Regional Management Corp. Announces First Quarter 2022 Results

- Net income of $26.8 million and diluted earnings per share of $2.67 -

- 30.8% year-over-year net finance receivables growth and 23.7% year-over-year revenue growth -

- 30+ day contractual delinquencies of 5.7% as of March 31, 2022, an improvement of 30 basis points compared to December 31, 2021 -

GREENVILLE, S.C.--(BUSINESS WIRE)--Regional Management Corp. (NYSE: RM), a diversified consumer finance company, today announced results for the first quarter ended March 31, 2022.

“We produced another set of outstanding financial and operating results in the first quarter,” said Robert W. Beck, President and Chief Executive Officer of Regional Management Corp. “Our strategic growth initiatives enabled us to overcome the normal seasonal portfolio liquidation that typically is the hallmark of the first quarter. We grew our net finance receivables in the quarter to an all-time high of $1.45 billion, up 31% from a year prior. Our portfolio in turn generated record quarterly revenue of $121 million, a year-over-year increase of 24%. We posted net income of $26.8 million and diluted EPS of $2.67, both record highs, with diluted EPS up 16% from the prior-year period. We also delivered robust returns of 7.3% ROA and 36.7% ROE.”

“We continue to experience strong loan demand across all channels, and we remain well-positioned to capture additional market share,” added Mr. Beck. “We expanded our operations to Mississippi in February, and in late March, we began piloting end-to-end digital lending. We are excited to introduce this new lending channel, which allows us to offer our small and large loan products on an entirely digital basis without intervention by our team, from the point of application through loan proceeds distribution. Moving ahead, we are focused on maintaining our strong credit profile and will continue executing on our long-term strategies of digital innovation, geographic expansion, and product and channel development. We look forward to continuing our delivery of profitable growth, sustainable returns, and long-term value to our shareholders.”

First Quarter 2022 Highlights

• Net income for the first quarter of 2022 was a record $26.8 million and diluted earnings per share was a record $2.67, increases of 4.9% and 15.6%, respectively, compared to the prior-year period.
• Net finance receivables as of March 31, 2022 hit an all-time high of $1.4 billion, a record increase of $340.5 million, or 30.8%, from the prior-year period.
  • Large loan net finance receivables of $997.2 million increased $274.8 million, or 38.0%, from the prior-year period and represented 69.0% of the total loan portfolio. Small loan net finance receivables were $438.2 million, an increase of 18.0% from the prior-year period.
  • Branch, digitally sourced, direct mail, and total loan originations were all at record levels for a first quarter.
  • Total loan originations of $326.0 million in the first quarter of 2022, an increase of $91.2 million, or 38.8%, from the prior-year period.
  • Digitally sourced loan originations of $40.3 million in the first quarter of 2022, an increase of $24.2 million, or 150.0%, from the prior-year period.
• Total revenue for the first quarter of 2022 was a record $120.8 million, an increase of $23.1 million, or 23.7%, from the prior-year period.
  • Interest and fee income increased $20.4 million, or 23.3%, primarily due to higher average net finance receivables, partially offset by ongoing credit normalization and the continued mix shift towards large loans.
  • Insurance income, net increased $2.6 million, or 32.0%, driven by an increase in premium revenue associated with portfolio growth.
• Provision for credit losses for the first quarter of 2022 was $30.9 million, an increase of $19.5 million, or 171.6%, from the prior-year period. The provision for credit losses for the first quarter of 2022 included an incremental reserve of $0.6 million primarily for the $20.0 million in sequential portfolio growth and a release of $1.1 million based on the macroeconomic model.
  • Allowance for credit losses was $158.8 million as of March 31, 2022, including a $15.9 million allowance for credit losses reserve associated with potential future macroeconomic impacts on credit losses, inclusive of those associated with the COVID-19 pandemic.
• Annualized net credit losses as a percentage of average net finance receivables for the first quarter of 2022 were 8.7%, a 100 basis point increase compared to 7.7% in the prior-year period but a 200 basis point improvement compared to 10.7% in the first quarter of 2019.
• As of March 31, 2022, 30+ day contractual delinquencies totaled $82.0 million, or 5.7% of net finance receivables, an improvement of 30 basis points compared to December 31, 2021, and a 120 basis point improvement from March 31, 2019. The 30+ day contractual delinquency remains well below the company’s $158.8 million allowance for credit losses as of March 31, 2022.
• The company expanded its operations to the state of Mississippi in the first quarter. In addition, during the first quarter, the company continued its assessment of its legacy branch network and determined to close 20 branches in the second quarter where clear opportunities exist to consolidate operations into a larger branch in close proximity. This branch optimization is consistent with the company’s omni-channel strategy and builds upon the company’s recent successes in entering new states with a lighter branch footprint, while still providing customers with best-in-class service. The company estimates total general and administrative expenses of $1.2 million associated with the branch optimization, of which $0.4 million was incurred in the first quarter and $0.7 million is estimated in the second quarter. The branch optimization will generate approximately $1.8 million in general and administrative expense annual savings, which the company will reinvest in its expansion into new states.
• General and administrative expenses for the first quarter of 2022 were $55.1 million, an increase of $9.3 million, or 20.2%, from the prior-year period due to ongoing investment in personnel, marketing, and digital capabilities to support the company’s growth strategy. General and administrative expenses for the first quarter of 2022 included $0.4 million of expenses related to branch optimization.
• The operating expense ratio (annualized general and administrative expenses as a percentage of average net finance receivables) for the first quarter of 2022 was 15.4%, a 90 basis point improvement compared to the prior-year period. The operating expense ratio was inclusive of a 20 basis point impact related to branch optimization.
• In the first quarter of 2022, the company repurchased 172,776 shares of its common stock at a weighted-average price of $48.76 per share under the company’s $20 million stock repurchase program.

