 million in the prior-year period, primarily due to a 23.9% year-over-year increase in finance receivables. Insurance and other income for the fourth quarter of 2013 was $4.9 million, a 20.6% increase from the prior-year period. Same-store revenue growth for the fourth quarter of 2013 was 17.0%.
Finance receivables outstanding at December 31, 2013 were $544.7 million, a 23.9% increase from $439.5 million in the prior-year period. Finance receivables increased due to the addition of 41 de novo branches and 2 acquired branches since December 31, 2012, as well as the increase in same-store finance receivables, which grew 11.5% in the fourth quarter.
Provision for credit losses in the fourth quarter of 2013 was $11.6 million versus $8.8 million in the prior-year period, primarily due to the increase in loan volume. Annualized net charge-offs as a percentage of average finance receivables for the fourth quarter of 2013 was 7.8%, an increase from 7.1% in the prior-year period.
General and administrative expenses for the fourth quarter of 2013 were $19.5 million, an increase of 29.9% from $15.0 million in the prior-year period, primarily due to increased personnel costs from opening and acquiring an additional 43 branches since December 31, 2012 and $1.5 million of one-time expenses, consisting of $1.2 million of director compensation expense and $0.3 million related to the secondary offering completed in December 2013. Regional Management’s efficiency ratio—the percentage of general and administrative expenses compared to total revenue—in the fourth quarter of 2013 was 40.1%, an improvement of 60 basis points from 40.7% in the prior-year period; excluding the one-time expenses, Regional Management’s efficiency ratio for the fourth quarter of 2013 would have been 37.0%.
GAAP net income for the fourth quarter of 2013 was $8.4 million, a 29.6% increase compared to net income of $6.5 million in the prior-year period. Diluted earnings per share for the fourth quarter of 2013 were $0.65, an increase from $0.51 in the prior-year period. Excluding expenses related to director compensation and the secondary offering, non-GAAP net income for the fourth quarter of 2013 was $9.4 million and diluted earnings per share were $0.73.
Full Year 2013 Results
For the full year ended December 31, 2013, Regional Management reported total revenue of $170.6 million, a 25.7% increase from $135.7 million in the prior year. Interest and fee income for the full year ended December 31, 2013 was $152.3 million, a 28.0% increase from $119.0 million in the prior year. Insurance and other income for the full year ended December 31, 2013 was $18.3 million, a 9.7% increase from the prior year.
Provision for loan losses in the full year ended December 31, 2013 was $39.2 million versus $27.8 million in the prior year, primarily due to the increase in loan volume. Net charge-offs as a percentage of average finance receivables for the full year ended December 31, 2013 was 6.9%, an increase from 6.5% in the prior year.
General and administrative expenses for the full year ended December 31, 2013 were $71.0 million, an increase of 27.9% from $55.6 million in the prior-year period, primarily due to increased personnel costs from opening and acquiring an additional 43 branches since December 31, 2012. Regional Management’s efficiency ratio in the full year ended December 31, 2013 was 41.6%, an increase of 70 basis points from 40.9% in the prior year. Excluding one-time expenses, Regional Management’s efficiency ratio for the full year ended December 31, 2013 would have been 40.5%.
GAAP net income for the full year ended December 31, 2013 was $28.8 million, a 16.3% increase compared to GAAP net income of $24.8 million in the prior year, and diluted earnings per share for the full year ended December 31, 2013 were $2.23 compared to $2.07 in the prior year. Excluding one-time expenses in 2013 and one-time expenses related to Regional Management’s IPO in 2012, non-GAAP net income for the full year ended December 31, 2013 was $30.3 million and diluted earnings per share were $2.35, versus pro forma net income of $26.4 million and diluted earnings per share of $2.07 (based on a diluted share count of 12.8 million) for the prior year.
2014 De Novo Update
As of December 31, 2013, Regional Management’s branch network consisted of 264 locations. Through today, Regional Management has opened 9 de novo branches in 2014 and plans to have 28 de novo branches open by the end of the second quarter.
Liquidity and Capital Resources
As of December 31, 2013, Regional Management had finance receivables of $544.7 million and outstanding debt of $362.8 million on its $500.0 million senior revolving credit facility and on its $1.5 million cash management line of credit.
