EX-99.1 2 d433172dex991.htm EX-99.1

Exhibit 99.1

Regional Management Corp. Announces Second Quarter 2017 Results

- Net income of $6.1 million; diluted earnings per share of $0.52 -

- Finance receivable growth of 12.5% from the prior year -

- 30+ day delinquencies as a percentage of finance receivables of 6.5% -

Greenville, South Carolina – August 1, 2017 – Regional Management Corp. (NYSE: RM), a diversified consumer finance company, today announced results for the second quarter ended June 30, 2017.

Second Quarter 2017 Highlights

| • |  | Net income for the second quarter of 2017 was $6.1 million, an increase of 3.8% from the prior-year period. Net income for the second quarter of 2017 included $0.3 million of after-tax Chief Operating Officer transition costs. Diluted earnings per share for the second quarter of 2017 was $0.52, based on a diluted share count of 11.7 million.

| • |  | Total finance receivables as of June 30, 2017 were $726.8 million, an increase of 12.5%, or $81.0 million, from the prior year, and up 4.6%, or $31.8 million, sequentially.

| • |  | Ninth consecutive quarter that total finance receivables have increased at least 10% over the prior-year period.

| • |  | Large loan finance receivables of $267.9 million increased $73.1 million, or 37.5%, from the prior-year period and now represent 36.9% of the total loan portfolio. Small loan finance receivables as of June 30, 2017 were $348.7 million, an increase of 9.0% over the prior-year period.

| • |  | Total revenue for the second quarter of 2017 was $65.3 million, an $8.0 million, or 14.0%, increase from the prior-year period.

| • |  | Interest and fee income increase of 13.7%, driven by a 12.5% increase in receivables compared to the prior-year period.

| • |  | Overall yield increase of 20 basis points on a year-over-year basis.

1

| • |  | Provision for credit losses for the second quarter of 2017 was $18.6 million, an increase of $5.2 million compared to the prior-year period. The provision for credit losses included $1.0 million related to a temporary shift of insurance claims expense. This line shift had no impact on the Company’s net income.

| • |  | Annualized net credit losses as a percentage of finance receivables were 9.9% (inclusive of 0.9% attributable to the shift in insurance claims expense noted above), an increase from 8.6% in the prior-year period. Sequentially, annualized net credit losses were down 100 basis points from 10.9% in the first quarter of 2017.

| • |  | Total delinquencies as a percentage of total finance receivables as of June 30, 2017 were 17.5%, an improvement from 18.3% as of June 30, 2016, and an increase from 15.7% as of March 31, 2017.

| • |  | 30+ day contractual delinquencies were 6.5%, an improvement from 6.8% as of June 30, 2016 and flat sequentially.

| • |  | The Company entered into a $125.0 million revolving warehouse credit facility, which is expandable to $150.0 million, and also increased the committed line under its senior revolving credit facility to $638.0 million from its previous amount of $585.0 million.

“We were pleased with our second quarter performance, driven once again by double-digit top-line and finance receivables growth and further improving credit trends,” said Peter R. Knitzer, President and Chief Executive Officer of Regional Management. “Our ongoing focus on our core small and large loan categories led us to generate a 14% year-over-year increase in interest and fee income. In addition, we continued to concentrate on stabilizing credit, and as a result, we managed to reduce our net credit losses a full 100 basis points from the first quarter and keep our 30+ day delinquency level flat.”

“In addition to our strong results, in June we announced that we had entered into a $125 million warehouse credit facility, expandable to $150 million, and further increased our committed line under our revolving credit facility to $638 million,” added Mr. Knitzer. “Finally, we successfully converted our branches in Oklahoma and South Carolina to our new operating platform, and we remain on schedule to have all states converted to the new platform by the end of 2017. Overall, we continue to make good progress with our growth strategy and the buildout of our infrastructure in order to deliver long-term shareholder value.”

Second Quarter 2017 Results

Finance receivables outstanding at June 30, 2017 were $726.8 million, a 12.5% increase from $645.7 million in the prior year. Finance receivables increased primarily due to an increase in both the core small and large loan portfolios and the addition of eight net new branches.

2

For the second quarter ended June 30, 2017, the Company reported total revenue of $65.3 million, a 14.0% increase from $57.3 million in the prior-year period. Interest and fee income for the second quarter of 2017 was $59.8 million, a 13.7% increase from $52.6 million in the prior-year period, primarily due to an increase in the portfolios of both small and large loans compared to the prior-year period. Insurance income, net for the second quarter of 2017 was $3.1 million, an increase of $0.5 million from the prior-year period primarily due to a transition in insurance carriers, causing some of the Company’s insurance claims to impact net credit losses instead of insurance income. Other income for the second quarter of 2017 was $2.5 million, a 15.5% increase from the prior-year period and consistent with portfolio growth.

The provision for credit losses in the second quarter of 2017 was $18.6 million, compared to $13.4 million in the prior-year period. The increase was primarily due to the $81.0 million increase in finance receivables, the temporary shift of $1.0 million in insurance claims expense, and a $1.0 million build in allowance for credit losses compared to a slight release in the second quarter of 2016.

Net credit losses were $17.6 million in the second quarter of 2017, compared to $13.4 million in the prior-year period, consistent with portfolio growth. Net credit losses for the second quarter of 2017 included $1.6 million of losses attributable to a temporary shift of certain insurance claims expense into net credit losses during a transition in the Company’s insurance provider. Annualized net credit losses as a percentage of average finance receivables in the second quarter of 2017 were 9.9% (inclusive of 0.9% attributable to the shift in insurance claims expense noted above), an increase from 8.6% in the prior-year period, but an improvement from 10.9% in the first quarter of 2017.