Second Quarter 2022 Dividend

The company’s Board of Directors has declared a dividend of $0.30 per common share for the second quarter of 2022. The dividend will be paid on June 15, 2022 to shareholders of record as of the close of business on May 25, 2022. The declaration and payment of any future dividend is subject to the discretion of the Board of Directors and will depend on a variety of factors, including the company’s financial condition and results of operations.

Liquidity and Capital Resources

As of March 31, 2022, the company had net finance receivables of $1.4 billion and debt of $1.1 billion. The debt consisted of:

• $44.9 million on the company’s $500 million senior revolving credit facility,
• $84.6 million on the company’s aggregate $300 million revolving warehouse
  credit facilities, and
• $1.0 billion through the company’s asset-backed securitizations.

As of March 31, 2022, the company’s unused capacity to fund future growth on its revolving credit facilities (subject to the borrowing base) was $671 million, or 83.9%, and the company had available liquidity of $214.6 million, including unrestricted cash on hand and immediate availability to draw down cash from its revolving credit facilities.

As of March 31, 2022, the company’s fixed-rate debt as a percentage of total debt was 89%, with a weighted-average coupon of 2.9% and an average revolving duration of 2.9 years. The company held interest rate caps with an aggregate notional principal amount of $550 million to manage the risk associated with variable rate debt. The interest rate caps are based on one-month LIBOR and reimburse the company for the difference when one-month LIBOR exceeds the strike rate.

In April 2022, the company sold $300 million of the interest rate cap contracts maturing in 2023 as a result of the significant increases in rates and the value of the interest rate caps. Following the sale, the company continues to maintain $250 million in interest rate cap protection, with one-month LIBOR strike rates between 25 and 50 basis points and maturity dates between February 2024 and February 2026.

The company had a funded debt-to-equity ratio of 3.8 to 1.0 and a stockholders’ equity ratio of 19.9%, each as of March 31, 2022. On a non-GAAP basis, the company had a funded debt-to-tangible equity ratio of 3.9 to 1.0, as of March 31, 2022. Please refer to the reconciliations of non-GAAP measures to comparable GAAP measures included at the end of this press release.

