RM - Earnings call transcript Q2 2024 | Regional Management Corp.

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Operator

Ladies and gentlemen, greetings, and welcome to the Regional Management Second Quarter 2024 Earnings Conference Call. [Operator Instructions] A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Garrett Edson, ICR. Please go ahead.

Garrett Edson

Thank you, and good afternoon. website have were our call released be on should supplemental announcement and everyone found which presentation, prior our now, access earnings to and may By regionalmanagement.com. at to this

presentation President the Management earnings comparable introduce Rob measures or can to GAAP our of discussion of release, forward-looking within and regionalmanagement.com. I posted X to speak and all current statements include our not today and our of begin discussion management's a future our measures. as based to these our estimates contains or expressed upon will earnings business detailed financial to to guarantees reliance presentation, would remarks, and difficult may cause are Before CEO the Regional of and impact forward-looking filings performance use include prospects. you website not the and differ and projections in are them. We press about of risks, concerning of references implied should at results on and announcement future more assumptions, today place we condition. supplemental uncertainties results forward-looking formal to most our disclosures like These therefore, of Part measures may Also, statements, other be certain statements. subject materially and forward-looking the the SEC and are from direct which predict These that statements that financial discussion refer I non-GAAP statements recent on company's expectations, Beck, measures. you of today Corp. Page to are now could with Reconciliation our to for our and future only important financial which those performance, risks non-GAAP could and our factors statements presentation found forward-looking uncertainties of that various and undue you actual operating the

Robert Beck

call, our second balance and of Harp results quarter I'm quarter Financial cover we'll with results. our joined the of billion X% to welcome and this diluted pleased the year. $XX XXXX and today expectations our $X.X year. We're call. very or from the portfolio by in $X.X up quarter second financial EPS. Chief second for our On million Rana, Garrett, year-to-date and million of income Thanks, sequentially $X.XX prior our We We quarter, net earnings delivered share in our grew operating Officer. quarterly the by the to

a of revenue of Our total from combination basis growth portfolio improved increased and our year-over-year higher-margin pricing, small yield points loan performance. increased XX credit

portfolio and larger quarter, G&A same time, stronger to investing expense growth still drive Our last second initiatives. up we've tight to combined from the grip $XXX year. revenue At X% revenue our while and million in a in strategic on the total maintained yield

will portfolio's quarter with our that as the first the continue We're growth performance net appear these as income X.Xx. last Recent somewhat. benefits data levels market workers while softening disproportionately quality to the job has market that second inflation to half credit higher of about carefully for bring economic been strong lower customers. will outpaced we year. Along revenue to believe labor appears quarter openings and line drove our second compared and impact cooling Together, the mixed Our year-over-year by to credit outcomes up XX% our fungible optimistic growth is our to income we inflation G&A manage results, strong and remain be labor item our somewhat customers softening expense our performance.

positive additional growth while our awaiting maintain to underwriting However, and conservative trajectory we posture economic data. plan

want product to the as and receivables net to in net mix a X.X%, our to the to to implications receivables credit shift yield, full-year downstream of take be we minute up of year. I product half XXXX, indicators. key in X% how mix with performance about discuss ending think average losses strategically second X% a and net other weighted the to grow expect We roughly growth by will

that and competitors have large small with X or small large loans the We installment space APRs XX% loan not products; use as loans. primary offering loan We and the advantage most dual our large a space with us over of provides believe including but loans, small both. in and our competitive operate

positioned improve. uniquely profiles to our wider a we're of result, evolve to a and their access loan needs set adjust customers credit customers to as to and As offerings credit offer our