Conference Call Information
Regional Management Corp. will host a conference call and webcast today at 5:00 PM Eastern. Both the call and webcast are open to the general public.
The dial-in number for the conference call is (866) 953-6858, passcode 40160670 – 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 of the call will be available two hours following the end of the call through midnight Eastern on Tuesday, March 18 at www.RegionalManagement.com and by telephone at (888) 286-8010, passcode 72648176.
Forward-Looking Statements
This press release may contain various “forward-looking statements” within the meaning of Section 27A of the Securities Exchange Act of 1934, as amended, which represent Regional Management Corp.’s expectations or beliefs concerning future events. 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 and new branches; 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). Such factors 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, furniture and appliance retailers and its consumer website. For more information, please visit http://www.RegionalManagement.com.
Contacts:
Investor Relations
Garrett Edson, (203) 682-8331
Media Relations
Kim Paone, (646) 277-1216
Regional Management Corp. and Subsidiaries
Consolidated Statements of Income
($ in thousands, except per share amounts)
(Unaudited)
| Three Months Ended December 31, |
Twelve Months Ended December 31, |
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| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| Revenue |
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| Interest and fee income |
$ | 43,668 | $ | 32,849 | $ | 152,343 | $ | 119,025 | ||||||||
| Insurance income, net |
2,895 | 2,606 | 11,470 | 10,681 | ||||||||||||
| Other income |
1,979 | 1,435 | 6,816 | 5,991 | ||||||||||||
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| Total revenue |
48,542 | 36,890 | 170,629 | 135,697 | ||||||||||||
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| Expenses |
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| Provision for credit losses |
11,638 | 8,846 | 39,192 | 27,765 | ||||||||||||
| General and administrative expenses |
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| Personnel |
10,082 | 8,631 | 39,868 | 33,492 | ||||||||||||
| Occupancy |
3,261 | 2,374 | 11,640 | 8,655 | ||||||||||||
| Marketing |
1,144 | 910 | 3,980 | 2,767 | ||||||||||||
| Other |
4,993 | 3,084 | 15,551 | 10,644 | ||||||||||||
| Consulting and advisory fees |
— | — | — | 1,451 | ||||||||||||
| Interest expense |
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| Senior revolving credit facility and other debt |
3,909 | 3,024 | 14,144 | 10,580 | ||||||||||||
| Mezzanine debt-related parties |
— | — | — | 1,030 | ||||||||||||
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| Total interest expense |
3,909 | 3,024 | 14,144 | 11,610 | ||||||||||||
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| Total expenses |
35,027 | 26,869 | 124,375 | 96,384 | ||||||||||||
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| Income before income taxes |
13,515 | 10,021 | 46,254 | 39,313 | ||||||||||||
| Income taxes |
5,130 | 3,552 | 17,460 | 14,561 | ||||||||||||
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| Net income |
$ | 8,385 | $ | 6,469 | $ | 28,794 | $ | 24,752 | ||||||||
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| Net income per common share: |
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| Basic |
$ | 0.66 | $ | 0.52 | $ | 2.29 | $ | 2.12 | ||||||||
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| Diluted |
$ | 0.65 | $ | 0.51 | $ | 2.23 | $ | 2.07 | ||||||||
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| Weighted average common shares outstanding: |
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| Basic |
12,614,503 | 12,486,727 | 12,572,298 | 11,694,924 | ||||||||||||
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| Diluted |
12,984,270 | 12,779,515 | 12,893,693 | 11,980,748 | ||||||||||||
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Regional Management Corp. and Subsidiaries
Consolidated Balance Sheets