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 [phone] (toll-free) or [phone] (direct). Please dial the number 10 minutes prior to the scheduled start time.

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

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

A webcast replay of the call will be available at www.RegionalManagement.com for one year following the call.

About Regional Management Corp.

Regional Management Corp. (NYSE: RM) is a diversified consumer finance company that provides attractive, easy-to-understand installment loan products primarily to customers with limited access to consumer credit from banks, thrifts, credit card companies, and other lenders. Regional Management operates under the name “Regional Finance” online and in branch locations in 14 states across the United States. Most of its loan products are secured, and each is structured on a fixed-rate, fixed-term basis with fully amortizing equal monthly installment payments, repayable at any time without penalty. Regional Management sources loans through its multiple channel platform, which includes branches, centrally managed direct mail campaigns, digital partners, retailers, and its consumer website. For more information, please visit www.RegionalManagement.com.

Forward-Looking Statements

This press release may contain various “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical fact but instead represent Regional Management Corp.’s expectations or beliefs concerning future events. Forward-looking statements include, without limitation, statements concerning financial outlooks or future plans, objectives, goals, projections, strategies, events, or performance, and underlying assumptions and other statements related thereto. 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 speak only as of the date on which they were made and are about matters that are inherently subject to risks and uncertainties, many of which are outside of the control of Regional Management. As a result, actual performance and results may differ materially from those contemplated by these forward-looking statements. Therefore, investors should not place undue reliance on forward-looking statements.

Factors that could cause actual results or performance to differ from the expectations expressed or implied in forward-looking statements include, but are not limited to, the following: risks related to Regional Management’s business, including the COVID-19 pandemic and its impact on Regional Management’s operations and financial condition; managing growth effectively, implementing Regional Management’s growth strategy, and opening new branches as planned; Regional Management’s convenience check strategy; Regional Management’s policies and procedures for underwriting, processing, and servicing loans; Regional Management’s ability to collect on its loan portfolio; Regional Management’s insurance operations; exposure to credit risk and repayment risk, which risks may increase in light of adverse or recessionary economic conditions; the implementation of new underwriting models and processes, including as to the effectiveness of new custom scorecards; changes in the competitive environment in which Regional Management operates or a decrease in the demand for its products; the geographic concentration of Regional Management’s loan portfolio; the failure of third-party service providers, including those providing information technology products; changes in economic conditions in the markets Regional Management serves, including levels of unemployment and bankruptcies; the ability to achieve successful acquisitions and strategic alliances; the ability to make technological improvements as quickly as competitors; security breaches, cyber-attacks, failures in information systems, or fraudulent activity; the ability to originate loans; reliance on information technology resources and providers, including the risk of prolonged system outages; changes in current revenue and expense trends, including trends affecting delinquencies and credit losses; changes in operating and administrative expenses; the departure, transition, or replacement of key personnel; the ability to timely and effectively implement, transition to, and maintain the necessary information technology systems, infrastructure, processes, and controls to support Regional Management’s operations and initiatives; changes in interest rates; existing sources of liquidity may become insufficient or access to these sources may become unexpectedly restricted; exposure to financial risk due to asset-backed securitization transactions; risks related to regulation and legal proceedings, including changes in laws or regulations or in the interpretation or enforcement of laws or regulations; changes in accounting standards, rules, and interpretations and the failure of related assumptions and estimates, including those associated with CECL accounting; the impact of changes in tax laws, guidance, and interpretations, including the timing and amount of revenues that may be recognized; risks related to the ownership of Regional Management’s common stock, including volatility in the market price of shares of Regional Management’s common stock; the timing and amount of future cash dividend payments; and anti-takeover provisions in Regional Management’s charter documents and applicable state law. The COVID-19 pandemic may also magnify many of these risks and uncertainties.

The foregoing factors and others are discussed in greater detail in Regional Management’s filings with the Securities and Exchange Commission. Regional Management will not update or revise forward-looking statements to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events or the non-occurrence of anticipated events, whether as a result of new information, future developments, or otherwise, except as required by law. Regional Management is not responsible for changes made to this document by wire services or Internet services.