We credit to large loan have customers counterparts. their small have loan experience who weaker typically deep lending profiles than

with risk yields, small APR. to demand loan Highly in are credit We're qualified XX.X% small and by while comes loan loans smaller graduate fewer for we're have provide APRs to able who a comfortable our loan smaller to strong Many of access driving size credit. because credit averaged customers. the loan within industry. Continuing credit due higher and credit APR and to margins. improved loans the offer essential to customers yields qualifying tightening consumers increased are the as product lower establishing access to this a their to qualifying our the large them for wouldn't this credit and to payment Our credit greater, currently may to increased otherwise us profiles because with segment of be consumers profile responsible at lending risk sub-XX% is ultimately history also

average as decrease refinanced well XX%. to satisfaction improved as high in year, loans retention and our over in example, receivables, has nearly customer into time. small performance their For XX,XXX large credit customers' strategy resulted million XX% in $XXX This we loans, from representing resulting of finance APR last a in

natural of permits a license As as rates state there grow at portfolio not every large XX%. loan may state our how a is lender, lending limit above to small

attractive lending small lending. geographically entered loan states expanded many we years, loan make more As than recent limitations rate interest large in we've where

volatile in caused economic higher be addition, become challenged deteriorate, than In performance began loan XXXX consumers. more credit and we credit performance beginning own large consumers to small lending more for as tends inflation constrained to late conditions to whose

introduced a also our product. life and price for subset of large The lowest our quality as allowing reserved auto us cycle. product a is auto-secured our the loan products, consumers, We extend collateral customers' of auto-secured highest product requires broader is our to new

important and a in business customers, new of financial APRs loan feeder loan a plays a result rapidly small our products our loans, large in portfolio. the portfolio introductory of business role more small for large creating XX%. very of our these one It's results. loan our our Despite for greater As loans dynamics, portfolio portfolio grew large our growth our with than than

our the and portfolio's line yields costs, it cash higher addition, carries flows. greater In despite loan small strong margins, credit benefiting very and returns and bottom risk servicing

competitive and observations evolve and to Our also portfolio a levers returns. Ultimately, consumer how large line our us impact on costs, including and product pull strong of meet we we provides regulatory balancing credit and small that will generate build that yields can hurdles and nuances appropriately way state products bottom seek the credit our margins these grow returns. in risk performance, factors while and our to return expectations loans we increased customers. with dynamics, segments our growth offering relative recently, Which including funding of the many may an health, environment, economic factors, growth loans, portfolio. future the environment, greater our More of needs in auto-secured collection economic light our lever in pull multiple and moderating expectations and for of high-margin meeting of our of and of XX% improving than small loans maximize the outcomes our APR depends loan inflation we've

As the by has we year. the year-over-year, at million XX% small our this year. portfolio loan portfolio last our result, $XX growth come or of the more grew XX% growth this of anticipated more over portfolio outset a We the year representing product than from of than

greater with of Our to time portfolio from over period. total grew XX% the APR, XX% of same XX% than that portfolio loans

the portfolio has performing very also larger associated are with up As high-quality customers of these payment we're our have these the this portfolio June products. with is at bulk more highly business, consistent high-margin have large the and of onboard as loan that and of in the to of the a product strong last loan portfolio, graduate small products and economic applicants million, to our data our to lowest have our recent retain the we quarter a of end to second $XXX and small rate of of moderately loan and strong small all a risk credit. These credit of barbell lower seeing XX, in XX.X% with continue the The qualified now rate on end consumers X.X% large box, multiple losses competitors from drop feel of grow portfolio strategy demonstrate loans. The year. in given over credit auto-secured the delinquency their quarter able our improve This loans. to auto-secured expansion from demand deploy resulting quarters loan as loan margins amounts of and conditions to small loan X.X% as We day performance. ultimately originating lower thoughtfully at who access comfortable experienced customers tightened the high-margin larger, growth into opportunity we to continuing the XX-plus we're representing of increased time well

of markets our and to continue healthy generate loans point growth. auto-secured will focal be a Our

and performance, carrying in particularly in our of indicators. Mark various costs, as APRs I benefit second basis, points has yield portfolio performance loan to portfolio XXXX, adjustment G&A a funding small fee helped credit creating the the negatively XX.X%, the XX.X% quarter expense than benefited benefits to greater will a for to credit average have to funding performance, increased and the from on however, of product to increases and product, fee net key credit greater portfolio In the at On our our period. Conversely, and collection basis yield shift second shift up discuss intensity XX% implications the and our was the expense compared in G&A the slightly prior margin net marginally As with and The APR our improved product overall the line. up XXX loans portfolio bottom the mix the to our APRs detail, impacts prior total year year APR to in a origination support of for requires greater the small interest and overall Along has our yield. exceeds drive the loans in subset our our drag performance, costs. to mix expected, emphasis quarter period. higher interest

credit to Turning performance.