General and administrative expenses for the second quarter of 2017 were $31.6 million, an increase of 7.1%, or $2.1 million, from the prior-year period. General and administrative expenses for the second quarters of 2017 and 2016 included $0.3 million and $0.6 million of loan system conversion costs, respectively. Sequentially, general and administrative expenses increased $0.2 million, or 0.6%, from the first quarter of 2017 as increased marketing and personnel costs were mostly offset by a decrease in other expenses.

Net income for the second quarter of 2017 was $6.1 million, an increase from $5.9 million in the prior-year period. Diluted earnings per share for the second quarter of 2017 were $0.52, an increase from $0.49 in the prior-year period.

First Half 2017 Results

For the six months ended June 30, 2017, the Company reported total revenue of $131.2 million, a 15.0% increase from $114.0 million in the prior-year period. Interest and fee income for the six months ended June 30, 2017 was $119.0 million, a 14.6% increase from $103.9 million in the prior-year period, primarily due to an increase in the portfolios of both small and large installment loans compared to the prior-year period. Insurance income, net for the six months ended June 30, 2017 was $6.9 million, a 24.4% increase from the prior-year period, in part due to the temporary shift of certain claims expense into provision for credit losses during the Company’s transition to a new insurance provider. Other income for the six months ended June 30, 2017 was $5.2 million, a 13.8% increase from the prior-year period.

3

The provision for credit losses for the six months ended June 30, 2017 was $37.7 million versus $27.2 million in the prior-year period. Net credit losses for the six months ended June 30, 2017 were $37.0 million, which includes $2.6 million of losses attributable to a temporary shift of certain insurance claims expense into net credit losses during a transition in the Company’s insurance provider, compared to $28.4 million in the prior-year period. Annualized net credit losses as a percentage of average finance receivables for the six months ended June 30, 2017 were 10.4% (inclusive of 0.7% attributable to the shift in insurance claims expense noted above), an increase from 9.1% in the prior-year period.

General and administrative expenses for the six months ended June 30, 2017 were $63.1 million, an increase of $3.7 million, or 6.3%, from $59.4 million in the prior-year period. Included in the six months 2017 and 2016 results were $0.8 million and $1.0 million in loan system conversion costs, respectively.

Net income for the six months ended June 30, 2017 was $13.8 million, a 24.2% increase compared to net income of $11.1 million in the prior-year period. The net income increase for the six months ended June 30, 2017 was partially due to $1.5 million of tax benefits from the exercise or vesting of share-based compensation that occurred during the first half of 2017. Diluted earnings per share for the six months ended June 30, 2017 was $1.17 compared to $0.89 in the prior-year period.

2017 De Novo Outlook

As of June 30, 2017, the Company’s branch network consisted of 347 locations. Regional Management opened 3 net de novo branches in the second quarter of 2017 and a total of 8 net de novo branches for the first half of 2017. For the full year 2017, the Company maintains its plan to open between 10 and 15 de novo branches.

Liquidity and Capital Resources

As of June 30, 2017, the Company had finance receivables of $726.8 million and outstanding long-term debt of $497.0 million (consisting of $446.6 million of long-term debt on its $638.0 million senior revolving credit facility, $24.0 million of long-term debt on its $125.0 million revolving warehouse credit facility, and $26.4 million of long-term debt on its $75.7 million amortizing loan). During the second quarter of 2017, the Company entered into a $125.0 million revolving warehouse credit facility, which is expandable to $150.0 million and is secured by certain large loan receivables. The warehouse credit facility has an initial term of 18 months, to be followed by a 12-month amortization period.

Conference Call Information

Regional Management Corp. will host a conference call and webcast today at 5:00 PM ET to discuss these results.

The dial-in number for the conference call is (855) 590-2959 (toll-free) or (503) 343-6651 (direct), passcode 53608307. Please dial the number 10 minutes prior to the scheduled start time.

4

*** A supplemental slide presentation will be made available on Regional Management’s website prior to the earnings call at www.RegionalManagement.com. ***

In addition, a live webcast of the conference call will also be available on Regional Management’s website at www.RegionalManagement.com.

A replay will be available following the end of the call through Tuesday, August 8, 2017, by telephone at (855) 859-2056 (toll-free) or (404) 537-3406 (direct), passcode 53608307. A webcast replay of the call will be available at www.RegionalManagement.com for one year following the call.

Forward-Looking Statements

This press release may contain various “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, which represent Regional Management Corp.’s expectations or beliefs concerning future events. Words such as “may,” “will,” “should,” “likely,” “anticipates,” “expects,” “intends,” “plans,” “projects,” “believes,” “estimates,” “outlook,” and similar expressions may be used to identify these forward-looking statements. Such forward-looking statements are about matters that are inherently subject to risks and uncertainties, many of which are outside of the control of Regional Management. Factors that could cause actual results or performance to differ from the expectations expressed or implied in such forward-looking statements include, but are not limited to, the following: changes in general economic conditions, including levels of unemployment and bankruptcies; risks associated with Regional Management’s transition to a new loan origination and servicing software system; risks related to opening new branches, including the ability or inability to open new branches as planned; risks inherent in making loans, including repayment risks and value of collateral, which risks may increase in light of adverse or recessionary economic conditions; changes in interest rates; the risk that Regional Management’s existing sources of liquidity become insufficient to satisfy its needs or that its access to these sources becomes unexpectedly restricted; changes in federal, state, or local laws, regulations, or regulatory policies and practices, and risks associated with the manner in which laws and regulations are interpreted, implemented, and enforced; the timing and amount of revenues that may be recognized by Regional Management; changes in current revenue and expense trends (including trends affecting delinquencies and credit losses); changes in Regional Management’s markets and general changes in the economy (particularly in the markets served by Regional Management); changes in the competitive environment in which Regional Management operates or in the demand for its products; risks related to acquisitions; changes in operating and administrative expenses; and the departure, transition, or replacement of key personnel. Such factors and others are discussed in greater detail in Regional Management’s filings with the Securities and Exchange Commission. Regional Management will not update the information contained in this press release beyond the publication date, except to the extent required by law, and is not responsible for changes made to this document by wire services or Internet services.