Regional Management Corp. and Subsidiaries
Consolidated Statements of Income
(Unaudited)
(dollars in thousands, except per share amounts)

							Better (Worse)
	1Q 22			1Q 21			$			%
Revenue
Interest and fee income	$	107,631		$	87,279		$	20,352			23.3	%
Insurance income, net		10,544			7,985			2,559			32.0	%
Other income		2,673			2,467			206			8.4	%
Total revenue		120,848			97,731			23,117			23.7	%
Expenses
Provision for credit losses		30,858			11,362			(19,496	)		(171.6	)%
Personnel		35,654			28,851			(6,803	)		(23.6	)%
Occupancy		5,808			6,020			212			3.5	%
Marketing		3,091			2,710			(381	)		(14.1	)%
Other		10,547			8,262			(2,285	)		(27.7	)%
Total general and administrative		55,100			45,843			(9,257	)		(20.2	)%
Interest expense		(59	)		7,135			7,194			100.8	%
Income before income taxes		34,949			33,391			1,558			4.7	%
Income taxes		8,166			7,869			(297	)		(3.8	)%
Net income	$	26,783		$	25,522		$	1,261			4.9	%
Net income per common share:
Basic	$	2.81		$	2.42		$	0.39			16.1	%
Diluted	$	2.67		$	2.31		$	0.36			15.6	%
Weighted-average common shares outstanding:
Basic		9,533			10,543			1,010			9.6	%
Diluted		10,022			11,066			1,044			9.4	%
Return on average assets (annualized)		7.3	%		9.3	%
Return on average equity (annualized)		36.7	%		36.7	%

Regional Management Corp. and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
(dollars in thousands, except par value amounts)

							Increase (Decrease)
	1Q 22			1Q 21			$			%
Assets
Cash	$	17,635		$	7,226		$	10,409			144.0	%
Net finance receivables		1,446,071			1,105,603			340,468			30.8	%
Unearned insurance premiums		(47,075	)		(34,751	)		(12,324	)		(35.5	)%
Allowance for credit losses		(158,800	)		(139,600	)		(19,200	)		(13.8	)%
Net finance receivables, less unearned insurance premiums and allowance for credit losses		1,240,196			931,252			308,944			33.2	%
Restricted cash		138,919			79,012			59,907			75.8	%
Lease assets		28,087			27,652			435			1.6	%
Deferred tax assets, net		18,093			14,366			3,727			25.9	%
Property and equipment		13,036			13,046			(10	)		(0.1	)%
Intangible assets		9,475			8,926			549			6.2	%
Other assets		32,230			16,815			15,415			91.7	%
Total assets	$	1,497,671		$	1,098,295		$	399,376			36.4	%
Liabilities and Stockholders’ Equity
Liabilities:
Debt	$	1,134,377		$	752,200		$	382,177			50.8	%
Unamortized debt issuance costs		(12,001	)		(8,196	)		(3,805	)		(46.4	)%
Net debt		1,122,376			744,004			378,372			50.9	%
Accounts payable and accrued expenses		46,302			40,943			5,359			13.1	%
Lease liabilities		30,251			29,712			539			1.8	%
Total liabilities		1,198,929			814,659			384,270			47.2	%
Stockholders’ equity:
Preferred stock ($0.10 par value, 100,000 shares authorized, none issued or outstanding)		—			—			—			—
Common stock ($0.10 par value, 1,000,000 shares authorized, 14,360 shares issued and 9,806 shares outstanding at March 31, 2022 and 14,063 shares issued and 10,792 shares outstanding at March 31, 2021)		1,436			1,406			30			2.1	%
Additional paid-in capital		105,989			105,493			496			0.5	%
Retained earnings		329,878			250,659			79,219			31.6	%
Treasury stock (4,554 shares at March 31, 2022 and 3,271 shares at March 31, 2021)		(138,561	)		(73,922	)		(64,639	)		(87.4	)%
Total stockholders’ equity		298,742			283,636			15,106			5.3	%
Total liabilities and stockholders’ equity	$	1,497,671		$	1,098,295		$	399,376			36.4	%