rate our year to flat June and XX-plus of sequentially better points at remained XX, the basis day delinquency XX stable As prior X.X%, period.

product to continues our Our net improved a in points of from higher yield as makes rates portfolio drove basis line of of that roughly the and XX second rate portfolio. very prior book points points with when and our year to loss quarter. rate a it's basis portion in small up the delinquency additional estimate as incremental larger XX in our basis front perform loan compared the trade But total incremental good credit We the the growth XX NCL the generates. expectations discussed,

fall environment. will and we've book we the the however, to our high-margin on to macroeconomic As continue improvement the originations as business of underwriting year our growth said small new The loan will, as the impacted slope in X% half as tighter somewhat rate portfolio continued well second maintain of previously, our credit to NCL back of by declined the XX% in by year-end. be

remains lingering conditions, the and of effects economists or energy meeting at everyday to start rent base, and had at of of that the have persistently customer high the as the we necessities elevated. Economic pace not continued particularly most the as since inflation such food, aggregate predicted our inflation, improving while XXXX cost remains view Our year. strain improved

to loan rates roll improving points We basis growth effects our due XX loan we're XX.X% pace light likewise elevated small year incremental XX in of basis to is rates rate of rate points due points the our due additional NCL of XX.X%. conditions. NCL increasing our The this receivables, slower are average small In they improvement. in a another of NCL the though growth rate is economic roughly to net conditions of of which the macro to remain to is inflation, remaining the the growth itself portfolio and Our roll full that denominator basis guidance portfolio, estimate in to our XX of consequence higher-margin lingering attributable incremental and is slower economic elevated high-margin effect business.

generates. margins that and given the discussed, it's stronger the portfolio excellent bottom However, as line an returns trade

in offset to first the reversals XX With income rate guidance of our credit to second ramp half future. drive is up credit the reflect net strategies lower have XX first drive in done up rate yields resources mix performance, the on of we've our the up and NCL economic to to the credit These Despite for million also investment analytics levers by manage XX XXXX. year total $XX customers year. in which of higher also of impact to while open efforts improve full guidance in us to position XX.X% basis our points $X million. business, and results in loan by continue shift line growth We'll further expense in carefully increase the portfolio to revenue part revenue and half the adjusting second normalization. Of year spend while investment our note We've company's success. We're G&A still our particular in portfolio. guidance guidance XXXX. the improving, in to future on challenge XX.X%, net million We'll second in full-year we're face and in expense strong new continued future various increasing rate lowering will by inflation year-over-year pulling increase in to to losses the so EPS of and data G&A increase we're exceeded million the our an our incremental for expectations in $XX introducing in quarters. strong continues expenses, to bottom the volume expense management that, yield environment half higher net slow driving investment for also XXXX, productivity and Despite XXXX, small technology our from to the revenue the on the to freed investing in our roughly $XXX of branches, income to full tight

through in discussed macroeconomic assets on with long we and mix, stable return equity targeting X% the of a the growth a a a return term, and of portfolio past, on sales benefits further over As of product XX%. the well-balanced we're environment,

take sheet on executing returns business. funding focus will in to While manage targets, time these are continue these expense if our a strong it profile achievable reach disciplined and maintain believe are growth, our prudently we balance and our core we on base, our

As and continued into journey a XXXX, the to rest higher continued revenue and in yield and driven steady to economic make ahead growth on efficiencies even better expect performance continued face year we operating of expansion, rates. headwinds incrementally through inflation look credit interest of progress focus generating we the portfolio by back this assuming from normalized returns, outlook from and the on a leverage

consumer call that conditions our be commitment. I'll more to team's impressed to been challenging valuable years, quarter for managed products superior financial to couple thank their the through and skillfully while particularly to The for I'd preparing Harp, regional provide I dedication customer now and work, base. like a and always, over to our have providing XXXX. who for past second results anticipating, turn talent economic team of customers has our over detail services environment guidance reacting additional As the the team and item hard on difficult line continue by will service. the for and

