ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
An index to our management’s discussion and analysis follows:
Page
Forward-Looking Statements
Overview
Outlook
Factors Affecting Our Results of Operations
Components of Results of Operations
Results of Operations
Comparison of December 31, 2025, versus December 31, 2024
Comparison of the Year Ended December 31, 2025, versus the Year Ended December 31, 2024
Comparison of the Year Ended December 31, 2024, versus the Year Ended December 31, 2023
Liquidity and Capital Resources
Critical Accounting Policies and Estimates
Forward-Looking Statements
The following discussion and analysis should be read in conjunction with, and is qualified in its entirety by reference to, our audited consolidated financial statements and the related notes that appear in Part II, Item 8, “Financial Statements and Supplementary Data” in this Annual Report on Form 10-K. These discussions contain forward-looking statements that reflect our current expectations and that include, but are not limited to, statements concerning our strategies, future operations, future financial position, future revenues, projected costs, expectations regarding demand and acceptance for our financial products, growth opportunities and trends in the market in which we operate, prospects, and plans and objectives of management. The words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “predicts,” “will,” “would,” “should,” “could,” “potential,” “continue,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements involve risks and uncertainties that could cause actual results, events, and/or performance to differ materially from the plans, intentions, and expectations disclosed in the forward-looking statements. Such risks and uncertainties include, without limitation, the risks set forth in Part I, Item 1A, “Risk Factors” in this Annual Report on Form 10-K. The forward-looking information we have provided in this Annual Report on Form 10-K pursuant to the safe harbor established under the Private Securities Litigation Reform Act of 1995 should be evaluated in the context of these factors. Forward-looking statements speak only as of the date they were made, and we undertake no obligation to update or revise such statements, except as required by the federal securities laws.
Overview
We are a diversified consumer finance company that provides installment loan products primarily to customers with limited access to consumer credit from banks, thrifts, credit card companies, and other lenders. As of December 31, 2025, we operate under the name “Regional Finance” online and in 353 branch locations in 19 states across the United States, serving 590,800 active accounts. Most of our 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. We source our loans through our omni-channel platform, which includes our branches, centrally-managed direct mail campaigns, digital partners, and our consumer website. We operate an integrated branch model in which nearly all loans, regardless of origination channel, are serviced through our branch network with the support of centralized sales, underwriting, service, collections, and administrative teams. This model provides us with frequent contact with our customers, which we believe improves our credit performance and customer loyalty. Our goal is to consistently grow our finance receivables and to soundly manage our portfolio risk, while providing our customers with attractive and easy-to-understand loan products that serve their varied financial needs.
Regional Management Corp. | 2025 Annual Report on Form 10-K | 47
Table of Contents
Our products include:
Large Loans (>$2,500) – As of December 31, 2025, we had 289.3 thousand large installment loans outstanding, representing $1.6 billion in net finance receivables. This included 82.2 thousand large loan convenience checks, representing $258.0 million in net finance receivables.
Small Loans (≤$2,500) – As of December 31, 2025, we had 301.5 thousand small installment loans outstanding, representing $547.0 million in net finance receivables. This included 157.7 thousand small loan convenience checks, representing $246.8 million in net finance receivables.
Optional Insurance Products – We offer optional payment and collateral protection insurance to our direct loan customers.
Large and small installment loans are our core products and will be the drivers of future growth. Our primary sources of revenue are interest and fee income from our loan products, of which interest and fees relating to large and small installment loans are the largest component. In addition to interest and fee income from loans, we earn revenue from optional insurance products purchased by customers of our loan products.
For additional information regarding our business operations, see Part I, Item 1, “Business.”
Outlook
We continually assess the macroeconomic environment in which we operate in order to adapt appropriately and timely to current market conditions. Macroeconomic factors, including, but not limited to, unemployment, inflationary pressures, higher interest rates, tariffs, and impacts from current geopolitical events outside the U.S., may affect our business, liquidity, financial condition, and results of operations.
We continue to execute our strategy of growth in our higher-margin small loan portfolio and our high-quality, auto-secured loan portfolio. On a year-over-year basis, our portfolio of loans with an APR greater than 36% grew by $32.5 million and represented 17.9% of the portfolio, while our auto-secured loan portfolio grew by $87.7 million and represented 13.7% of the portfolio.
