Regional Management (NYSE:RM) Posts Earnings Results, Beats Expectations By $0.04 EPS

Key Points

• Regional Management beat quarterly expectations: EPS was $0.85 versus the $0.81 consensus, while revenue reached $168.01 million, above analysts’ $165.69 million estimate. Second-quarter revenue rose 7% year over year to $168 million.
• Management lowered its full-year outlook because of weaker direct-mail response rates, fintech competition and tighter underwriting. Portfolio growth guidance was reduced to 5%–7%, and EPS growth guidance to 10%–13%, while credit losses and delinquencies were somewhat higher than planned.
• The Column bank partnership and technology investments support longer-term growth: Column generated more than $65 million in originations, while Regional Management is expanding digital lending, fraud controls and AI-based underwriting. Analysts maintain a “Moderate Buy” consensus with a $45 average price target.

Regional Management (NYSE:RM - Get Free Report) posted its quarterly earnings results on Wednesday. The credit services provider reported $0.85 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.81 by $0.04, FiscalAI reports. The firm had revenue of $168.01 million for the quarter, compared to analysts' expectations of $165.69 million. Regional Management had a net margin of 7.40% and a return on equity of 13.16%.

Here are the key takeaways from Regional Management's conference call:

• Second-quarter earnings increased: Net income rose 14% year to date and diluted EPS rose 17% year over year in the first half, while second-quarter revenue increased 7% to $168 million. Operating efficiency also improved, with the expense ratio down 80 basis points to 12.4%.
• Growth fell short of expectations amid weaker direct-mail response rates, increased fintech competition and tighter underwriting in higher-risk segments. Management lowered full-year portfolio growth guidance to 5%–7% and EPS growth guidance to 10%–13%.
• Credit performance was somewhat weaker than planned, with a 12.2% net credit loss rate, up 30 basis points year over year, and 30-plus-day delinquencies of 7%. Management cited possible fraud or first-party abuse in certain segments, while also monitoring inflation and elevated fuel prices.
• The Column bank partnership is scaling faster than planned, with more than $65 million of originations and roughly 28% of total originations on a run-rate basis. Management expects the model to improve like-for-like pre-tax margins by at least 200 basis points and plans to transition nearly all states by the end of 2027.
• Regional Management is investing in longer-term growth through end-to-end digital lending, enhanced fraud controls and machine-learning underwriting, AI-enabled operations, new branch technology and expansion into Florida, its 20th state. Management expects credit losses to improve and quarterly earnings to strengthen in the second half of 2026.

Regional Management Price Performance

Shares of RM stock traded down $0.32 during midday trading on Wednesday, reaching $42.26. 54,556 shares of the company were exchanged, compared to its average volume of 71,846. The company's 50 day moving average price is $39.10 and its two-hundred day moving average price is $36.55. The company has a market cap of $389.19 million, a P/E ratio of 8.57 and a beta of 1.01. Regional Management has a 12 month low of $30.46 and a 12 month high of $46.00. The company has a debt-to-equity ratio of 4.30, a quick ratio of 59.88 and a current ratio of 59.88.

Wall Street Analysts Forecast Growth

A number of equities analysts have issued reports on RM shares. Citigroup reissued a "market outperform" rating on shares of Regional Management in a report on Wednesday, June 17th. Weiss Ratings raised Regional Management from a "hold (c)" rating to a "hold (c+)" rating in a report on Friday, June 26th. Citizens Jmp upgraded Regional Management from a "market perform" rating to an "outperform" rating and set a $45.00 price target on the stock in a research report on Thursday, May 21st. Finally, Wall Street Zen raised Regional Management from a "buy" rating to a "strong-buy" rating in a report on Sunday, July 12th. Two analysts have rated the stock with a Buy rating and two have given a Hold rating to the company's stock. According to MarketBeat, Regional Management currently has an average rating of "Moderate Buy" and an average price target of $45.00.

Insiders Place Their Bets

In related news, Director Sandra K. Johnson sold 1,000 shares of the firm's stock in a transaction dated Tuesday, May 26th. The stock was sold at an average price of $36.00, for a total transaction of $36,000.00. Following the completion of the transaction, the director owned 21,933 shares of the company's stock, valued at $789,588. This trade represents a 4.36% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which is available through the SEC website. Also, CAO Steven B. Barnette sold 3,274 shares of the firm's stock in a transaction that occurred on Friday, July 10th. The stock was sold at an average price of $43.30, for a total transaction of $141,764.20. Following the sale, the chief accounting officer owned 13,472 shares of the company's stock, valued at $583,337.60. The trade was a 19.55% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders sold 8,874 shares of company stock worth $350,208 over the last ninety days. Company insiders own 10.90% of the company's stock.

Institutional Trading of Regional Management

Institutional investors have recently made changes to their positions in the stock. Basswood Capital Management L.L.C. boosted its position in Regional Management by 0.4% during the second quarter. Basswood Capital Management L.L.C. now owns 1,024,310 shares of the credit services provider's stock valued at $29,920,000 after purchasing an additional 4,491 shares during the last quarter. Renaissance Technologies LLC increased its position in Regional Management by 15.8% in the 4th quarter. Renaissance Technologies LLC now owns 243,137 shares of the credit services provider's stock worth $9,422,000 after purchasing an additional 33,200 shares during the last quarter. Wellington Management Group LLP increased its position in Regional Management by 9.9% in the 4th quarter. Wellington Management Group LLP now owns 218,164 shares of the credit services provider's stock worth $8,454,000 after purchasing an additional 19,600 shares during the last quarter. Geode Capital Management LLC raised its stake in shares of Regional Management by 6.4% during the 2nd quarter. Geode Capital Management LLC now owns 211,734 shares of the credit services provider's stock worth $6,186,000 after purchasing an additional 12,740 shares in the last quarter. Finally, Goldman Sachs Group Inc. lifted its holdings in shares of Regional Management by 45.5% during the 1st quarter. Goldman Sachs Group Inc. now owns 194,374 shares of the credit services provider's stock valued at $5,853,000 after buying an additional 60,744 shares during the last quarter. 98.89% of the stock is currently owned by institutional investors and hedge funds.

Regional Management Company Profile

Regional Management Corp., headquartered in Wilmington, North Carolina, is a consumer finance company specializing in installment loan products for underbanked individuals. Since its founding in 1977, the company has developed a network of field-based branches alongside a digital platform to offer credit solutions in rural and small-town markets across the United States.

The company's core offerings include consumer installment loans for everyday purchases, auto refinancing and lease buyouts, as well as ancillary services such as insurance referrals.

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