($ in thousands, except per share amounts)
(Unaudited)
| December 31, 2013 | December 31, 2012 | |||||||
| Assets |
||||||||
| Cash |
$ | 4,121 | $ | 3,298 | ||||
| Gross finance receivables |
658,176 | 531,850 | ||||||
| Less unearned finance charges, insurance premiums, and commissions |
(113,492 | ) | (92,376 | ) | ||||
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| Finance receivables |
544,684 | 439,474 | ||||||
| Allowance for credit losses |
(30,089 | ) | (23,616 | ) | ||||
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| Net finance receivables |
514,595 | 415,858 | ||||||
| Property and equipment, net of accumulated depreciation |
7,100 | 5,111 | ||||||
| Repossessed assets at net realizable value |
548 | 711 | ||||||
| Goodwill |
716 | 363 | ||||||
| Intangible assets, net |
1,386 | 1,815 | ||||||
| Other assets |
5,422 | 7,361 | ||||||
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| Total assets |
$ | 533,888 | $ | 434,517 | ||||
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| Liabilities and Stockholders’ Equity |
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| Liabilities: |
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| Deferred tax liability, net |
$ | 2,653 | $ | 5,947 | ||||
| Accounts payable and accrued expenses |
7,312 | 6,987 | ||||||
| Senior revolving credit facility |
362,750 | 292,379 | ||||||
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| Total liabilities |
372,715 | 305,313 | ||||||
| Commitments and Contingencies |
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| Stockholders’ equity: |
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| Preferred stock, $0.10 par value, 100,000,000 shares authorized, no shares issued and outstanding at December 31, 2013 and December 31, 2012 |
— | — | ||||||
| Common stock, $0.10 par value, 1,000,000,000 shares authorized, 12,652,197 shares issued and outstanding at December 31, 2013; 1,000,000,000 shares authorized, 12,486,727 shares issued and outstanding at December 31, 2012 |
1,265 | 1,249 | ||||||
| Additional paid-in-capital |
83,317 | 80,158 | ||||||
| Retained earnings |
76,591 | 47,797 | ||||||
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| Total stockholders’ equity |
161,173 | 129,204 | ||||||
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| Total liabilities and stockholders’ equity |
$ | 533,888 | $ | 434,517 | ||||
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Regional Management Corp. and Subsidiaries
Selected Financial Data
(Unaudited)
($ in thousands)
| Components of Increase in Interest and Fee Income Three Months Ended December 31, 2013 Compared to Three Months Ended December 31, 2012 Increase (Decrease) |
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| Volume | Rate | Net | ||||||||||
| Small installment loans |
$ | 11,265 | $ | (67 | ) | $ | 11,198 | |||||
| Large installment loans |
(646 | ) | (39 | ) | (685 | ) | ||||||
| Automobile purchase loans |
873 | (531 | ) | 342 | ||||||||
| Retail purchase loans |
139 | (175 | ) | (36 | ) | |||||||
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| Total increase in interest and fee income |
$ | 11,631 | $ | (812 | ) | $ | 10,819 | |||||
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| Three Months Ended December 31, | ||||||||
| 2013 | 2012 | |||||||
| Total annualized yield |
36.9 | % | 35.5 | % | ||||
| Average net finance receivables |
$ | 526,252 | $ | 415,187 | ||||
| Loans Originated (1) Three Months Ended December 31, |
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| 2013 | 2012 | |||||||
| Small installment loans |
$ | 215,255 | $ | 146,577 | ||||
| Large installment loans |
17,222 | 22,554 | ||||||
| Automobile purchase loans |
26,064 | 32,340 | ||||||
| Retail purchase loans |
8,721 | 9,919 | ||||||
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| Total finance receivables |
$ | 267,262 | $ | 211,390 | ||||
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| (1) | Represents gross balance of loan originations, including unearned finance charges |
| Three Months Ended December 31, | ||||||||||||||||