Our allowance for credit losses was 10.3% of net finance receivables as of December 31, 2025. Going forward, macroeconomic conditions may necessitate changes to the macroeconomic assumptions within our forecast and to our credit loss performance outlook, either of which could lead to further changes in our allowance for credit losses, reserve rate, and provision for credit losses expense.
We have proactively diversified our funding over the past few years and continue to maintain a strong liquidity profile. As of December 31, 2025, we had $149.2 million of available liquidity, comprised of unrestricted cash on hand and immediate availability to draw down cash from our revolving credit facilities. In addition, we had $511.4 million of unused capacity on our revolving credit facilities (subject to the borrowing base) as of December 31, 2025. We believe our liquidity position provides substantial runway to support the fundamental operations of our business and to fund future growth.
Factors Affecting Our Results of Operations
Our business is impacted by several factors affecting our revenues, costs, and results of operations, including the following:
Quarterly Information and Seasonality . Our loan volume and contractual delinquency follow seasonal trends. Demand for our loans is typically highest during the second, third, and fourth quarters, which we believe is largely due to customers borrowing money for vacation, back-to-school, and holiday spending. Loan demand has generally been the lowest during the first quarter, which we believe is largely due to the timing of income tax refunds. Delinquencies generally reach their lowest point in the first half of the year and rise in the second half of the year. Changes in quarterly growth or liquidation could result in larger allowance for credit loss releases in periods of portfolio liquidation, and larger provisions for credit losses in periods of portfolio growth. Consequently, we experience seasonal fluctuations in our operating results. However, changes in macroeconomic factors, including inflation, higher interest rates, and geopolitical conflict, have impacted our typical seasonal trends for loan volume and delinquency.
Growth in Loan Portfolio. The revenue that we generate from interest and fees is largely driven by the balance of loans that we originate. We source our loans through our branches, centrally-managed direct mail program, digital partners, and consumer website. The majority of our loans, regardless of origination channel, are serviced through our branches. Increasing the number of loans per branch and growing our state footprint allows us to increase the number of customers we are able to serve. We continue to assess our branch network for clear opportunities to add branches in new and existing states where it is favorable for us to conduct business or consolidate operations into larger branches within close geographic proximity. This branch optimization is consistent with our
Regional Management Corp. | 2025 Annual Report on Form 10-K | 48
Table of Contents
omni-channel strategy and builds upon our recent successes in entering new states with a lighter branch footprint, while still providing customers with best-in-class service.
Our growth decisions consider consumer health, strength of the economy, and the credit performance of our portfolio. We balance our commitment to deliver strong short-term results while also generating the portfolio growth that will fuel our success and returns over the long-term. As we grow our portfolio, we are required to reserve for expected lifetime credit losses at the origination of each loan, which reduces net income, while the related revenue benefits are recognized over the life of each loan. This timing difference can weigh on short‑term results during periods of portfolio expansion.
Product Mix. We are exposed to different credit risks and charge different interest rates and fees with respect to the various types of loans we offer. Our product mix also varies to some extent by state, and we may further diversify our product mix in the future. The interest rates and fees vary from state to state, depending on the competitive environment and relevant laws and regulations.
Asset Quality and Allowance for Credit Losses. Our results of operations are highly dependent upon the credit quality of our loan portfolio. The credit quality of our loan portfolio is the result of our ability to enforce sound underwriting standards, maintain diligent servicing of the portfolio, and respond to changing economic conditions as we grow our loan portfolio.
The primary underlying factors driving the provision for credit losses for each loan type are our underwriting standards, delinquency trends, the general economic conditions in the areas in which we conduct business, loan portfolio growth, and the effectiveness of our servicing and collection efforts. We monitor these factors, and the amount and past due status of all loans, to identify trends that might require us to modify the allowance for credit losses.
Interest Rates. Our costs of funds are affected by changes in interest rates, as the interest rates that we pay on certain of our credit facilities are variable. As a component of our strategy to manage the interest rate risk associated with future interest payments on our variable-rate debt, a majority of our funding was held at a fixed rate as of December 31, 2025, representing 84% of our total debt balance.
Operating Costs. Our financial results are impacted by the costs of operations and head office functions. Those costs are included in general and administrative expenses within our consolidated statements of comprehensive income.
Components of Results of Operations
Interest and Fee Income. Our interest and fee income consists primarily of interest earned on outstanding loans. Accrual of interest income on finance receivables is suspended when an account becomes 90 days delinquent. If the account is charged off, the accrued interest income is reversed as a reduction of interest and fee income.