5

About Regional Management Corp.

Regional Management Corp. (NYSE: RM) is a diversified consumer finance company providing a broad array of loan products primarily to customers with limited access to consumer credit from banks, thrifts, credit card companies, and other traditional lenders. Regional Management began operations in 1987 with four branches in South Carolina and has since expanded its branch network across South Carolina, Texas, North Carolina, Tennessee, Alabama, Oklahoma, New Mexico, Georgia, and Virginia. Each of its loan products is structured on a fixed rate, fixed term basis with fully amortizing equal monthly installment payments and is repayable at any time without penalty. Regional Management’s loans are sourced through its multiple channel platform, including in its branches, through direct mail campaigns, independent and franchise automobile dealerships, online credit application networks, retailers, and its consumer website. For more information, please visit www.RegionalManagement.com.

Contact:

Investor Relations

Garrett Edson, (203) 682-8331

6

Regional Management Corp. and Subsidiaries

Consolidated Statements of Income

(Unaudited)

(in thousands, except per share amounts)

|  |  |  |  |  |  |  | Better (Worse) |  |  |  |  |  |  |  |  | Better (Worse) |
|  | 2Q 17 |  |  | 2Q 16 |  |  | $ |  |  | % |  |  | YTD 17 |  |  | YTD 16 |  |  | $ |  |  | % |
Revenue |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest and fee income |  | $ | 59,787 |  |  | $ | 52,589 |  |  | $ | 7,198 |  |  |  | 13.7 | % |  | $ | 119,042 |  |  | $ | 103,889 |  |  | $ | 15,153 |  |  |  | 14.6 | %
Insurance income, net |  |  | 3,085 |  |  |  | 2,601 |  |  |  | 484 |  |  |  | 18.6 | % |  |  | 6,890 |  |  |  | 5,540 |  |  |  | 1,350 |  |  |  | 24.4 | %
Other income |  |  | 2,466 |  |  |  | 2,135 |  |  |  | 331 |  |  |  | 15.5 | % |  |  | 5,226 |  |  |  | 4,593 |  |  |  | 633 |  |  |  | 13.8 | %
Total revenue |  |  | 65,338 |  |  |  | 57,325 |  |  |  | 8,013 |  |  |  | 14.0 | % |  |  | 131,158 |  |  |  | 114,022 |  |  |  | 17,136 |  |  |  | 15.0 | %
Expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Provision for credit losses |  |  | 18,589 |  |  |  | 13,386 |  |  |  | (5,203 | ) |  |  | (38.9 | )% |  |  | 37,723 |  |  |  | 27,177 |  |  |  | (10,546 | ) |  |  | (38.8 | )%
Personnel |  |  | 18,387 |  |  |  | 16,674 |  |  |  | (1,713 | ) |  |  | (10.3 | )% |  |  | 36,555 |  |  |  | 33,801 |  |  |  | (2,754 | ) |  |  | (8.1 | )%
Occupancy |  |  | 5,419 |  |  |  | 4,770 |  |  |  | (649 | ) |  |  | (13.6 | )% |  |  | 10,704 |  |  |  | 9,633 |  |  |  | (1,071 | ) |  |  | (11.1 | )%
Marketing |  |  | 1,779 |  |  |  | 2,062 |  |  |  | 283 |  |  |  | 13.7 | % |  |  | 2,984 |  |  |  | 3,577 |  |  |  | 593 |  |  |  | 16.6 | %
Other |  |  | 6,057 |  |  |  | 6,042 |  |  |  | (15 | ) |  |  | (0.2 | )% |  |  | 12,853 |  |  |  | 12,342 |  |  |  | (511 | ) |  |  | (4.1 | )%
Total general and administrative |  |  | 31,642 |  |  |  | 29,548 |  |  |  | (2,094 | ) |  |  | (7.1 | )% |  |  | 63,096 |  |  |  | 59,353 |  |  |  | (3,743 | ) |  |  | (6.3 | )%
Interest expense |  |  | 5,221 |  |  |  | 4,811 |  |  |  | (410 | ) |  |  | (8.5 | )% |  |  | 10,434 |  |  |  | 9,521 |  |  |  | (913 | ) |  |  | (9.6 | )%
Income before income taxes |  |  | 9,886 |  |  |  | 9,580 |  |  |  | 306 |  |  |  | 3.2 | % |  |  | 19,905 |  |  |  | 17,971 |  |  |  | 1,934 |  |  |  | 10.8 | %
Income taxes |  |  | 3,751 |  |  |  | 3,668 |  |  |  | (83 | ) |  |  | (2.3 | )% |  |  | 6,136 |  |  |  | 6,883 |  |  |  | 747 |  |  |  | 10.9 | %
Net income |  | $ | 6,135 |  |  | $ | 5,912 |  |  | $ | 223 |  |  |  | 3.8 | % |  | $ | 13,769 |  |  | $ | 11,088 |  |  | $ | 2,681 |  |  |  | 24.2 | %
Net income per common share: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic |  | $ | 0.53 |  |  | $ | 0.50 |  |  | $ | 0.03 |  |  |  | 6.0 | % |  | $ | 1.19 |  |  | $ | 0.90 |  |  | $ | 0.29 |  |  |  | 32.2 | %
Diluted |  | $ | 0.52 |  |  | $ | 0.49 |  |  | $ | 0.03 |  |  |  | 6.1 | % |  | $ | 1.17 |  |  | $ | 0.89 |  |  | $ | 0.28 |  |  |  | 31.5 | %
Weighted-average shares outstanding: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic |  |  | 11,554 |  |  |  | 11,756 |  |  |  | 202 |  |  |  | 1.7 | % |  |  | 11,524 |  |  |  | 12,256 |  |  |  | 732 |  |  |  | 6.0 | %
Diluted |  |  | 11,730 |  |  |  | 11,974 |  |  |  | 244 |  |  |  | 2.0 | % |  |  | 11,723 |  |  |  | 12,462 |  |  |  | 739 |  |  |  | 5.9 | %
Return on average assets (annualized) |  |  | 3.5 | % |  |  | 3.8 | % |  |  |  |  |  |  |  |  |  |  | 3.9 | % |  |  | 3.6 | % |  |  |  |  |  |  |  |
Return on average equity (annualized) |  |  | 11.3 | % |  |  | 12.0 | % |  |  |  |  |  |  |  |  |  |  | 12.9 | % |  |  | 11.1 | % |  |  |  |  |  |  |  |