| 2013 | 2012 | |||||||||||||||
| Amount | Percentage of Average Finance Receivables (Annualized) |
Amount | Percentage of Average Finance Receivables (Annualized) |
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| Net charge-offs as a percentage of average finance receivables |
$ | 10,231 | 7.8 | % | $ | 7,363 | 7.1 | % | ||||||||
| Amount | Percentage of Total Revenue |
Amount | Percentage of Total Revenue |
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| Provision for credit losses |
$ | 11,638 | 24.0 | % | $ | 8,846 | 24.0 | % | ||||||||
| General and administrative expenses |
$ | 19,480 | 40.1 | % | $ | 14,999 | 40.7 | % | ||||||||
| Amount | Growth Rate | Amount | Growth Rate | |||||||||||||
| Same store finance receivables at period-end/growth rate |
$ | 478,969 | 11.5 | % | $ | 380,229 | 27.1 | % | ||||||||
| Same store revenue growth rate |
17.0 | % | 16.9 | % | ||||||||||||
| Number of branches in calculation |
213 | 167 | ||||||||||||||
| Components of Increase in Interest and Fee Income Twelve Months Ended December 31, 2013 Compared to Twelve Months Ended December 31, 2012 Increase (Decrease) |
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| Volume | Rate | Net | ||||||||||
| Small installment loans |
$ | 37,943 | $ | (5,875 | ) | $ | 32,068 | |||||
| Large installment loans |
(2,305 | ) | (1,431 | ) | (3,736 | ) | ||||||
| Automobile purchase loans |
5,712 | (2,164 | ) | 3,548 | ||||||||
| Retail purchase loans |
1,896 | (458 | ) | 1,438 | ||||||||
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| Total increase in interest and fee income |
$ | 43,246 | $ | (9,928 | ) | $ | 33,318 | |||||
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| Loans Originated (1) Twelve Months Ended December 31, |
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| 2013 | 2012 | |||||||
| Small installment loans |
$ | 683,603 | $ | 438,153 | ||||
| Large installment loans |
62,499 | 77,416 | ||||||
| Automobile purchase loans |
125,958 | 133,601 | ||||||
| Retail purchase loans |
34,311 | 36,611 | ||||||
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| Total finance receivables |
$ | 906,371 | $ | 685,781 | ||||
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| (1) | Represents gross balance of loan originations, including unearned finance charges |
| Twelve Months Ended December 31, | ||||||||||||||||
| 2013 | 2012 | |||||||||||||||
| Amount | Percentage of Average Finance Receivables |
Amount | Percentage of Average Finance Receivables |
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| Net charge-offs as a percentage of average finance receivables |
$ | 32,718 | 6.9 | % | $ | 23,449 | 6.5 | % | ||||||||
| Amount | Percentage of Total Revenue |
Amount | Percentage of Total Revenue |
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| Provision for credit losses |
$ | 39,192 | 23.0 | % | $ | 27,765 | 20.5 | % | ||||||||
| General and administrative expenses |
$ | 71,039 | 41.6 | % | $ | 55,558 | 40.9 | % | ||||||||
| Finance Receivables As of December 31, |
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| 2013 | 2012 | |||||||
| Small installment loans |
$ | 288,979 | $ | 188,562 | ||||
| Large installment loans |
43,311 | 52,001 | ||||||
| Automobile purchase loans |
181,126 | 168,604 | ||||||
| Retail purchase loans |
31,268 | 30,307 | ||||||
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| Total finance receivables |
$ | 544,684 | $ | 439,474 | ||||
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| Number of branches at period end |
264 | 221 | ||||||
| Average finance receivables per branch |
$ | 2,063 | $ | 1,989 | ||||
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| As of December 31, | ||||||||||||||||
| 2013 | 2012 | |||||||||||||||
| Amount | Percentage of Total Finance Receivables |
Amount | Percentage of Total Finance Receivables |
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| Allowance for credit losses |
$ | 30,089 | 5.5 | % | $ | 23,616 | 5.4 | % | ||||||||
| Over 30 days contractually delinquent |
$ | 43,810 | 8.0 | % | $ | 29,535 | 6.7 | % | ||||||||
| Over 90 days contractually delinquent |