Harpreet Rana

in we second Thank you through and more outlook supplemental financial with you, the take XXXX. quarter Rob, quarter you updated quarter and detail hello, for of On our an provide everyone. provide X third I'll highlights. our Page second now presentation, full-year results and

million quarter of last earnings of strong from revenue expense solid quarter share per these posted year. growth of generated $X.XX, another income we through results of second XX% noted, diluted Rob the We and up and discipline. $X.X net As

We robust sheet also healthy well and continue as a balance to as maintain reserves. loss a profile strong loan credit

emphasis increasing segments. all loan respectively. Originations underwriting X% and credit originations Page increase growth. with year-over-year, on demand X% up with contributing a to XX%, We a to the and remain level marketing margin loan comfortable branch over of in more prioritizing cautious quality channels digital, Total an accounts. maintained direct mail originations high to Turning margin increased and time, by we X. customer in this aggressive approach a our we At X% though higher observed in X%, were quarter,

highly billion, towards with result, We of of the originations in picked the we $XX the finance credit receivables mix quarter. $X.X million quarter the as remain portfolio net As from X in expect tight and second displays end up least closed prior the end making to product selective expected. a within the quarter loans quarter through our up as box near at term. Page our growth

end comprised below XX% total portfolio a second quarter, XX%, As XX% the at from APR year down or our and of of ago. portfolio book the of an loan our of XX% large carried our

into portfolio Rob growth loans hurdles As a our higher discussed, we costs revenue and offset particular expect exceed recent despite to drives book higher in return This quarters. in in leaned way segments. measured our these on future small funding we purposely loan which yields, growing net of higher expected losses continue small credit higher-margin and moderately quarters

to enter to Looking since for now ahead, borrowers XXXX, seasonally of by demand addressable take XX% selective to underwriting having criteria. have under market expanded remaining drive X quality quarter conservative we growth, while new and having more we more By high than levels our strong improving our increased originations. states advantage consumer ample portfolio a and of opportunity

sequentially $XX average of up net September driving million. roughly We third quarter receivables to expect ending XX, the for our by receivables approximately by net as increase million $XX

margins or impact would of focus growth, quickly back Depending on we and upon originating can into either conditions, our bottom to As which in underwriting lean always, we'll receivables maximize economy loans growth our results. the quarter. market tighten continue line the and monitor that

Turning year Page $XXX second Total the up to prior quarter, X. X% revenue to the in grew million period. from

and basis field due points roughly performance. was up XX.X% small fee better and third revenue down were basis expect than increase credit our in and in to total yield. revenue pricing XX and quarter, yield revenue XX.X%, total increases, yield initial our revenue Our sequential interest higher-margin was expectations. Year-over-year, total improved yield growth XX In XX the basis a respectively. Sequentially, we our portfolio total loan points, point

Moving to Page X.

roughly Though in were higher growth the in credit expectations. portfolio. credit was net performance and our our impacted delinquency losses line Rob by naturally our with discussed, Our rate as

as XX-plus in point improvement XX Our loan was portfolio. day the it where stood end and delinquency X.X%, rate of basis growth at our small higher-margin with of XXXX, the despite quarter-end comparable a second of quarter the sequentially

Our losses basis in net and better of $XX.X loss of line outlook than credit points our was year. roughly XX.X% net million rate annualized with XX credit were our last

the we as to We expect total decline XX% despite at the throughout back back only book the The for our back of of XX-plus book of front that of our accounted XX% rate year reducing at X.X% book our back additional XX% book. The day the of the portfolio front portfolio. Page book carries quarter-end. continue our first to of delinquency quarter. ended The end rate information the quarter book the on the portfolio. XX% and compared on compared delinquency X.X% NCL a X book representing balance provides front performance at will book our

rates and XX% back reserve book respectively. were XX.X%, front and Our book

third higher book at in Compared which performing. benefit our front seeing seasonal our our to In back book in loss We level season book, growth continue our slightly in credit rise quarter, Overall, the XXXX continues with despite patterns. delinquency our the should to to with lower prudent of underwriting our metrics. rate results. the we business, line pleased expect small benefit way rate to we're the the is the a that front loan of be

approximately the the addition, book the anticipate down million second $XX.X In that as continues losses be from third back our in in quarter we net will diminish. credit quarter, $XX.X to million