Most states allow certain fees in connection with lending activities, such as loan origination fees, acquisition fees, and maintenance fees. Some states allow for higher fees while keeping interest rates lower. Loan fees are additional charges to the customer and generally are included in the APR shown in the Truth in Lending disclosure that we make to our customers. The fees may or may not be refundable to the customer in the event of an early payoff, depending on state law. Fees are recognized as income over the life of the loan on the constant yield method.
Insurance Income, Net. Our insurance operations are a material part of our overall business and are integral to our lending activities. Insurance income, net consists primarily of earned premiums, net of certain direct costs, from the sale of various optional payment and collateral protection insurance products offered to customers who obtain loans directly from us. Insurance income, net also includes the earned premiums and direct costs associated with the non-file insurance that we purchase to protect us from credit losses where, following an event of default, we are unable to take possession of personal property collateral because our security interest is not perfected. We do not sell insurance to non-borrowers. Direct costs included in insurance income, net are claims paid, claims reserves, ceding fees, and premium taxes paid. We do not allocate to insurance income, net, any other head office or branch administrative costs associated with management of insurance operations, management of our captive insurance company, marketing and selling insurance products, legal and compliance review, or internal audits.
Other Income. Our other income consists of late charges assessed on customers who fail to make a payment within a specified number of days following the due date of the payment, interest income from restricted cash, commissions earned from the sale of club membership products, and investment income from restricted AFS securities.
Regional Management Corp. | 2025 Annual Report on Form 10-K | 49
Table of Contents
Provision for Credit Losses. Provisions for credit losses are recorded in amounts that we estimate as sufficient to maintain an allowance for credit losses at an adequate level to provide for lifetime expected credit losses on the related finance receivable portfolio. We reserve for expected lifetime credit losses at origination of each loan, while the revenue benefits are recognized over the life of the loan. Credit loss experience, current conditions, reasonable and supportable economic forecasts, delinquency of finance receivables, loan portfolio growth, the value of underlying collateral, and management’s judgment are factors used in assessing the overall adequacy of the allowance and the resulting provision for credit losses. Substantial adjustments to the allowance may be necessary if there are significant changes in forecasted economic conditions or loan portfolio performance.
General and Administrative Expenses. Our financial results are impacted by the costs of operations and head office functions. Those costs are included in general and administrative expenses within our consolidated statements of comprehensive income. Our general and administrative expenses are comprised of four categories: personnel, occupancy, marketing, and other.
Our personnel expenses are the largest component of our general and administrative expenses and consist primarily of the salaries and wages, overtime, contract labor, relocation costs, incentives, benefits, and related payroll taxes associated with all of our operations and head office employees.
Our occupancy expenses consist primarily of the cost of renting our facilities, all of which are leased, and the utility, depreciation of leasehold improvements and furniture and fixtures, communication and connectivity services, and other non-personnel costs associated with operating our business.
Our marketing expenses consist primarily of costs associated with our direct mail campaigns (including postage and costs associated with selecting recipients), digital marketing, maintaining our consumer website, and local marketing by branches. These costs are expensed as incurred.
Other expenses consist primarily of legal, compliance, audit, and consulting costs, as well as software maintenance and support, non-employee director compensation, electronic payment processing costs, bank service charges, office supplies, credit bureau charges, and the amortization of software, software licenses, and implementation costs. We frequently experience fluctuations in other expenses as we grow our loan portfolio and expand our market footprint. For a discussion regarding how risks and uncertainties associated with the current regulatory environment may impact our future expenses, net income, and overall financial condition, see Part I, Item 1A, “Risk Factors.”
Interest Expense. Our interest expense consists primarily of paid and accrued interest for debt, unused line fees, and amortization of debt issuance costs.
Income Taxes. Income taxes consist of state and federal income taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The change in deferred tax assets and liabilities is recognized in the period in which the change occurs, and the effects of future tax rate changes are recognized in the period in which the enactment of new rates occurs.
Regional Management Corp. | 2025 Annual Report on Form 10-K | 50
Table of Contents
Results of Operations
The following table summarizes our results of operations, both in dollars and as a percentage of average net finance receivables for the periods indicated:
Year Ended December 31,
Dollars in thousands
Amount
Average Net Finance
Receivables
Amount
Average Net Finance
Receivables
Amount
Average Net Finance
Receivables
Revenue
Interest and fee income
Insurance income, net
Other income
Total revenue
Expenses
Provision for credit losses
Personnel
Occupancy
Marketing
Other
Total general and administrative
Interest expense
Income before income taxes
Income taxes
Net income
Information explaining the changes in our results of operations from year-to-year is provided in the following pages.
