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Shares of Regional Management Corp. (RM - Free Report) have lost 2% since it reported fourth-quarter 2024 results on Feb. 5. Despite an earnings beat, the quarterly results were hurt by elevated provisions for credit losses and higher personnel expenses. Nevertheless, the downside was partly offset by strong loan origination growth and improved net insurance income.
See the Zacks Earnings Calendar to stay ahead of market-making news.
It reported fourth-quarter 2024 adjusted earnings per share (EPS) of 98 cents, which surpassed the Zacks Consensus Estimate by 11.4%. A loss of 80 cents per share was incurred in the prior-year quarter.
RM's total revenues advanced 9.3% year over year to $154.8 million. The top line beat the consensus mark by 1.8%.
Regional Management Corp. Price, Consensus and EPS Surprise
Interest and fee income of $138.2 million improved 9.6% year over year and came higher than the Zacks Consensus Estimate of $136.6 million. Net insurance income rose 7.3% year over year to $11.8 million, which beat the consensus mark of $10.8 million. Other income totaled $4.8 million, up 6.9% year over year and higher than the consensus mark of $4.7 million.
Provision for credit losses escalated 16.3% year over year to $57.6 million.
Total general and administrative were $64.6 million, which inched up 0.2% year over year due to higher personnel expenses. The efficiency ratio, which depicts the general and administrative expenses as a percentage of revenues, contracted 390 basis points year over year to 41.8% in the fourth quarter. Interest expenses of $19.8 million fell 13.1% year over year.
Regional Management recorded a net income of $9.9 million against the prior-year quarter’s loss of $7.6 million.
Net finance receivables were $1.9 billion at the fourth-quarter end, which grew 6.8% year over year. Small loans advanced 12.4% year over year to $554.7 million, while large loans of $1.3 billion rose 4.9% year over year. It had 344 branches at the quarter-end, with net finance receivables per branch at $5.5 million, which grew 7.5% year over year.
The company recorded total loan originations of $475.9 million during the December quarter, which improved 16.7% year over year.
RM’s Financial Position (as of Dec. 31, 2024)
Regional Management exited the fourth quarter with a cash balance of $4 million, which tumbled 12.4% year over year.
Total assets of $1.9 billion increased 6.4% year over year.
Net debt amounted to $1.5 billion, up 5.5% year over year. Total liabilities of $1.6 billion at the fourth-quarter end grew 5.4% year over year.
Total shareholders’ equity advanced 10.8% year over year to $357.1 million.
Regional Management’s Dividend Update
For the first quarter of 2025, Regional Management announced a dividend of 30 cents per share, which will be paid on March 13, 2025, to shareholders of record as of Feb. 20.
RM’s Full-Year Results
In 2024, total revenues increased 6.7% to $588.5 million. Adjusted EPS of $4.14 more than doubled year over year.
Regional Management’s Outlook
Management targets to achieve at least 10% portfolio growth and deliver a meaningful increase in net income in 2025.
The company expects general and administrative expenses for the first quarter of 2025 to be within the range of $65-$65.5 million. Interest expenses are estimated within $20-$20.5 million in the first quarter.
Total revenue yield is likely to decrease 90 basis points sequentially in the first quarter, while net credit losses are likely to be around $60 million. It anticipates the effective tax rate to be around 24.5% for the first quarter.
Here are some other Finance sector players that have reported fourth-quarter results so far. The bottom-line results of Virtu Financial, Inc. (VIRT - Free Report) , Euronet Worldwide, Inc. (EEFT - Free Report) and American Express Company (AXP - Free Report) beat the respective Zacks Consensus Estimate.
Virtu Financial reported fourth-quarter 2024 adjusted EPS of $1.14, which outpaced the Zacks Consensus Estimate by 32.6%. The bottom line recorded a more than four-fold increase year over year. Adjusted net trading income improved more than 75% year over year to $457.7 million. It beat the consensus estimate by 14.7%. Revenues from commissions, net and technology services amounted to $140.5 million, rising 22.8% year over year. Interest and dividend income of $123.8 million fell from $154.7 million a year ago.
Adjusted EBITDA jumped to $283.5 million from $99 million a year ago. Adjusted EBITDA margin of 57.5% improved 2,400 bps year over year. In the Market Making segment, adjusted net trading income was $347.9 million in the fourth quarter, up 107.7% year over year. The segment’s revenues rose 67.5% year over year to $706.5 million. The Execution Services unit recorded an adjusted net trading income of $109.8 million, which grew 17.6% year over year. Total revenues of $136.7 million grew 28.3% year over year.