Turning to Page XX.

for improved reserve credit quality with portfolio to credit losses points of future quarter macroeconomic rate our outlook, the basis by improving XX.X%, prior Our allowance declined conditions. for our XX second expectations and consistent

quarter-end, unemployment XXXX As and X.X%. allowance $XXX of was the a assumed of million year-end rate

as loan ahead, require will receivables Looking provisioning a for higher markets. reminder, higher growth second half

in a loss is will provisioning While lead performance for stronger near-term on loan growth it XXXX. to earnings, drag

We subject loan the XX.X% flat at improved performance. economic expect third end remain XX.X% our conditions quarter, to of to and reserve rate at loss the to or portfolio slightly

to lingering higher-margin addition, we're our increased our loss XXXX initiatives. capabilities impacted XX, to narrowing inflation, manage and impacts our our in Beryl, we In continue spending reserve guidance to rate XX.X% the and Texas particularly Hurricane growth Houston effects loan year-end the loan in business, business still of Page small to reflecting investing of area. Flipping XX.X%, strategic closely in which our while

second in were million Our better expense. due expenses our G&A personnel outlook to the than part management in of $XX.X quarter of aggressive our

Our ratio received XX period insurance third annualized to incentive G&A expense investments in was Xx. In $XX.X expense in the points we due and to towards an quarter associated growth of equity expect growth which growth quarter, year with to half in seasonality strategic sequential our last of revenue expense outpaced Meanwhile, year initiatives nearly timing than the the higher basis XX.X% our to second second by year. expenses our operating grants. well weighted and second settlement plans, of the G&A quarter, are the in timing our The roughly as as million. attributable the the be is increase of expenses prior due

new market portfolio is higher to XX and our a year drive opportunity service accounts. number branches the where this there to Our growth and expenses loan opening include newer of in originations investments untapped expansion states new drive large

in We benefit performance. continue also initiatives invest data and future to to technology

success meticulously while our ensures profitability. manage time improves long-term over and a efficiency to way our operating also that continue core investing in our expenses, in Moving business forward, we'll and

XX. Turning to XX and Pages

our rates. our Our securitization X-year expense market, average of the stable net better was X through of with the thanks of a rate completing and interest transaction of revolving or million quarters, as asset-backed re-entered net average weighted outlook for receivables debt a second the issued quarter, on at for interest lower to average second percentage debt coupon quarter X% the a average period We've than expense lower basis, receivables X.X%. on experienced ABS In $XX.X X% program. we fixed annualized million a past an $XXX

notes DBRS, from top interest A we strong S&P of Class rating a and in and AAA received Our had investor deal. the

Given very have transaction. borrowing liquidity to for market capacity, for to most pleased our were when the results us. we significant the with We and go flexibility advantageous the conditions of ABS this latest

As or with revolving be of of June weighted debt $XX.X XX% X.X% our of expense net we million XX, weighted to of a coupon a fixed interest average X.X the average is receivables. expect rate third In and approximately X.X% duration average of years. quarter,

the approximately rate funds X.X%. full we're to our guidance of year, lowering cost For

As and our using receivables. interest a net expense matures fixed rate continue percentage grow debt, funding rate will to our variable we average of as increase

ample maintain In continue to fund to strong we growth. our addition, balance remains and sheet liquidity our

$XXX have We equity million value as lifetime million share. stockholders' per loan of of or book $XXX as reserves loss well in $XX nearly