Regional Management Corp. and Subsidiaries
Selected Financial Data
(Unaudited)
(dollars in thousands, except per share amounts)

	Net Finance Receivables by Product
	1Q 22		4Q 21		QoQ $ Inc (Dec)			QoQ % Inc (Dec)			1Q 21		YoY $ Inc (Dec)			YoY % Inc (Dec)
Small loans	$	438,153	$	445,023	$	(6,870	)		(1.5	)%	$	371,188	$	66,965			18.0	%
Large loans		997,226		970,694		26,532			2.7	%		722,474		274,752			38.0	%
Retail loans		10,692		10,540		152			1.4	%		11,941		(1,249	)		(10.5	)%
Total net finance receivables	$	1,446,071	$	1,426,257	$	19,814			1.4	%	$	1,105,603	$	340,468			30.8	%
Number of branches at period end		354		350		4			1.1	%		365		(11	)		(3.0	)%
Net finance receivables per branch	$	4,085	$	4,075	$	10			0.2	%	$	3,029	$	1,056			34.9	%

	Averages and Yields
	1Q 22					4Q 21					1Q 21
	Average Net Finance Receivables		Average Yield (1)			Average Net Finance Receivables		Average Yield (1)			Average Net Finance Receivables		Average Yield (1)
Small loans	$	440,936		36.0	%	$	427,586		38.1	%	$	389,138		37.5	%
Large loans		982,881		27.5	%		925,226		28.5	%		721,052		27.9	%
Retail loans		10,620		18.4	%		10,435		18.7	%		13,170		17.8	%
Total interest and fee yield	$	1,434,437		30.0	%	$	1,363,247		31.4	%	$	1,123,360		31.1	%
Total revenue yield	$	1,434,437		33.7	%	$	1,363,247		35.1	%	$	1,123,360		34.8	%

(1)	Annualized interest and fee income as a percentage of average net finance receivables.

	Components of Increase in Interest and Fee Income
	1Q 22 Compared to 1Q 21
	Increase (Decrease)
	Volume			Rate			Volume & Rate			Total
Small loans	$	4,851		$	(1,447	)	$	(192	)	$	3,212
Large loans		18,246			(740	)		(268	)		17,238
Retail loans		(113	)		19			(4	)		(98	)
Product mix		1,185			(821	)		(364	)		—
Total increase in interest and fee income	$	24,169		$	(2,989	)	$	(828	)	$	20,352

	Loans Originated (1)
	1Q 22		4Q 21		QoQ $ Inc (Dec)			QoQ % Inc (Dec)			1Q 21		YoY $ Inc (Dec)		YoY % Inc (Dec)
Small loans	$	137,131	$	175,898	$	(38,767	)		(22.0	)%	$	101,741	$	35,390		34.8	%
Large loans		186,279		255,828		(69,549	)		(27.2	)%		131,325		54,954		41.8	%
Retail loans		2,590		2,630		(40	)		(1.5	)%		1,780		810		45.5	%
Total loans originated	$	326,000	$	434,356	$	(108,356	)		(24.9	)%	$	234,846	$	91,154		38.8	%

(1)	Represents the principal balance of loan originations and refinancings.

