Regional Management Corp. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net income for the third quarter of 2026 was $15.1 million, an increase of 5.3% year-over-year; diluted earnings per share were $1.61, up 13.4% year-over-year.
• Year-to-date net income was $34.7 million, up 10.0% year-over-year; diluted earnings per share were $3.63, up 15.2% year-over-year.
• Total revenue reached a record $178.8 million for the quarter, an 8.0% increase year-over-year, driven by growth in average net finance receivables and fee income from bank partnerships.
• Year-to-date total revenue was $514.1 million, up 8.0% year-over-year.
• Net finance receivables totaled $2.2 billion as of September 30, 2026, an increase of 7.6% from the prior-year period.
• Total originations were $530.3 million, up 5.3% sequentially and 1.5% year-over-year; large loan originations increased 11.8% year-over-year, while small loan originations decreased 21.9%.
• Provision for credit losses was $66.2 million, up 9.4% year-over-year, driven by higher net credit losses.
• Net credit loss rate was 10.9% for the quarter, an increase of 70 basis points year-over-year but a decrease of 130 basis points sequentially.
• The allowance for credit losses was $230.8 million, representing 10.4% of net finance receivables, up 10 basis points from the prior-year period.
• General and administrative expenses were $68.6 million, up 7.1% year-over-year; the operating expense ratio improved 20 basis points year-over-year to 12.6%.
• Interest and fee yield was 28.7%, a decrease of 100 basis points year-over-year, primarily due to a product mix shift toward larger, lower-yield loans.
• Total revenue yield was 32.9%, a decrease of 20 basis points year-over-year, though it increased 110 basis points sequentially.
• Debt totaled $1.7 billion as of September 30, 2026, consisting of $225.8 million on the senior revolving credit facility, $232.8 million on revolving warehouse facilities, and $1.3 billion in asset-backed securitizations.
• The company had $104.0 million in available liquidity, including unrestricted cash and immediate drawdown capacity.
• The funded debt-to-equity ratio was 4.6 to 1.0; the non-GAAP funded debt-to-tangible equity ratio was 5.1 to 1.0.

Guidance and Future Outlook:

• Management expects strong growth on the bottom line in 2027.
• The company expects substantially all of its branch network to operate under the bank partnership program by the end of 2027.
• The new proprietary origination scorecard is scheduled for full rollout in the fourth quarter of 2026.
• The new branch loan origination platform is expected to go live in all branches during the fourth quarter of 2026.
• Management anticipates digital originations will complement the branch network and become an important contributor to growth over time, scaling only as credit performance validates risk-adjusted returns.

Business Segments and Product Lines:

• Large loan net finance receivables were $1.7 billion, representing 78.8% of the total portfolio, up from 73.7% in the prior-year period; auto-secured receivables specifically were $345.0 million, up 25.2% year-over-year.
• Small loan net finance receivables were $467.9 million, representing 21.2% of the total portfolio, down from 26.3% in the prior-year period.
• The bank partnership with Column N.A. has originated more than $160 million in loans since its March 2026 launch and has expanded to North Carolina, Louisiana, and Missouri following full implementation in Texas.
• The company opened 14 new branches since September 30, 2025, bringing the total branch count to 354.
• End-to-end digital lending was launched in July 2026 to enable customers to complete the entire loan process online.
• Enhanced fraud controls introduced in June include third-party fraud scores, step-up identity verification, and a dedicated central fraud operations team.
• Collections management has been centralized for late-stage delinquent accounts, with the deployment of AI-enabled tools and branded calling to improve engagement and cure rates.

Market and Competitive Landscape:

• The bank partnership program is described as central to the company's competitive strategy, allowing for refined pricing to support growth, credit performance, and risk-adjusted returns.
• The partnership enables more risk-aligned loan pricing, which management believes will reduce adverse selection over time.
• The company operates in 20 states across the United States under the name "Regional Finance."

Risks and Challenges:

• Net credit loss rates increased 70 basis points year-over-year, concentrated in specific segments of the portfolio, primarily loans originated in 2025, with the digital affiliate channel being the largest driver.
• 30+ day contractual delinquencies totaled $165.8 million, or 7.5% of net finance receivables, an increase of 50 basis points both sequentially and year-over-year.
• The 30+ day delinquency rate on the higher-quality auto-secured portfolio was 2.2% as of September 30, 2026.
• The company faces risks related to economic conditions, including unemployment and bankruptcies, which could impact credit risk and repayment risk.
• Risks include the implementation of evolving underwriting models, the effectiveness of custom scorecards, and the ability to timely implement technological improvements.
• Potential risks include security breaches, cyber-attacks, and fraudulent activity.

Management Commentary and Tone:

• Lakhbir S. Lamba, President and CEO, stated that third-quarter results reflect steady execution against priorities, with portfolio growth in line with expectations and disciplined expense management.
• Management identified drivers of the year-over-year credit loss increase and noted actions are in place, including tightened underwriting in underperforming segments and enhanced fraud controls.
• Liz Canini is scheduled to join in early November as Chief Credit Risk Officer to lead the credit organization.
• Management expressed confidence that the bank partnership, combined with disciplined underwriting and investments in talent, technology, and data, positions the company for consistent growth and higher returns.

Other Key Points:

• The Board of Directors declared a dividend of $0.30 per common share for the fourth quarter of 2026, payable on December 16, 2026, to shareholders of record as of November 18, 2026.
• The company repurchased 265,645 shares of common stock in the third quarter of 2026 at a weighted-average price of $37.64 per share.
• A conference call and webcast were scheduled for October 28, 2026, at 5:00 PM ET to discuss the results.
• The company reported a return on average equity of 15.9% for the quarter and 12.3% year-to-date.
• Book value per share was $41.51 as of September 30, 2026.