The barbell strategy is working exceedingly well for us that we're able to grow the higher rate, higher-yielding business with strong margins on one end, the auto-secured with somewhat lower yields but much better credit on the other end and produce out of that an overall business where the yields have been improving and the NCLs are coming down.
— Rob Beck, President and CEO
03Detailed Report
RM
Company RM
Period
Q3 2024
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedJun 27, 2026
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Executive Summary
Regional Management Corp (RM) delivered solid revenue generation and higher yields in QQ3 2024, underpinned by a disciplined shift toward higher-margin small loans and auto-secured large loans. Management highlighted improving credit quality despite higher-risk loan growth and ongoing hurricane-related reserves. The quarter featured a portfolio expansion to a record $1.82 billion and a 2.6% sequential gain, with net income of $7.7 million and diluted EPS of $0.76, though results were dampened by hurricane-related pretax charges that reduced after-tax earnings. Looking ahead, RM reiterated its barbell growth strategy, signaled continued favorable loan mix dynamics, and maintained full-year 2024 guidance around roughly $40 million in net income, while guiding for stronger receivable growth and margin expansion into 2025. Management also announced a plan to open several new branches in high-potential markets in 2024–2025, which is expected to lift volumes and revenue in 2025. The company remains focused on balancing growth with credit quality, maintaining liquidity and a resilient balance sheet in a challenging macro environment characterized by inflation and hurricane activity.
Key Performance Indicators
Revenue
Increasing
126.98M
QoQ: -11.22% | YoY: 2.46%
Gross Profit
Increasing
120.43M
94.84% margin
QoQ: -13.76% | YoY: 2.39%
Operating Income
Decreasing
33.10M
QoQ: -60.06% | YoY: -51.59%
Net Income
Decreasing
7.42M
QoQ: -12.11% | YoY: -15.85%
EPS
Decreasing
0.77
QoQ: -12.50% | YoY: -18.09%
Revenue Trend
Margin Analysis
Financial Highlights
- Revenue: $126.982 million (YoY +2.46%, QoQ -11.22% per the data set). Management commentary references total revenue of ~$146 million in QQ3 2024, with a ~$3.5 million pre-tax hurricane-related insurance reserve; the different figures reflect disclosures in the supplement vs. the core income statement. - Gross profit: $120.431 million; gross margin ~94.8%. - Operating income: $33.103 million; operating margin ~26.07%. - Net income: $7.422 million; net margin ~5.84%; EPS: $0.77 (diluted $0.74). - NIM/yields: total interest and fee yield 29.9% (YoY +90 bp); total revenue yield 32.6% (QoQ -10 bp from hurricane-related items). - Credit quality: 30+ day delinquency 6.9% (flat vs. prior quarter; -40 bp YoY); net credit loss rate 10.6% (down 40 bp YoY). - Portfolio: net finance receivables $1.82B, up $46M sequentially (+2.6%). Small loan segment up 11% YoY; >36% APR loans ~18% of portfolio (up from 15% YoY). - Provisioning: hurricane-related incremental reserve $2.1M (pre-tax net impact); overall loan loss reserve rate 10.6% (above guidance of ~10.4–10.5%). - Balance sheet: cash and equivalents $4.745M; total debt $1.4306B; stockholders’ equity $353M; debt-to-capitalization ~80.2%; interest expense ~$19.4M in Q3; guidance for Q4 interest expense ~$20.5M. - Cash flow: operating cash flow $75.119M; free cash flow $73.816M; net change in cash -$22.893M; cash at end of period $120.321M.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
126.98M
2.46%
-11.22%
Gross Profit
120.43M
2.39%
-13.76%
Operating Income
33.10M
-51.59%
-60.06%
Net Income
7.42M
-15.85%
-12.11%
EPS
0.77
-18.09%
-12.50%
Key Financial Ratios
Gross Profit Margin
Excellent
94.80%
Gross profit margin is exceptional, indicating strong pricing power and operational efficiency
Operating Profit Margin
Excellent
26.10%
Operating margin is exceptional, indicating strong pricing power and operational efficiency
Net Profit Margin
Fair
5.84%
Net profit margin is moderate, room for improvement in cost management
Return on Assets
Weak
0.41%
Return on assets suggests inefficient capital allocation
Return on Equity
Weak
2.10%
Return on equity suggests inefficient capital allocation
Current Ratio
Concern
0.02
Current ratio below safe levels, potential liquidity risk
Debt to Equity
High Risk
4.05
Debt-to-equity indicates high leverage and elevated financial risk
P/E Ratio
Value
10.67x
P/E ratio suggests potential undervaluation or stable earnings
Price to Book
Undervalued
0.90x
Trading below book value, potential value opportunity or distressed
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