	Other Key Metrics
	1Q 22			4Q 21			1Q 21
Net credit losses	$	31,358		$	21,808		$	21,762
Percentage of average net finance receivables (annualized)		8.7	%		6.4	%		7.7	%
Provision for credit losses (1)	$	30,858		$	31,008		$	11,362
Percentage of average net finance receivables (annualized)		8.6	%		9.1	%		4.0	%
Percentage of total revenue		25.5	%		26.0	%		11.6	%
General and administrative expenses	$	55,100		$	55,532		$	45,843
Percentage of average net finance receivables (annualized)		15.4	%		16.3	%		16.3	%
Percentage of total revenue		45.6	%		46.5	%		46.9	%
Same store results (2):
Net finance receivables at period-end	$	1,406,904		$	1,400,817		$	1,100,840
Net finance receivable growth rate		27.3	%		23.3	%		0.2	%
Number of branches in calculation		331			330			356

(1)	Includes macroeconomic impacts to provision for credit losses of $(1,100), $(1,100), and $(6,600) for 1Q 22, 4Q 21, and 1Q 21, respectively.
(2)	Same store sales reflect the change in year-over-year sales for the comparable branch base. The comparable branch base includes those branches open for at least one year.

	Contractual Delinquency by Aging
	1Q 22				4Q 21				1Q 21
Allowance for credit losses (1)	$	158,800	11.0	%	$	159,300	11.2	%	$	139,600	12.6	%
Current		1,268,367	87.7	%		1,237,165	86.7	%		1,010,859	91.4	%
1 to 29 days past due		95,689	6.6	%		104,201	7.3	%		47,024	4.3	%
Delinquent accounts:
30 to 59 days		19,818	1.4	%		25,283	1.9	%		11,252	1.0	%
60 to 89 days		16,390	1.1	%		20,395	1.4	%		9,808	0.9	%
90 to 119 days		15,636	1.1	%		15,962	1.0	%		8,682	0.8	%
120 to 149 days		15,322	1.1	%		12,466	0.9	%		8,717	0.8	%
150 to 179 days		14,849	1.0	%		10,785	0.8	%		9,261	0.8	%
Total contractual delinquency	$	82,015	5.7	%	$	84,891	6.0	%	$	47,720	4.3	%
Total net finance receivables	$	1,446,071	100.0	%	$	1,426,257	100.0	%	$	1,105,603	100.0	%
1 day and over past due	$	177,704	12.3	%	$	189,092	13.3	%	$	94,744	8.6	%

	Contractual Delinquency by Product
	1Q 22				4Q 21				1Q 21
Small loans	$	34,861	8.0	%	$	39,794	8.9	%	$	22,582	6.1	%
Large loans		46,375	4.7	%		44,348	4.6	%		24,404	3.4	%
Retail loans		779	7.3	%		749	7.1	%		734	6.1	%
Total contractual delinquency	$	82,015	5.7	%	$	84,891	6.0	%	$	47,720	4.3	%

(1)	Includes macroeconomic allowance for credit losses of $15,900, $17,000, and $26,400 in 1Q 22, 4Q 21, and 1Q 21, respectively.

	Income Statement Quarterly Trend
	1Q 21		2Q 21		3Q 21		4Q 21		1Q 22			QoQ $ B(W)			YoY $ B(W)
Revenue
Interest and fee income	$	87,279	$	88,793	$	99,355	$	107,117	$	107,631		$	514		$	20,352
Insurance income, net		7,985		8,656		9,418		9,423		10,544			1,121			2,559
Other income		2,467		2,227		2,687		2,944		2,673			(271	)		206
Total revenue		97,731		99,676		111,460		119,484		120,848			1,364			23,117
Expenses
Provision for credit losses		11,362		20,549		26,096		31,008		30,858			150			(19,496	)
Personnel		28,851		28,370		29,299		33,313		35,654			(2,341	)		(6,803	)
Occupancy		6,020		5,568		6,027		6,511		5,808			703			212
Marketing		2,710		4,776		2,488		4,431		3,091			1,340			(381	)
Other		8,262		7,675		9,936		11,277		10,547			730			(2,285	)
Total general and administrative		45,843		46,389		47,750		55,532		55,100			432			(9,257	)
Interest expense		7,135		7,801		8,816		7,597		(59	)		7,656			7,194
Income before income taxes		33,391		24,937		28,798		25,347		34,949			9,602			1,558
Income taxes		7,869		4,771		6,577		4,569		8,166			(3,597	)		(297	)
Net income	$	25,522	$	20,166	$	22,221	$	20,778	$	26,783		$	6,005		$	1,261
Net income per common share:
Basic	$	2.42	$	1.98	$	2.25	$	2.18	$	2.81		$	0.63		$	0.39
Diluted	$	2.31	$	1.87	$	2.11	$	2.04	$	2.67		$	0.63		$	0.36
Weighted-average shares outstanding:
Basic		10,543		10,200		9,861		9,545		9,533			12			1,010
Diluted		11,066		10,797		10,544		10,177		10,022			155			1,044
Net interest margin	$	90,596	$	91,875	$	102,644	$	111,887	$	120,907		$	9,020		$	30,311
Net credit margin	$	79,234	$	71,326	$	76,548	$	80,879	$	90,049		$	9,170		$	10,815