Euronet reported fourth-quarter 2024 adjusted EPS of $2.08, which outpaced the Zacks Consensus Estimate by 3%. The bottom line rose 10% year over year. Total revenues improved 9% year over year and 10% on a constant-currency basis to $1.1 billion. The top line beat the consensus mark by 0.7%. EEFT’s net income was $45.3 million, which dropped 34.8% year over year. Adjusted EBITDA improved 12% year over year and 13% on a constant-currency basis to $165.8 million.
The EFT Processing segment’s revenues rose 12% year over year and 13% on a constant-currency basis to $265.6 million in the fourth quarter. Adjusted EBITDA was $61.7 million, which advanced 18% year over year and 19% on a constant-currency basis. The epay segment recorded revenues of $342.2 million, which grew 8% year over year and 10% on a constant-currency basis. Adjusted EBITDA improved 10% year over year and 12% on a constant-currency basis to $49.9 million. The Money Transfer segment posted revenues of $441.9 million, which rose 9% year over year and on a constant-currency basis.
American Express reported fourth-quarter 2024 EPS of $3.04, which beat the Zacks Consensus Estimate by a whisker. The bottom line climbed 16% year over year. Total revenues, net of interest expense, amounted to $17.2 billion, which also beat the consensus estimate by a whisker. The top line improved 8.7% year over year. Network volumes of $464 billion rose 7% year over year. Total interest income of $6.1 billion increased 9% year over year. Provision for credit losses declined 10% year over year to $1.3 billion.
The U.S. Consumer Services segment’s pre-tax income of $1.5 billion improved 5% year over year. Total revenues, net of interest expense, climbed 12% year over year to $8.3 billion. The Commercial Services segment recorded a pre-tax income of $814 million, which rose 22% year over year. Total revenues, net of interest expense, amounted to $4.1 billion, which grew 8% year over year. The International Card Services segment reported a pre-tax income of $34 million, which plunged 76% year over year.
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Regional Management's Q4 Earnings Beat Estimates, Stock Dips 2%
Shares of Regional Management Corp. (RM - Free Report) have lost 2% since it reported fourth-quarter 2024 results on Feb. 5. Despite an earnings beat, the quarterly results were hurt by elevated provisions for credit losses and higher personnel expenses. Nevertheless, the downside was partly offset by strong loan origination growth and improved net insurance income.
See the Zacks Earnings Calendar to stay ahead of market-making news.
It reported fourth-quarter 2024 adjusted earnings per share (EPS) of 98 cents, which surpassed the Zacks Consensus Estimate by 11.4%. A loss of 80 cents per share was incurred in the prior-year quarter.
RM's total revenues advanced 9.3% year over year to $154.8 million. The top line beat the consensus mark by 1.8%.
Regional Management Corp. Price, Consensus and EPS Surprise
Regional Management Corp. price-consensus-eps-surprise-chart | Regional Management Corp. Quote
Regional Management’s Operational Update
Interest and fee income of $138.2 million improved 9.6% year over year and came higher than the Zacks Consensus Estimate of $136.6 million. Net insurance income rose 7.3% year over year to $11.8 million, which beat the consensus mark of $10.8 million. Other income totaled $4.8 million, up 6.9% year over year and higher than the consensus mark of $4.7 million.
Provision for credit losses escalated 16.3% year over year to $57.6 million.
Total general and administrative were $64.6 million, which inched up 0.2% year over year due to higher personnel expenses. The efficiency ratio, which depicts the general and administrative expenses as a percentage of revenues, contracted 390 basis points year over year to 41.8% in the fourth quarter. Interest expenses of $19.8 million fell 13.1% year over year.
Regional Management recorded a net income of $9.9 million against the prior-year quarter’s loss of $7.6 million.
Net finance receivables were $1.9 billion at the fourth-quarter end, which grew 6.8% year over year. Small loans advanced 12.4% year over year to $554.7 million, while large loans of $1.3 billion rose 4.9% year over year. It had 344 branches at the quarter-end, with net finance receivables per branch at $5.5 million, which grew 7.5% year over year.
The company recorded total loan originations of $475.9 million during the December quarter, which improved 16.7% year over year.
RM’s Financial Position (as of Dec. 31, 2024)
Regional Management exited the fourth quarter with a cash balance of $4 million, which tumbled 12.4% year over year.