$ | 17,455 | 3.2 | % | $ | 11,099 | 2.5 | % | ||||||||
| Over 180 days contractually delinquent |
$ | 2,096 | 0.4 | % | $ | 1,996 | 0.5 | % | ||||||||
Regional Management Corp. and Subsidiaries
Unaudited Non-GAAP Reconciliation of Selected Financial Data
For the Three and Twelve Months Ended December 31, 2013
($ in thousands, except per share amounts)
| Three Months Ended December 31, 2013 | ||||||||||||
| Actual | Adjustments | Non-GAAP | ||||||||||
| General and administrative expenses |
$ | 19,480 | $ | (1,503 | )(1) | $ | 17,977 | |||||
| Income taxes |
$ | 5,130 | $ | 450 | (2) | $ | 5,580 | |||||
| Net income |
$ | 8,385 | $ | 1,053 | $ | 9,438 | ||||||
| Diluted net income per common share |
$ | 0.65 | $ | 0.73 | ||||||||
| Diluted weighted average common shares outstanding |
12,984,270 | 12,984,270 | ||||||||||
| Efficiency ratio |
40.1 | % | 37.0 | % | ||||||||
| Twelve Months Ended December 31, 2013 | ||||||||||||
| Actual | Adjustments | Non-GAAP | ||||||||||
| General and administrative expenses |
$ | 71,039 | $ | (1,959 | )(3) | $ | 69,080 | |||||
| Income taxes |
$ | 17,460 | $ | 450 | (2) | $ | 17,910 | |||||
| Net income |
$ | 28,794 | $ | 1,509 | $ | 30,303 | ||||||
| Diluted net income per common share |
$ | 2.23 | $ | 2.35 | ||||||||
| Diluted weighted average common shares outstanding |
12,893,693 | 12,893,693 | ||||||||||
| Efficiency ratio |
41.6 | % | 40.5 | % | ||||||||
| (1) | Expenses related to the three months ended December 31, 2013: |
| Director compensation |
$ | 1,210 | ||
| Secondary offering |
$ | 293 |
| (2) | Tax effect of the director compensation expense (secondary offering expense is non-deductible for tax purposes) |
| (3) | Expenses related to the twelve months ended December 31, 2013: |
| Director compensation |
$ | 1,210 | ||
| Secondary offering |
$ | 749 |
Regional Management Corp. and Subsidiaries
Revision to Financial Statements
($ in thousands, except per share amounts)
(Unaudited)
As stated earlier in this release, the financial statements for the 2012 periods included in this release have been revised from the amounts previously reported to correct immaterial errors relating to interest income, insurance premiums, compensated absences, state franchise taxes, and income taxes. Following a materiality assessment in accordance with the Securities and Exchange Commission Staff Accounting Bulletin No. 99, Materiality, and Staff Accounting Bulletin No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, the Company concluded that the prior period errors were immaterial to the previously issued financial statements and those financial statements can continue to be relied upon. The revisions and their effect on resulting line items are detailed as follows:
| Consolidated Statements of Income | ||||||||||||||||||||||||
| Three Months Ended December 31, 2012 |
Twelve Months Ended December 31, 2012 |
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| As Reported (1) | Revised | Change | As Reported (1) | Revised | Change | |||||||||||||||||||
| Interest and fee income |
$ | 32,902 | $ | 32,849 | $ | (53 | ) | $ | 119,235 | $ | 119,025 | $ | (210 | ) | ||||||||||
| Insurance income, net |
2,663 | 2,606 | (57 | ) | 10,820 | 10,681 | (139 | ) | ||||||||||||||||
| Total revenue |
37,000 | 36,890 | (110 | ) | 136,046 | 135,697 | (349 | ) | ||||||||||||||||
| Personnel |
8,622 | 8,631 | 9 | 33,453 | 33,492 | 39 | ||||||||||||||||||
| Other |
3,027 | 3,084 | 57 | 10,413 | 10,644 | 231 | ||||||||||||||||||
| Total expenses |
26,803 | 26,869 | 66 | 96,114 | 96,384 | 270 | ||||||||||||||||||
| Income before income taxes |
10,197 | 10,021 | (176 | ) | 39,932 | 39,313 | (619 | ) | ||||||||||||||||
| Income taxes |
3,560 | 3,552 | (8 | ) | 14,565 | 14,561 | (4 | ) | ||||||||||||||||
| Net income |
$ | 6,637 | $ | 6,469 | $ | (168 | ) | $ | 25,367 | $ | 24,752 | $ | (615 | ) | ||||||||||
| Net income per common share: |
||||||||||||||||||||||||
| Basic |
$ | 0.53 | $ | 0.52 | $ | (0.01 | ) | $ | 2.17 | $ | 2.12 | $ | (0.05 | ) | ||||||||||
| Diluted |
$ | 0.52 | $ | 0.51 | $ | (0.01 | ) | $ | 2.12 | $ | 2.07 | $ | (0.05 | ) | ||||||||||