7

Regional Management Corp. and Subsidiaries

Consolidated Balance Sheets

(Unaudited)

(in thousands, except par value amounts)

|  |  |  |  |  |  |  | Increase (Decrease) |
|  | 2Q 17 |  |  | 2Q 16 |  |  | $ |  |  | % |
Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash |  | $ | 3,678 |  |  | $ | 2,827 |  |  | $ | 851 |  |  |  | 30.1 | %
Gross finance receivables |  |  | 933,257 |  |  |  | 820,688 |  |  |  | 112,569 |  |  |  | 13.7 | %
Unearned finance charges and insurance premiums |  |  | (206,490 | ) |  |  | (174,944 | ) |  |  | (31,546 | ) |  |  | (18.0 | )%
Finance receivables |  |  | 726,767 |  |  |  | 645,744 |  |  |  | 81,023 |  |  |  | 12.5 | %
Allowance for credit losses |  |  | (42,000 | ) |  |  | (36,200 | ) |  |  | (5,800 | ) |  |  | (16.0 | )%
Net finance receivables |  |  | 684,767 |  |  |  | 609,544 |  |  |  | 75,223 |  |  |  | 12.3 | %
Property and equipment |  |  | 11,653 |  |  |  | 9,208 |  |  |  | 2,445 |  |  |  | 26.6 | %
Restricted cash |  |  | 10,630 |  |  |  | 8,237 |  |  |  | 2,393 |  |  |  | 29.1 | %
Intangible assets |  |  | 8,480 |  |  |  | 4,601 |  |  |  | 3,879 |  |  |  | 84.3 | %
Deferred tax asset |  |  | 1,776 |  |  |  | — |  |  |  | 1,776 |  |  |  | 100.0 | %
Other assets |  |  | 6,549 |  |  |  | 8,386 |  |  |  | (1,837 | ) |  |  | (21.9 | )%
Total assets |  | $ | 727,533 |  |  | $ | 642,803 |  |  | $ | 84,730 |  |  |  | 13.2 | %
Liabilities and Stockholders’ Equity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Long-term debt |  | $ | 497,049 |  |  | $ | 441,147 |  |  | $ | 55,902 |  |  |  | 12.7 | %
Unamortized debt issuance costs |  |  | (5,539 | ) |  |  | (2,285 | ) |  |  | (3,254 | ) |  |  | (142.4 | )%
Net long-term debt |  |  | 491,510 |  |  |  | 438,862 |  |  |  | 52,648 |  |  |  | 12.0 | %
Accounts payable and accrued expenses |  |  | 14,656 |  |  |  | 10,571 |  |  |  | 4,085 |  |  |  | 38.6 | %
Deferred tax liability |  |  | — |  |  |  | 446 |  |  |  | (446 | ) |  |  | (100.0 | )%
Total liabilities |  |  | 506,166 |  |  |  | 449,879 |  |  |  | 56,287 |  |  |  | 12.5 | %
Commitments and Contingencies |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Stockholders’ equity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Preferred stock ($0.10 par value, 100,000 shares authorized, no shares issued or outstanding) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Common stock ($0.10 par value, 1,000,000 shares authorized, 13,201 shares issued and 11,655 shares outstanding at June 30, 2017 and 12,961 shares issued and 11,415 shares outstanding at June 30, 2016) |  |  | 1,320 |  |  |  | 1,296 |  |  |  | 24 |  |  |  | 1.9 | %
Additional paid-in-capital |  |  | 92,535 |  |  |  | 90,828 |  |  |  | 1,707 |  |  |  | 1.9 | %
Retained earnings |  |  | 152,558 |  |  |  | 125,846 |  |  |  | 26,712 |  |  |  | 21.2 | %
Treasury stock (1,546 shares at June 30, 2017 and 2016) |  |  | (25,046 | ) |  |  | (25,046 | ) |  |  | — |  |  |  | 0.0 | %
Total stockholders’ equity |  |  | 221,367 |  |  |  | 192,924 |  |  |  | 28,443 |  |  |  | 14.7 | %
Total liabilities and stockholders’ equity |  | $ | 727,533 |  |  | $ | 642,803 |  |  | $ | 84,730 |  |  |  | 13.2 | %

8

Regional Management Corp. and Subsidiaries

Selected Financial Data

(Unaudited)