Total assets of $1.9 billion increased 6.4% year over year.
Net debt amounted to $1.5 billion, up 5.5% year over year. Total liabilities of $1.6 billion at the fourth-quarter end grew 5.4% year over year.
Total shareholders’ equity advanced 10.8% year over year to $357.1 million.
Regional Management’s Dividend Update
For the first quarter of 2025, Regional Management announced a dividend of 30 cents per share, which will be paid on March 13, 2025, to shareholders of record as of Feb. 20.
RM’s Full-Year Results
In 2024, total revenues increased 6.7% to $588.5 million. Adjusted EPS of $4.14 more than doubled year over year.
Regional Management’s Outlook
Management targets to achieve at least 10% portfolio growth and deliver a meaningful increase in net income in 2025.
The company expects general and administrative expenses for the first quarter of 2025 to be within the range of $65-$65.5 million. Interest expenses are estimated within $20-$20.5 million in the first quarter.
Total revenue yield is likely to decrease 90 basis points sequentially in the first quarter, while net credit losses are likely to be around $60 million. It anticipates the effective tax rate to be around 24.5% for the first quarter.
RM’s Zacks Rank
Regional Management currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Finance Sector Players
Here are some other Finance sector players that have reported fourth-quarter results so far. The bottom-line results of Virtu Financial, Inc. (VIRT - Free Report) , Euronet Worldwide, Inc. (EEFT - Free Report) and American Express Company (AXP - Free Report) beat the respective Zacks Consensus Estimate.
Virtu Financial reported fourth-quarter 2024 adjusted EPS of $1.14, which outpaced the Zacks Consensus Estimate by 32.6%. The bottom line recorded a more than four-fold increase year over year. Adjusted net trading income improved more than 75% year over year to $457.7 million. It beat the consensus estimate by 14.7%. Revenues from commissions, net and technology services amounted to $140.5 million, rising 22.8% year over year. Interest and dividend income of $123.8 million fell from $154.7 million a year ago.
Adjusted EBITDA jumped to $283.5 million from $99 million a year ago. Adjusted EBITDA margin of 57.5% improved 2,400 bps year over year. In the Market Making segment, adjusted net trading income was $347.9 million in the fourth quarter, up 107.7% year over year. The segment’s revenues rose 67.5% year over year to $706.5 million. The Execution Services unit recorded an adjusted net trading income of $109.8 million, which grew 17.6% year over year. Total revenues of $136.7 million grew 28.3% year over year.
Euronet reported fourth-quarter 2024 adjusted EPS of $2.08, which outpaced the Zacks Consensus Estimate by 3%. The bottom line rose 10% year over year. Total revenues improved 9% year over year and 10% on a constant-currency basis to $1.1 billion. The top line beat the consensus mark by 0.7%. EEFT’s net income was $45.3 million, which dropped 34.8% year over year. Adjusted EBITDA improved 12% year over year and 13% on a constant-currency basis to $165.8 million.
The EFT Processing segment’s revenues rose 12% year over year and 13% on a constant-currency basis to $265.6 million in the fourth quarter. Adjusted EBITDA was $61.7 million, which advanced 18% year over year and 19% on a constant-currency basis. The epay segment recorded revenues of $342.2 million, which grew 8% year over year and 10% on a constant-currency basis. Adjusted EBITDA improved 10% year over year and 12% on a constant-currency basis to $49.9 million. The Money Transfer segment posted revenues of $441.9 million, which rose 9% year over year and on a constant-currency basis.
American Express reported fourth-quarter 2024 EPS of $3.04, which beat the Zacks Consensus Estimate by a whisker. The bottom line climbed 16% year over year. Total revenues, net of interest expense, amounted to $17.2 billion, which also beat the consensus estimate by a whisker. The top line improved 8.7% year over year. Network volumes of $464 billion rose 7% year over year. Total interest income of $6.1 billion increased 9% year over year. Provision for credit losses declined 10% year over year to $1.3 billion.
The U.S. Consumer Services segment’s pre-tax income of $1.5 billion improved 5% year over year. Total revenues, net of interest expense, climbed 12% year over year to $8.3 billion. The Commercial Services segment recorded a pre-tax income of $814 million, which rose 22% year over year. Total revenues, net of interest expense, amounted to $4.1 billion, which grew 8% year over year. The International Card Services segment reported a pre-tax income of $34 million, which plunged 76% year over year.