$XXX of As quarter, on end of revolving facilities. consisting million immediate on draw cash had of unrestricted million credit and of $XXX our availability our down second available capacity of hand facilities on and the liquidity, unused to we credit the

our XXXX, market. ability to we've to between short-term Our of million XXXX. stretching a in debt ourselves out And and the has capacity unused against million, and protect duration borrowing since revolving demonstrating credit roughly disruptions $XXX quarter maintained staggered $XXX

effective sheet funding ample strong liquidity and and a expectations. continue with and borrowing sources We XX.X% balance an rate with a second quarter, maintain consistent capacity, interest tax incurred staggered rate sensible management strategy. We to of will in our the diversified

prior effective We're an XX% full to of quarter, rate guidance we third the to rate effective maintaining our approximately items. year tax For XX.X% tax discrete expect of XX%.

continue also shareholders. to return capital We our to

for Directors Board at The of to shareholders XXXX. XX, XXXX, declared close dividend a be paid of August record on common quarter. Our share per the dividend will business XX, September on of the third $X.XX of

concludes a Rob. I'll XXXX over updated guidance back third Page earnings we quarter turn note XXXX the of summary now on that guidance our provide remarks. our of to call supplement. That I'll XX and Finally, our full-year my

Robert Beck

and cycle. very successful the posting current had line Harp. operate top results. positioned well to We Thanks, strong through a bottom of XXXX, We effectively economic half remain first

for investing and shareholders improved growth, our productivity way call open your operating also to up time while us credit in will our losses business in and achieve we through you enable improve I'll locations As our expect sustainable begin increasing that high-margin open and to additional new the strategic loan to a for the you branch over opening credit we're of half including growth, and in greater performance of forward term. Thank in excited long strong to again look initiatives Operator, continued the the the second and our to and questions. interest. efficiency deliver could to portfolios. continuing of expansion year, auto-secured now investment the portfolio please returns the We line?

Operator

KBW. will gentlemen, a question Sakhrani Instructions] Ladies conducting be first [Operator question-and-answer we you. is Sanjay Thank from session. and the line with now of Our

Steven Kwok

the around doing are could of -- Kwok consumer. at the filling consumers in you what if curious just see This was point? is down health to you're the the seeing I guess Steven first I for have drill on Sanjay. I'm this how question

Robert Beck

Steven. Sure, Thanks joining. for

said, we labor as the is So market bit. a softening

unemployment. about of You than recent than jobs for income less jobs is lower $XX,XXX are it, that look in Xx open saw we rolls. jobs terms were saw There greater hiring for weighted the Vanguard, a X up wages towards still little that over at tick I The $XX,XXX in research rate from way where million there's some of salary.

soften for our customer at so, pretty muted. set, that economy the we're least will that if the be And does optimistic impact

in particularly real wage segment. seen is, growth thing our other The we've a X in nice the last for jump customer months,

to think inflation been are positive where over last now I X they years. has relative the

pre But and over means pace X%, positive customer cycle. this probably the impacted healing. in of has customers average, for were probably our normalization is real mid-single-digit And the fact this so trend that that's it increase where set a also credit of debt the customer they on is by

customers are But the shape So, good little as of it's growth. right again. and moving will second get we burn through direction how time the going to year bit about stable that for in feel up pretty into a the more lean some things take to and we

Steven Kwok

as better And follow-up, what for the to environment of type or if that change think like adapt able about either we disposal environment? like a the are at just to for levers be the worse, if -- to your would

Robert Beck

have There's exactly job opportunities. at we higher our great customers. question. Look, opportunity the you And stress plenty in build we're those because of as is looking for an into in Look, Yes. that built the those know, ample margin underwriting. I business assumptions pricing as said, rate risk-based consumers,

that's attractive. the balancing of are the there. demand portfolio, the remains spectrum, the on auto-secured The of business which act our It's X.X%. part So growing for good increasing overall an side as delinquencies kind is of portfolio. other The

economy we And if continue to into obviously, look, softens, opportunity so up. to that it goes lean credit the have when demand space. And for soften, does the

we always learned to be in loan put all I we're going on which we sheet. months the going pricing cost we're last as expense in forward. course, pull the through levers real lot of to and relative terms of balance portfolio And in X re-growth the risk, of our funds be of X good shape. we going and that to long And that's helpful manage smart a in we've think small As to about frankly, testing tightly

of lot future the a to business. got optimistic and about we've levers look, we're of pull So the

Operator

the Our line Instructions] Caintic with question from Vincent of comes next [Operator BTIG.