Comparison of December 31, 2025, Versus December 31, 2024
The following discussion and table describe the changes in finance receivables by product type for the periods indicated:
Large Loans (>$2,500) – Large loans outstanding increased by $256.4 million, or 19.2%, to $1.6 billion at December 31, 2025, from $1.3 billion at December 31, 2024. The increase was due to growth in our auto-secured loan portfolio, the growth of receivables in branches opened during 2024 and 2025, and the transition of small loan customers to large loans.
Small Loans (≤$2,500) – Small loans outstanding decreased by $8.7 million, or 1.6%, to $547.0 million at December 31, 2025, from $555.8 million at December 31, 2024. The decrease was due to the transition of small loan customers to large loans, offset by growth of receivables in branches opened during 2024 and 2025.
Dollars in thousands
December 31, 2025
December 31, 2024
YoY $
Inc (Dec)
YoY %
Inc (Dec)
Large loans
Small loans
Total
Number of branches
Net finance receivables per branch
Comparison of the Year Ended December 31, 2025, Versus the Year Ended December 31, 2024
Net Income. Net income increased $3.2 million, or 7.7%, to $44.4 million in 2025, from $41.2 million in 2024. The change in net income is explained in greater detail below.
Regional Management Corp. | 2025 Annual Report on Form 10-K | 51
Table of Contents
Revenue. Total revenue increased $57.1 million, or 9.7%, to $645.6 million in 2025, from $588.5 million in 2024. The components of revenue are explained in greater detail below.
Interest and Fee Income . Interest and fee income increased $50.1 million, or 9.5%, to $578.9 million in 2025, from $528.9 million in 2024. The increase was due to a 10.3% increase in average net finance receivables, partially offset by a 0.3% decrease in interest and fee yield. The decrease in yield was primarily due to a higher percentage of large and auto-secured loans within the portfolio. The prior year included reductions in revenue reversals of an estimated $1.7 million attributable to the fourth quarter 2023 loan sale.
The following table sets forth the average net finance receivables balance and interest and fee yield for our loan products for the periods indicated:
Year Ended December 31,
Year Ended December 31,
Dollars in thousands
YoY %
Inc (Dec)
YoY
Inc (Dec)
Large loans
Small loans
Total
Total originations increased to $2.0 billion in 2025, from $1.7 billion in 2024. The following table represents the principal balance of loans originated and refinanced for the periods indicated:
Year Ended December 31,
Dollars in thousands
YoY $
Inc (Dec)
YoY %
Inc (Dec)
Large loans
Small loans
Total
The following table summarizes the components of the increase in interest and fee income when comparing the years ended December 31, 2025 and 2024:
Increase (Decrease)
Dollars in thousands
Volume
Rate
Volume &
Rate
Net
Large loans
Small loans
Product mix
Total
Insurance Income, Net . Insurance income, net increased $4.9 million, or 12.0%, to $45.6 million in 2025, from $40.7 million in 2024. In both 2025 and 2024, personal property insurance premiums represented the largest component of aggregate earned insurance premiums, and life insurance claims expense represented the largest component of direct insurance expenses.
The following table summarizes the components of insurance income, net for the periods indicated:
Year Ended December 31,
Dollars in thousands
YoY $
YoY %
Earned premiums
Claims, reserves, and certain direct expenses
Insurance income, net
Earned premiums during 2025 increased by $1.5 million, and claims, reserves, and certain direct expenses decreased by $3.4 million in each case compared to 2024. The increase in insurance premiums was primarily due to increases in personal property insurance premiums and life insurance premiums. The decrease in claims, reserves, and direct expenses was primarily due to hurricane activity in the prior year, including personal property claims and reserves of $2.6 million during 2024 and a reserve release benefit of $1.0 million during 2025.
Regional Management Corp. | 2025 Annual Report on Form 10-K | 52
Table of Contents
Other Income . Other income increased $2.2 million, or 11.4%, to $21.1 million in 2025, from $18.9 million in 2024, primarily due to an increase in sales of our club membership products of $2.1 million.
