Regional Management Corp. (NYSE:RM) Q4 2023 Earnings Call Transcript

Operator: This concludes the question-and-answer session. I would like to turn the conference back over to Mr. Beck for any closing remarks. Please go ahead.

Robert Beck: Thanks, operator, and thanks everyone for joining this evening. Let me close by saying that I’m optimistic about our future. As I said, the economic outlook is improving. Inflation is falling, real wage growth, unemployment below 4%. There’s still 9 million open jobs out there, and the rate cuts, as I said, are seemingly on the horizon. I think most importantly though, we put the back — the higher losses on our back book behind us. And as we said, our front book continues to perform in line with our expectations. Our back book is 22% of E&R now, and by year end, it’s going to be 8%. Given our proactive tightening, our MCLs did peak in 2023. And while the back book is still leading to elevated losses in 2024, we are fully reserved for those losses at a reserve rate of 14.8%.

And lastly, our year end 30 plus day delinquencies were better than prior year by 20 basis points. Overall, our model is proven to be very resilient through a period of high inflation that’s not been seen in 40 years. And during this period, we continue to invest in the business, so we could lean into growth as the macro environment improves. We have a strong balance sheet with liquidity to fund our growth. And when you factor in the fourth quarter actions, we still generated $26 million of capital this year, of which $12 million was paid out in dividends, and we ended the year with $322 million of book value or $33 per share. So given all these actions, we are positioned to improve earnings this year, and we’re seeing a strong 2025 and beyond.

So again, thank you all for joining and have a good night.

Operator: This concludes today’s conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.