Vincent Caintic

just I'll both have of I them questions. X now. ask

the first actually, guidance. So, both questions question, on

then very that the was -- outlook of stayed and increased the thinking outlook, you noticed there The XXXX band about old it's could took one. And guidance talking several talk unchanged? reserves so though helpful. you if within for last prior two, to talking it's losses expense first maybe the -- G&A then about and I see the having to XX.X%, still about same, think stores. especially year about new has credit credit it impressive you're losses, you higher XXXX band, question, just outlook that and up question full since the higher was wondering detailed that's there's So your especially And why guidance that growth, XX.X%. your I XX.X% the than the relatively credit was discussed that XX.X% guidance to because was how reserves, I and receivables with question is it you're was to so now lower you're that about you

I So, efficiency to wondering those the speak if guidance able components both good upside revenues, there. about you're in having of have better maybe well more was as And to a on that for could revenue detail, expenses? lot how your as you talk productivity

Harpreet Rana

Vincent, thank question. you for that

start I'll reserve. the So, on

previously, and had that. we XX.X% narrowed we've guided XX.X%, to to So

of So, to we're the range. than end on were actually now higher we low where guiding to the so little bit XX.X%, XX.X% a

runs brought in our the of that So, we be feel we off. upon macro confident XX.X%. terms of the low variables. book of end But be range XX.X% also much will up. back upon quickly course, will and how the It That, very dependent dependent

expected is portfolio of to book So at our right the be back X% to now, year-end. XX%

could based we're So, X what XX.X% estimate upon XX.X% for items to where we those But seeing. right end is reserves. now, our impact

seeing small the revenue we're But loans, as of in to so his also those XX.X% are terms yield remarks, higher on those. included In that in prepared Rob mentioned XX.X%.

taken XX revenue points we've points now So, XX up yields, basis our taken guidance previously. were to basis to up XX points points. them we've XX which on basis basis But to

where goes So, have the reserves. tighten on on upside that you're along points us yield we seeing XX small basis the loans those with of revenue are that had

Robert Beck

And before to the grew auto-secured period small is $XX XXX the small of portfolio that the in that Yes. to million specific business prior has The same year-on-year. over time. is interest see you'll is up release and important get fee is to in is really yields I loans one that this It of question points the by But million, growth and this wasn't said, that. grown what's balancing the $XX business the basis versus year. loan let as on we add me on efficiency your about

year you basis of about inclusive from business. look of down higher XX% rate the versus at prior XX delinquencies, and small If loan it's points the that's impact

operations. why on the It's are a it portfolio our modestly and there's getting leverage put auto-secured. the it's balance to small that's just and of on back that of that more It's core attractive time with always into lot of and part some to we're a we -- loan now leaning been business. that So -- is out business

for rate. the G&A pivoting mean to tightly. you. we at It's office bigger, important delivers I Now business expense. don't head our scale cost Look, manage we we that's what the the that as grow same get

our So, tightly. we manage expenses

rate is both ability getting things rates. standpoint, digitally. on technology We a efficiency are we've the source higher a standpoint, from customers to higher That efficient business from benefits, pretty our done marketing from response

the very where return. And about operating across so just to make the you revenue you being dollar of amount sure and board, get of it it's that the the expense tightly managing deploy smart next business benefits of really well, maximum and

Operator

Alexander next Our Villalobos comes with the from Jefferies. question of line

Alexander Villalobos-Morsink

and results. the just revisit loan a Did on want to little Congrats growth. originations bit

that the more confirming an of in order originations a revenue, kind in just of gave we guide [ ] guys the we the fourth for then should ENR usually, you to -- push get see of little growth. of for fourth in well bit an quarter kind just of that increase quarter. the as So, to see And kind that

confirming well, versus we that quarter see of like fourth kind just So, quarter. natural third of as bump kind the