(in thousands, except per share amounts)

|  | Averages and Yields |
|  | 2Q 17 |  |  | 1Q 17 |  |  | 2Q 16 |
|  | Average Finance Receivables |  |  | Average Yield (Annualized) |  |  | Average Finance Receivables |  |  | Average Yield (Annualized) |  |  | Average Finance Receivables |  |  | Average Yield (Annualized) |
Small loans |  | $ | 341,184 |  |  |  | 42.9 | % |  | $ | 349,521 |  |  |  | 42.3 | % |  | $ | 313,388 |  |  |  | 43.0 | %
Large loans |  |  | 253,049 |  |  |  | 29.0 | % |  |  | 239,033 |  |  |  | 28.7 | % |  |  | 178,683 |  |  |  | 28.8 | %
Automobile loans |  |  | 83,082 |  |  |  | 16.5 | % |  |  | 88,150 |  |  |  | 16.6 | % |  |  | 103,626 |  |  |  | 17.9 | %
Retail loans |  |  | 30,486 |  |  |  | 19.1 | % |  |  | 32,560 |  |  |  | 18.7 | % |  |  | 29,007 |  |  |  | 19.1 | %
Total interest and fee yield |  | $ | 707,801 |  |  |  | 33.8 | % |  | $ | 709,264 |  |  |  | 33.4 | % |  | $ | 624,704 |  |  |  | 33.7 | %
Total revenue yield |  | $ | 707,801 |  |  |  | 36.9 | % |  | $ | 709,264 |  |  |  | 37.1 | % |  | $ | 624,704 |  |  |  | 36.7 | %

|  | Components of Increase in Interest and Fee Income 2Q 17 Compared to 2Q 16 Increase (Decrease) |
|  | Volume |  |  | Rate |  |  | Volume & Rate |  |  | Net |
Small loans |  | $ | 2,988 |  |  | $ | (81 | ) |  | $ | (7 | ) |  | $ | 2,900 |
Large loans |  |  | 5,358 |  |  |  | 60 |  |  |  | 26 |  |  |  | 5,444 |
Automobile loans |  |  | (921 | ) |  |  | (365 | ) |  |  | 73 |  |  |  | (1,213 | )
Retail loans |  |  | 71 |  |  |  | (3 | ) |  |  | (1 | ) |  |  | 67 |
Product mix |  |  | (501 | ) |  |  | 568 |  |  |  | (67 | ) |  |  | — |
Total increase in interest and fee income |  | $ | 6,995 |  |  | $ | 179 |  |  | $ | 24 |  |  | $ | 7,198 |

|  | Net Loans Originated (1) |
|  | 2Q 17 |  |  | 1Q 17 |  |  | QoQ $ Inc (Dec) |  |  | QoQ % Inc (Dec) |  |  | 2Q 16 |  |  | YoY $ Inc (Dec) |  |  | YoY % Inc (Dec) |
Small loans |  | $ | 160,380 |  |  | $ | 115,359 |  |  | $ | 45,021 |  |  |  | 39.0 | % |  | $ | 153,049 |  |  | $ | 7,331 |  |  |  | 4.8 | %
Large loans |  |  | 86,771 |  |  |  | 57,020 |  |  |  | 29,751 |  |  |  | 52.2 | % |  |  | 72,174 |  |  |  | 14,597 |  |  |  | 20.2 | %
Automobile loans |  |  | 5,828 |  |  |  | 8,789 |  |  |  | (2,961 | ) |  |  | (33.7 | )% |  |  | 9,355 |  |  |  | (3,527 | ) |  |  | (37.7 | )%
Retail loans |  |  | 6,353 |  |  |  | 6,264 |  |  |  | 89 |  |  |  | 1.4 | % |  |  | 8,627 |  |  |  | (2,274 | ) |  |  | (26.4 | )%
Total net loans originated |  | $ | 259,332 |  |  | $ | 187,432 |  |  | $ | 71,900 |  |  |  | 38.4 | % |  | $ | 243,205 |  |  | $ | 16,127 |  |  |  | 6.6 | %

(1) | Represents the balance of loan origination and refinancing net of unearned finance charges

9

|  | Other Key Metrics |
|  | 2Q 17 |  |  | 1Q 17 |  |  | 2Q 16 |
Net credit losses |  | $ | 17,589 |  |  | $ | 19,384 |  |  | $ | 13,416 |
Percentage of average finance receivables (annualized) |  |  | 9.9 | % |  |  | 10.9 | % |  |  | 8.6 | %
Provision for credit losses |  | $ | 18,589 |  |  | $ | 19,134 |  |  | $ | 13,386 |
Percentage of average finance receivables (annualized) |  |  | 10.5 | % |  |  | 10.8 | % |  |  | 8.6 | %
Percentage of total revenue |  |  | 28.5 | % |  |  | 29.1 | % |  |  | 23.4 | %
General and administrative expenses |  | $ | 31,642 |  |  | $ | 31,454 |  |  | $ | 29,548 |
Percentage of average finance receivables (annualized) |  |  | 17.9 | % |  |  | 17.7 | % |  |  | 18.9 | %
Percentage of total revenue |  |  | 48.4 | % |  |  | 47.8 | % |  |  | 51.5 | %
Same store results: |  |  |  |  |  |  |  |  |  |  |  |
Finance receivables at period-end |  | $ | 723,547 |  |  | $ | 682,218 |  |  | $ | 611,589 |
Finance receivable growth rate |  |  | 12.0 | % |  |  | 12.6 | % |  |  | 9.5 | %
Number of branches in calculation |  |  | 336 |  |  |  | 329 |  |  |  | 306 |

