Stock of the Day

June 18, 2021

Regional Management (RM)

$32.10
-$0.45 (-1.4%)
Market Cap: $300.30M

About Regional Management

Regional Management Corp., a diversified consumer finance company, provides various installment loan products primarily to customers with limited access to consumer credit from banks, thrifts, credit card companies, and other lenders in the United States. It offers small and large installment loans; and retail loans to finance the purchase of furniture, appliances, and other retail products. The company also provides insurance products, including credit life, credit accident and health, credit property, vehicle single interest, and credit involuntary unemployment insurance; collateral protection insurance; and property insurance, as well as reinsurance products. In addition, its loans are sourced through branches, centrally-managed direct mail campaigns, and digital partners, as well as its consumer website. The company was incorporated in 1987 and is headquartered in Greer, South Carolina.

Today's Trend

Regional Management Corp. (NYSE: RM) shares came under pressure as investors weighed a modest quarterly earnings beat against weaker year-over-year profitability and rising credit-loss metrics. The stock’s elevated trading volume suggests the earnings release and outlook reset were driving today’s activity.

  • Second-quarter revenue increased 6.7% year over year to $168.0 million, exceeding analysts’ $165.69 million estimate. Adjusted earnings of $0.85 per diluted share also topped consensus by $0.02. Regional Management quarterly earnings report
  • Net finance receivables grew 9.6% to $2.1 billion, while year-to-date net income rose 14% and year-to-date diluted EPS increased 17.3%. Operating expenses also improved as a percentage of revenue. Regional Management Q2 revenue report
  • The company declared a quarterly dividend of $0.30 per share, payable September 16 to shareholders of record on August 19. The dividend represents an annualized yield of approximately 2.8%.
  • Citizens JMP maintained a “market outperform” rating and still sees substantial potential upside, despite lowering its price target from $45 to $43. Benzinga price target update
  • Regional Management repurchased 136,325 shares during the quarter and said its Column N.A. bank partnership has originated more than $65 million in loans, supporting future receivables growth.
  • Quarterly net income fell 19.6% to $8.2 million and diluted EPS declined 17.5%, despite revenue growth. Originations also decreased 1.3% year over year.
  • Provision for credit losses increased 13.9% to $69.0 million, and the net credit loss rate rose to 12.2% from 11.9%, raising concerns about borrower credit quality and future earnings pressure.
  • Reported insider activity has been heavily weighted toward selling, with 27 sales versus one purchase over the past six months, a potentially cautious signal for investors. Regional Management insider activity
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