	Balance Sheet Quarterly Trend
	1Q 21		2Q 21		3Q 21		4Q 21		1Q 22		QoQ $ Inc (Dec)			YoY $ Inc (Dec)
Total assets	$	1,098,295	$	1,191,305	$	1,313,558	$	1,459,662	$	1,497,671	$	38,009		$	399,376
Net finance receivables	$	1,105,603	$	1,183,387	$	1,314,233	$	1,426,257	$	1,446,071	$	19,814		$	340,468
Allowance for credit losses	$	139,600	$	139,400	$	150,100	$	159,300	$	158,800	$	(500	)	$	19,200
Debt	$	752,200	$	853,067	$	978,803	$	1,107,953	$	1,134,377	$	26,424		$	382,177

	Other Key Metrics Quarterly Trend
	1Q 21			2Q 21			3Q 21			4Q 21			1Q 22			QoQ Inc (Dec)			YoY Inc (Dec)
Interest and fee yield (annualized)		31.1	%		31.6	%		32.0	%		31.4	%		30.0	%		(1.4	)%		(1.1	)%
Efficiency ratio (1)		46.9	%		46.5	%		42.8	%		46.5	%		45.6	%		(0.9	)%		(1.3	)%
Operating expense ratio (2)		16.3	%		16.5	%		15.4	%		16.3	%		15.4	%		(0.9	)%		(0.9	)%
30+ contractual delinquency		4.3	%		3.6	%		4.7	%		6.0	%		5.7	%		(0.3	)%		1.4	%
Net credit loss ratio (3)		7.7	%		7.4	%		5.0	%		6.4	%		8.7	%		2.3	%		1.0	%
Book value per share	$	26.28		$	26.93		$	27.73		$	28.89		$	30.47		$	1.58		$	4.19

(1)	General and administrative expenses as a percentage of total revenue.
(2)	Annualized general and administrative expenses as a percentage of average net finance receivables.
(3)	Annualized net credit losses as a percentage of average net finance receivables.

Non-GAAP Financial Measures

In addition to financial measures presented in accordance with generally accepted accounting principles (“GAAP”), this press release contains certain non-GAAP financial measures. The company’s management utilizes non-GAAP measures as additional metrics to aid in, and enhance, its understanding of the company’s financial results. Tangible equity and funded debt-to-tangible equity ratio are non-GAAP measures that adjust GAAP measures to exclude intangible assets. Management uses these equity measures to evaluate and manage the company’s capital and leverage position. The company also believes that these equity measures are commonly used in the financial services industry and provide useful information to users of the company’s financial statements in the evaluation of its capital and leverage position.

This non-GAAP financial information should be considered in addition to, not as a substitute for or superior to, measures of financial performance prepared in accordance with GAAP. In addition, the company’s non-GAAP measures may not be comparable to similarly titled non-GAAP measures of other companies. The following tables provide a reconciliation of GAAP measures to non-GAAP measures.

	1Q 22
Debt	$	1,134,377
Total stockholders' equity		298,742
Less: Intangible assets		9,475
Tangible equity (non-GAAP)	$	289,267
Funded debt-to-equity ratio		3.8	x
Funded debt-to-tangible equity ratio (non-GAAP)		3.9	x