|  | Finance Receivables by Product |
|  | 2Q 17 |  |  | 1Q 17 |  |  | QoQ $ Inc (Dec) |  |  | QoQ % Inc (Dec) |  |  | 2Q 16 |  |  | YoY $ Inc (Dec) |  |  | YoY % Inc (Dec) |
Small loans |  | $ | 348,742 |  |  | $ | 335,552 |  |  | $ | 13,190 |  |  |  | 3.9 | % |  | $ | 320,077 |  |  | $ | 28,665 |  |  |  | 9.0 | %
Large loans |  |  | 267,921 |  |  |  | 242,380 |  |  |  | 25,541 |  |  |  | 10.5 | % |  |  | 194,857 |  |  |  | 73,064 |  |  |  | 37.5 | %
Total core loans |  |  | 616,663 |  |  |  | 577,932 |  |  |  | 38,731 |  |  |  | 6.7 | % |  |  | 514,934 |  |  |  | 101,729 |  |  |  | 19.8 | %
Automobile loans |  |  | 79,861 |  |  |  | 85,869 |  |  |  | (6,008 | ) |  |  | (7.0 | )% |  |  | 100,721 |  |  |  | (20,860 | ) |  |  | (20.7 | )%
Retail loans |  |  | 30,243 |  |  |  | 31,203 |  |  |  | (960 | ) |  |  | (3.1 | )% |  |  | 30,089 |  |  |  | 154 |  |  |  | 0.5 | %
Total finance receivables |  | $ | 726,767 |  |  | $ | 695,004 |  |  | $ | 31,763 |  |  |  | 4.6 | % |  | $ | 645,744 |  |  | $ | 81,023 |  |  |  | 12.5 | %
Number of branches at period end |  |  | 347 |  |  |  | 344 |  |  |  | 3 |  |  |  | 0.9 | % |  |  | 338 |  |  |  | 9 |  |  |  | 2.7 | %
Average finance receivables per branch |  | $ | 2,094 |  |  | $ | 2,020 |  |  | $ | 74 |  |  |  | 3.7 | % |  | $ | 1,910 |  |  | $ | 184 |  |  |  | 9.6 | %

10

|  | Contractual Delinquency by Aging |
|  | 2Q 17 |  |  | 1Q 17 |  |  | 2Q 16 |
Allowance for credit losses |  | $ | 42,000 |  |  |  | 5.8 | % |  | $ | 41,000 |  |  |  | 5.9 | % |  | $ | 36,200 |  |  |  | 5.6 | %
Current |  |  | 599,344 |  |  |  | 82.5 | % |  |  | 586,085 |  |  |  | 84.3 | % |  |  | 527,080 |  |  |  | 81.7 | %
1 to 29 days past due |  |  | 80,064 |  |  |  | 11.0 | % |  |  | 63,978 |  |  |  | 9.2 | % |  |  | 74,439 |  |  |  | 11.5 | %
Delinquent accounts: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
30 to 59 days |  |  | 17,018 |  |  |  | 2.3 | % |  |  | 13,860 |  |  |  | 2.1 | % |  |  | 16,710 |  |  |  | 2.5 | %
60 to 89 days |  |  | 10,726 |  |  |  | 1.5 | % |  |  | 9,889 |  |  |  | 1.4 | % |  |  | 10,045 |  |  |  | 1.6 | %
90 to 119 days |  |  | 7,793 |  |  |  | 1.0 | % |  |  | 7,569 |  |  |  | 1.0 | % |  |  | 7,237 |  |  |  | 1.1 | %
120 to 149 days |  |  | 6,302 |  |  |  | 0.9 | % |  |  | 6,975 |  |  |  | 1.0 | % |  |  | 5,358 |  |  |  | 0.8 | %
150 to 179 days |  |  | 5,520 |  |  |  | 0.8 | % |  |  | 6,648 |  |  |  | 1.0 | % |  |  | 4,875 |  |  |  | 0.8 | %
Total contractual delinquency |  | $ | 47,359 |  |  |  | 6.5 | % |  | $ | 44,941 |  |  |  | 6.5 | % |  | $ | 44,225 |  |  |  | 6.8 | %
Total finance receivables |  | $ | 726,767 |  |  |  | 100.0 | % |  | $ | 695,004 |  |  |  | 100.0 | % |  | $ | 645,744 |  |  |  | 100.0 | %
1 day and over past due |  | $ | 127,423 |  |  |  | 17.5 | % |  | $ | 108,919 |  |  |  | 15.7 | % |  | $ | 118,664 |  |  |  | 18.3 | %

|  | Contractual Delinquency by Product |
|  | 2Q 17 |  |  | 1Q 17 |  |  | 2Q 16 |
Small loans |  | $ | 26,610 |  |  |  | 7.6 | % |  | $ | 26,573 |  |  |  | 7.9 | % |  | $ | 26,436 |  |  |  | 8.3 | %
Large loans |  |  | 13,839 |  |  |  | 5.2 | % |  |  | 12,142 |  |  |  | 5.0 | % |  |  | 8,459 |  |  |  | 4.3 | %
Automobile loans |  |  | 5,172 |  |  |  | 6.5 | % |  |  | 4,513 |  |  |  | 5.3 | % |  |  | 7,768 |  |  |  | 7.7 | %
Retail loans |  |  | 1,738 |  |  |  | 5.7 | % |  |  | 1,713 |  |  |  | 5.5 | % |  |  | 1,562 |  |  |  | 5.2 | %
Total contractual delinquency |  | $ | 47,359 |  |  |  | 6.5 | % |  | $ | 44,941 |  |  |  | 6.5 | % |  | $ | 44,225 |  |  |  | 6.8 | %