| Consolidated Balance Sheet | ||||||||||||
| December 31, 2012 | ||||||||||||
| As Reported (1) | Revised | Change | ||||||||||
| Less unearned finance charges, insurance premiums, and commissions |
$ | (92,024 | ) | $ | (92,376 | ) | $ | (352 | ) | |||
| Finance receivables |
439,826 | 439,474 | (352 | ) | ||||||||
| Net finance receivables |
416,210 | 415,858 | (352 | ) | ||||||||
| Other assets |
7,483 | 7,361 | (122 | ) | ||||||||
| Total assets |
434,991 | 434,517 | (474 | ) | ||||||||
| Accounts payable and accrued expenses |
6,096 | 6,987 | 891 | |||||||||
| Total liabilities |
304,422 | 305,313 | 891 | |||||||||
| Retained earnings |
49,162 | 47,797 | (1,365 | ) | ||||||||
| Total stockholders’ equity |
130,569 | 129,204 | (1,365 | ) | ||||||||
| Total liabilities and stockholders’ equity |
$ | 434,991 | $ | 434,517 | $ | (474 | ) | |||||
| (1) | Certain prior period amounts have been reclassified to conform to the current presentation. Such reclassifications had no impact on previously reported net income or stockholders’ equity. |
Regional Management Corp. and Subsidiaries
Unaudited Pro Forma Consolidated Statements of Income
For the Twelve Months Ended December 31, 2012
($ in thousands, except per share amounts)
| Actual | Pro Forma Adjustments |
Pro Forma | ||||||||||
| Revenue |
||||||||||||
| Interest and fee income |
$ | 119,025 | $ | — | $ | 119,025 | ||||||
| Insurance income, net |
10,681 | — | 10,681 | |||||||||
| Other income |
5,991 | — | 5,991 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total revenue |
135,697 | — | 135,697 | |||||||||
|
|
|
|
|
|
|
|||||||
| Expenses |
||||||||||||
| Provision for credit losses |
27,765 | — | 27,765 | |||||||||
| General and administrative expenses |
||||||||||||
| Personnel |
33,492 | 140 | (1) | 33,632 | ||||||||
| Occupancy |
8,655 | — | 8,655 | |||||||||
| Marketing |
2,767 | — | 2,767 | |||||||||
| Other |
10,644 | — | 10,644 | |||||||||
| Consulting and advisory fees |
1,451 | (1,451 | )(2) | — | ||||||||
| Interest expense |
||||||||||||
| Senior revolving credit facility and other debt |
10,580 | (247 | )(3) | 10,333 | ||||||||
| Mezzanine debt-related parties |
1,030 | (1,030 | )(4) | — | ||||||||
|
|
|
|
|
|
|
|||||||
| Total interest expense |
11,610 | (1,277 | ) | 10,333 | ||||||||
|
|
|
|
|
|
|
|||||||
| Total expenses |
96,384 | (2,588 | ) | 93,796 | ||||||||
|
|
|
|
|
|
|
|||||||
| Income before income taxes |
39,313 | 2,588 | 41,901 | |||||||||
| Income taxes |
14,561 | 942 | (5) | 15,503 | ||||||||
|
|
|
|
|
|
|
|||||||
| Net income |
$ | 24,752 | $ | 1,646 | $ | 26,398 | ||||||
|
|
|
|
|
|
|
|||||||
| Net income per common share: |
||||||||||||
| Basic |
$ | 2.12 | $ | 2.11 | ||||||||
|
|
|
|
|
|||||||||
| Diluted |
$ | 2.07 | $ | 2.07 | ||||||||
|
|
|
|
|
|||||||||
| Weighted average shares outstanding: |
||||||||||||
| Basic |
11,694,924 | 12,486,727 | ||||||||||
|
|
|
|
|
|||||||||
| Diluted |
11,980,748 | 12,772,551 | ||||||||||
|
|
|
|
|
|||||||||
| (1) | Represents additional compensation expense associated with the grant of options upon consummation of the initial public offering. |
| (2) | Represents a termination fee of $1,125, combined with the $326 we paid our former majority stockholders and sponsors for the three months ended March 31, 2012. The agreements with the former majority stockholders and sponsors terminated with the completion of the initial public offering. |
| (3) | Reflects reduction in interest expense as a result of payment of $13,229 in aggregate principal amount of our senior revolving credit facility, offset in part by an unused line fee of 0.50%. Also reflects a reduction in the interest rate under our senior revolving credit facility from one month LIBOR (with a LIBOR floor of 1.00%) plus 3.25% to one month LIBOR (with a LIBOR floor of 1.00%) plus 3.00%. |
| (4) | Reflects reduction in interest expense as a result of the repayment of the $25,814 in aggregate principal amount of our mezzanine debt, which accrued interest at a rate of 15.25% per annum. |
| (5) | Reflects an increase in income taxes as a result of the increase in income before taxes. |