Harpreet Rana

to So, first question to around talk I'm origination. going your the

for guidance X%. ENR of our year given the we've So,

where at a quarter, for look be at $XX third million we take you when guided [ ENR ]. to for we'd So,

than you in origination. of can figure that terms basically out that, quarter is a to guidance third quarter bit little from So fourth higher going be

probably again? could second And your repeat question your use you sorry, of the model. for I'm that could Alex, part So you

Alexander Villalobos-Morsink

just have Yes. like yield is on can just to least back okay from And fourth there's just from But to everything of well. growth kind yes, it's ENR like kind as the basically numbers at macro of cuts a like to -- maybe the kind those of just of into going obviously, point inclusive if just like expecting anything maybe XXXX, then guys towards No, rate confirming perspective, you similar can side. to all you and years, prior quarter like be yes, stronger.

Robert Beck

Yes.

for year. net reserves and we're this naturally it is the I'll full have CECL some any largely is income That fact year. the So look, due tell that guidance not year there of do back growth at impacts a ability that XXXX. the end or in to to pull What we ramp to up you range guidance this give the position obviously, is on a for the

go couple we we and the Fed lot we see the a of months performs, next of I so, as And there's think factors. through here see what inflation how does,

do But new there's to volume. And and more of ENR And good opportunity we we're impact that's or generally we what can that pretty grab We the But up more whether have it the put X% XXXX depending of about feel point taper good a branches. XX help end on the ability why regard, to back. some in we that to year at at pretty time, thinking around movement the about volumes job in we XXXX. maybe growth. lean on opening you this into growth always see the

averaged those of very The be we we'll new have those put new the But kind -- the the of the in when this won't or they the putting that year in states, in, I last quarter couple in the year. open states fourth fourth about of branches receivables. say states year on until X it's the of have we be Now states XX end of quarter branches the $X.X million years.

that it there's X from But more forward I macro of we're should put Now are in think to year. into to new a we that's and terms is stores. years start this where we expanding maturity. go And as new opportunities on XXXX of standpoint things branches going then credit after think improved aggressively we if feel XX be,

Alexander Villalobos-Morsink

results. Congrats on the

Robert Beck

Thanks, Alex. Great.

Harpreet Rana

Alex. Thanks,

Operator

you. and no President conference as Rob now his Ladies closing there gentlemen, further to questions, Thank Beck, hand the are I for comments. and over CEO

Robert Beck

is operator, period last with income up last year. our XX% Great. second we're joining year for also satisfying quarter and results. the over up thanks, Net very and XX% Look, over Thank income with progress our today. net you, everyone, similar year-to-date happy very

continues to continue as growth, second for improve positioned well we're expected to as said, the book to the front we credit perform is in As expected half. and

And comfortable as those expanded We our to that and new feeling about leaning expansion into And we're comment is that market to are And going in go after to really probably increasingly going add and you recall, share. just investment, we new up the states. we're addressable more XX if market. was there opening XX% to an in about talked branches. addressable more increase grabbing our branches market the

to of needs advantage can access So, credit, opportunity that credit small the customers the competitive our meet business. the auto-secured time, are high losing that to experiencing we've balancing increasing who said, in while rate we or same risk-based access the got with at I a utilize in with reduced our out excited right pricing business about we're future. And now as to where

of and will goes perform. And entire pay life from the auto-secured in them course, So, business loan -- to business of as on on customer inflation see loan normalize. where profiles is we business. half to But and environment, to really position in XX% and how particularly we cycle. happy lots the pull are got We've receivable really which a where faster overall, business, core being second credit both customer of us life the loan, for we said, small to the we customers manage and are depend about levers a as we a an an those of loan to auto-secured later the large about in able in get than get feel attractive greater business core good into our cycle the them degree grow the the economic good growth we we're and feeder pretty into levers

positioned. So, we feel very we're well

a good have evening. and again, thanks So

Operator

The of has now participation. Regional for you. conference your Thank you Management concluded. Thank

lines. now may disconnect your You

Regional Management (RM) 31 Jul 242024 Q2 Earnings call transcript