11

|  | Quarterly Trend |
|  | 2Q 16 |  |  | 3Q 16 |  |  | 4Q 16 |  |  | 1Q 17 |  |  | 2Q 17 |  |  | QoQ $ B(W) |  |  | YoY $ B(W) |
Revenue |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest and fee income |  | $ | 52,589 |  |  | $ | 57,420 |  |  | $ | 59,654 |  |  | $ | 59,255 |  |  | $ | 59,787 |  |  | $ | 532 |  |  | $ | 7,198 |
Insurance income, net |  |  | 2,601 |  |  |  | 2,346 |  |  |  | 1,570 |  |  |  | 3,805 |  |  |  | 3,085 |  |  |  | (720 | ) |  |  | 484 |
Other income |  |  | 2,135 |  |  |  | 2,709 |  |  |  | 2,797 |  |  |  | 2,760 |  |  |  | 2,466 |  |  |  | (294 | ) |  |  | 331 |
Total revenue |  |  | 57,325 |  |  |  | 62,475 |  |  |  | 64,021 |  |  |  | 65,820 |  |  |  | 65,338 |  |  |  | (482 | ) |  |  | 8,013 |
Expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Provision for credit losses |  |  | 13,386 |  |  |  | 16,410 |  |  |  | 19,427 |  |  |  | 19,134 |  |  |  | 18,589 |  |  |  | 545 |  |  |  | (5,203 | )
Personnel |  |  | 16,674 |  |  |  | 18,180 |  |  |  | 16,998 |  |  |  | 18,168 |  |  |  | 18,387 |  |  |  | (219 | ) |  |  | (1,713 | )
Occupancy |  |  | 4,770 |  |  |  | 5,175 |  |  |  | 5,251 |  |  |  | 5,285 |  |  |  | 5,419 |  |  |  | (134 | ) |  |  | (649 | )
Marketing |  |  | 2,062 |  |  |  | 1,786 |  |  |  | 1,474 |  |  |  | 1,205 |  |  |  | 1,779 |  |  |  | (574 | ) |  |  | 283 |
Other |  |  | 6,042 |  |  |  | 5,312 |  |  |  | 5,103 |  |  |  | 6,796 |  |  |  | 6,057 |  |  |  | 739 |  |  |  | (15 | )
Total general and administrative |  |  | 29,548 |  |  |  | 30,453 |  |  |  | 28,826 |  |  |  | 31,454 |  |  |  | 31,642 |  |  |  | (188 | ) |  |  | (2,094 | )
Interest expense |  |  | 4,811 |  |  |  | 5,116 |  |  |  | 5,287 |  |  |  | 5,213 |  |  |  | 5,221 |  |  |  | (8 | ) |  |  | (410 | )
Income before income taxes |  |  | 9,580 |  |  |  | 10,496 |  |  |  | 10,481 |  |  |  | 10,019 |  |  |  | 9,886 |  |  |  | (133 | ) |  |  | 306 |
Income taxes |  |  | 3,668 |  |  |  | 4,020 |  |  |  | 4,014 |  |  |  | 2,385 |  |  |  | 3,751 |  |  |  | (1,366 | ) |  |  | (83 | )
Net income |  | $ | 5,912 |  |  | $ | 6,476 |  |  | $ | 6,467 |  |  | $ | 7,634 |  |  | $ | 6,135 |  |  | $ | (1,499 | ) |  | $ | 223 |
Net income per common share: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic |  | $ | 0.50 |  |  | $ | 0.57 |  |  | $ | 0.57 |  |  | $ | 0.66 |  |  | $ | 0.53 |  |  | $ | (0.13 | ) |  | $ | 0.03 |
Diluted |  | $ | 0.49 |  |  | $ | 0.56 |  |  | $ | 0.55 |  |  | $ | 0.65 |  |  | $ | 0.52 |  |  | $ | (0.13 | ) |  | $ | 0.03 |
Weighted-average shares outstanding: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic |  |  | 11,756 |  |  |  | 11,384 |  |  |  | 11,408 |  |  |  | 11,494 |  |  |  | 11,554 |  |  |  | (60 | ) |  |  | 202 |
Diluted |  |  | 11,974 |  |  |  | 11,664 |  |  |  | 11,763 |  |  |  | 11,715 |  |  |  | 11,730 |  |  |  | (15 | ) |  |  | 244 |
Net interest margin |  | $ | 52,514 |  |  | $ | 57,359 |  |  | $ | 58,734 |  |  | $ | 60,607 |  |  | $ | 60,117 |  |  | $ | (490 | ) |  | $ | 7,603 |
Net credit margin |  | $ | 39,128 |  |  | $ | 40,949 |  |  | $ | 39,307 |  |  | $ | 41,473 |  |  | $ | 41,528 |  |  | $ | 55 |  |  | $ | 2,400 |
|  | 2Q 16 |  |  | 3Q 16 |  |  | 4Q 16 |  |  | 1Q 17 |  |  | 2Q 17 |  |  | QoQ $ Inc (Dec) |  |  | YoY $ Inc (Dec) |
Total assets |  | $ | 642,803 |  |  | $ | 691,329 |  |  | $ | 712,224 |  |  | $ | 690,432 |  |  | $ | 727,533 |  |  | $ | 37,101 |  |  | $ | 84,730 |
Finance receivables |  | $ | 645,744 |  |  | $ | 696,149 |  |  | $ | 717,775 |  |  | $ | 695,004 |  |  | $ | 726,767 |  |  | $ | 31,763 |  |  | $ | 81,023 |
Allowance for credit losses |  | $ | 36,200 |  |  | $ | 39,100 |  |  | $ | 41,250 |  |  | $ | 41,000 |  |  | $ | 42,000 |  |  | $ | 1,000 |  |  | $ | 5,800 |
Long-term debt |  | $ | 441,147 |  |  | $ | 481,766 |  |  | $ | 491,678 |  |  | $ | 462,994 |  |  | $ | 497,049 |  |  | $ | 34,055 |  |  | $ | 55,902 |
|  | General & Administrative Expenses Trend |
|  | 2Q 16 |  |  | 3Q 16 |  |  | 4Q 16 |  |  | 1Q 17 |  |  | 2Q 17 |  |  | QoQ $ B(W) |  |  | YoY $ B(W) |
Legacy operations expenses |  | $ | 18,224 |  |  | $ | 19,596 |  |  | $ | 19,238 |  |  | $ | 20,497 |  |  | $ | 19,208 |  |  | $ | 1,289 |  |  | $ | (984 | )
2017 new branch expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 276 |  |  |  | 499 |  |  |  | (223 | ) |  |  | (499 | )
Total operations expenses |  |  | 18,224 |  |  |  | 19,596 |  |  |  | 19,238 |  |  |  | 20,773 |  |  |  | 19,707 |  |  |  | 1,066 |  |  |  | (1,483 | )
Marketing expenses |  |  | 2,062 |  |  |  | 1,786 |  |  |  | 1,474 |  |  |  | 1,205 |  |  |  | 1,779 |  |  |  | (574 | ) |  |  | 283 |
Home office expenses |  |  | 9,262 |  |  |  | 9,071 |  |  |  | 8,114 |  |  |  | 9,476 |  |  |  | 10,156 |  |  |  | (680 | ) |  |  | (894 | )
Total G&A expenses |  | $ | 29,548 |  |  | $ | 30,453 |  |  | $ | 28,826 |  |  | $ | 31,454 |  |  | $ | 31,642 |  |  | $ | (188 | ) |  | $ | (2,094 | )

