Regional Management Corp. (RM) reported operating net income of 73 cents for the fourth quarter of 2013, exceeding the Zacks Consensus Estimate of 66 cents. Results also improved from 52 cents earned in the year-ago quarter.
Top line improvement and higher same-store sales led to the upside.
Including $1.5 million of pre-tax expenses associated with the director compensation and the secondary offering completed in Dec 2013, net income for fourth-quarter 2013 stood at 65 cents per share, up from 51 cents in the year-ago quarter.
Quarter in Details
Regional Management generated $48.5 million in total revenue in the reported quarter, up 31.6% year over year. The improvement stemmed from higher interest and fee income fuelled by increased finance receivables, insurance income and other income. However, results lagged the Zacks Consensus Estimate of $50 million.
Same-store revenues increased 17% year over year, while same-store finance receivables rose 11.5% from the year-ago quarter.
General and administrative expenses totaled $19.5 million, up 29.9% year over year. The increase was attributable to higher personnel costs related to the opening and acquisition of new branches, director compensation expenses and expenditure associated with the secondary offering completed in Dec 2013.
Total expenses of Regional Management rose nearly 30% over the prior-year quarter to $35 million.
Regional Management reported operating net income of $2.35 per share for full-year 2013, exceeding the Zacks Consensus Estimate of $2.31. Results also improved from $2.07 earned in 2012.
Including one-time expenses, net income for 2013 stood at $2.23 per share, up from $2.07 per share in 2012.
Regional Management generated $170.6 million in total revenue in 2013, up 25.7% year over year. The improvement came on the back of higher interest and fee income, insurance income and other income.
Regional Management’s network comprised 264 branches as of Dec 31, 2013. Since the beginning of 2014 through Mar 11, 2014, the company has opened 9 de novo branches and is expected to take the tally to 28 by the end of the second quarter 2014.
Regional Management ended 2013 with cash balance of $4.1 million, up from $3.3 million at 2012-end.
As of Dec 31, 2013, finance receivables totaled $544.7 million, up from $415.9 million as of Dec 31, 2012. The increase was attributable to branch additions over the year and a surge in same-store finance receivables.
Annualized net charge-offs as a percentage of average finance receivables for 2013 was 6.9%, up from 6.5% in 2012.
On Dec 10, 2013, Regional Management announced the closure of a secondary offering of about 2.35 million common shares. The shares were offered by Palladium Equity Partners III, L.P., Parallel 2005 Equity Fund, LP, and entities associated with Richard A. Godley and C. Glynn Quattlebaum, at $31.00 per share.
Senior revolving credit facility was $362.8 million as of Dec 31, 2013, up from $292.4 million as of Dec 31, 2012.
Performance of Other Consumer Loan Providers
Discover Financial Services (DFS) reported fourth-quarter 2013 earnings per share (EPS) of $1.23, which exceeded the Zacks Consensus Estimate of $1.17 per share.
SLM Corp. (SLM) reported fourth-quarter 2013 core earnings of 61 cents per share, lagging the Zacks Consensus Estimate of 70 cents.
Capital One Financial Corp.’s (COF) fourth-quarter earnings of $1.45 per share missed the Zacks Consensus Estimate by 5.8%.
Regional Management currently carries a Zacks Rank #3 (Hold).