12

|  | Averages and Yields |
|  | YTD 17 |  |  | YTD 16 |
|  | Average Finance Receivables |  |  | Average Yield |  |  | Average Finance Receivables |  |  | Average Yield |
Small loans |  | $ | 346,752 |  |  |  | 42.4 | % |  | $ | 320,806 |  |  |  | 42.3 | %
Large loans |  |  | 246,564 |  |  |  | 28.8 | % |  |  | 166,312 |  |  |  | 28.4 | %
Automobile loans |  |  | 85,580 |  |  |  | 16.5 | % |  |  | 107,463 |  |  |  | 18.1 | %
Retail loans |  |  | 31,569 |  |  |  | 18.8 | % |  |  | 28,494 |  |  |  | 19.1 | %
Total interest and fee yield |  | $ | 710,465 |  |  |  | 33.5 | % |  | $ | 623,075 |  |  |  | 33.3 | %
Total revenue yield |  | $ | 710,465 |  |  |  | 36.9 | % |  | $ | 623,075 |  |  |  | 36.6 | %

|  | Components of Increase in Interest and Fee Income YTD 17 Compared to YTD 16 Increase (Decrease) |
|  | Volume |  |  | Rate |  |  | Volume & Rate |  |  | Net |
Small loans |  | $ | 5,485 |  |  | $ | 192 |  |  | $ | 15 |  |  | $ | 5,692 |
Large loans |  |  | 11,410 |  |  |  | 284 |  |  |  | 137 |  |  |  | 11,831 |
Automobile loans |  |  | (1,975 | ) |  |  | (809 | ) |  |  | 165 |  |  |  | (2,619 | )
Retail loans |  |  | 294 |  |  |  | (41 | ) |  |  | (4 | ) |  |  | 249 |
Product mix |  |  | (643 | ) |  |  | 884 |  |  |  | (241 | ) |  |  | — |
Total increase in interest and fee income |  | $ | 14,571 |  |  | $ | 510 |  |  | $ | 72 |  |  | $ | 15,153 |

|  | Net Loans Originated (1) |
|  | YTD 17 |  |  | YTD 16 |  |  | YTD $ Inc (Dec) |  |  | YTD % Inc (Dec) |
Small loans |  | $ | 275,739 |  |  | $ | 267,426 |  |  | $ | 8,313 |  |  |  | 3.1 | %
Large loans |  |  | 143,791 |  |  |  | 120,743 |  |  |  | 23,048 |  |  |  | 19.1 | %
Automobile loans |  |  | 14,617 |  |  |  | 17,840 |  |  |  | (3,223 | ) |  |  | (18.1 | )%
Retail loans |  |  | 12,617 |  |  |  | 17,328 |  |  |  | (4,711 | ) |  |  | (27.2 | )%
Total net loans originated |  | $ | 446,764 |  |  | $ | 423,337 |  |  | $ | 23,427 |  |  |  | 5.5 | %

(1) | Represents the balance of loan origination and refinancing net of unearned finance charges

|  | Other Key Metrics |
|  | YTD 17 |  |  | YTD 16 |
Net credit losses |  | $ | 36,973 |  |  | $ | 28,429 |
Percentage of average finance receivables (annualized) |  |  | 10.4 | % |  |  | 9.1 | %
Provision for credit losses |  | $ | 37,723 |  |  | $ | 27,177 |
Percentage of average finance receivables (annualized) |  |  | 10.6 | % |  |  | 8.7 | %
Percentage of total revenue |  |  | 28.8 | % |  |  | 23.8 | %
General and administrative expenses |  | $ | 63,096 |  |  | $ | 59,353 |
Percentage of average finance receivables (annualized) |  |  | 17.8 | % |  |  | 19.1 | %
Percentage of total revenue |  |  | 48.1 | % |  |  | 52.1 | %

13