Provision for Credit Losses. Our provision for credit losses increased $33.2 million, or 15.7%, to $245.4 million in 2025, from $212.2 million in 2024. The increase was due to an increase in net credit losses of $23.9 million and the increase in provision expense of $9.3 million compared to 2024. The increase in the provision for credit losses is explained in greater detail below.
Allowance for Credit Losses. We evaluate delinquency and losses in each of our loan products in establishing the allowance for credit losses. During 2025 and 2024, the allowance for credit losses included builds of $21.4 million and $12.1 million, respectively. The higher build in 2025 was primarily driven by growth in net finance receivables during the year. The allowance for credit losses as a percentage of net finance receivables decreased to 10.3% as of December 31, 2025, from 10.5% as of December 31, 2024, primarily due to changes in estimated future macroeconomic impacts on credit losses. See Note 4, “Finance Receivables, Credit Quality Information, and Allowance for Credit Losses” of the Notes to Consolidated Financial Statements in Part II, Item 8, “Financial Statements and Supplementary Data,” for additional information regarding our allowance for credit losses.
Net Credit Losses. Net credit losses increased $23.9 million, or 12.0%, to $224.0 million in 2025, from $200.1 million in 2024. The increase was primarily due to higher average net finance receivables for the year ended December 31, 2025. Our net credit losses during the prior year were inclusive of an estimated $12.2 million benefit from accelerated charge-offs in the fourth quarter of 2023 attributable to the fourth quarter 2023 loan sale. Our net credit loss rate was 11.4% in 2025, compared to 11.2% in 2024. Our net credit loss rate during 2024 was inclusive of an estimated 70 basis point benefit related to the fourth quarter 2023 loan sale.
Delinquency Performance. Our delinquency rate improved to 7.5% as of December 31, 2025, from 7.7% as of December 31, 2024, reflecting the overall improved credit quality and performance of our portfolio.
The following tables include delinquency balances by aging category and by product for the periods indicated:
Contractual Delinquency by Aging
Dollars in thousands
December 31, 2025
December 31, 2024
Current
1 to 29 days past due
Delinquent accounts:
30 to 59 days
60 to 89 days
90 to 119 days
120 to 149 days
150 to 179 days
Total delinquency
Total net finance receivables
Contractual Delinquency by Product
Dollars in thousands
December 31, 2025
December 31, 2024
Large loans
Small loans
Total
General and Administrative Expenses. Our general and administrative expenses increased $9.9 million, or 4.0%, to $257.6 million in 2025 from $247.7 million in 2024. The absolute dollar increase in general and administrative expenses is explained in greater detail below.
Personnel. The largest component of general and administrative expenses is personnel expense, which increased $5.8 million, or 3.8%, to $159.6 million in 2025, from $153.8 million in 2024. The increase was primarily driven by an increase in labor costs of $7.9 million, including staffing 17 new branches since the prior year, and increased incentive costs of $1.1 million. Additionally, the year ended December 31, 2025 included an increase in severance expense of $0.8 million. The increases were partially offset by higher capitalized loan origination costs, which reduce personnel expenses, of $4.1 million.
Regional Management Corp. | 2025 Annual Report on Form 10-K | 53
Table of Contents
Occupancy. Occupancy expenses increased $2.4 million, or 9.2%, to $28.2 million in 2025, from $25.8 million in 2024, primarily due to expenses associated with opening 17 new branches since the prior year.
Marketing. Marketing expenses decreased $0.5 million, or 2.4%, to $18.6 million in 2025, from $19.0 million in 2024, primarily due to decreased activity in our direct mail campaigns of $0.9 million due to optimization of our framework for direct mail marketing, partially offset by higher digital marketing costs of $0.4 million.
Other Expenses. Other expenses increased $2.1 million, or 4.3%, to $51.2 million in 2025, from $49.1 million in 2024. Other expenses increased $1.4 million due to investment in digital and technological capabilities, including our new front-end branch origination platform. Additionally, we often experience increases in other expenses including legal expenses, bank fees, and certain professional expenses as we grow our loan portfolio and expand our market footprint.
Operating Expense Ratio. Our operating expense ratio decreased to 13.1% during 2025, from 13.8% during 2024. Our operating expense ratio has improved as we have grown our loan portfolio and controlled expense growth.
Interest Expense. Interest expense increased $10.3 million, or 13.8%, to $84.8 million in 2025, compared to $74.5 million in 2024 primarily due to an increase in the average balance of our debt facilities. The average balance of our debt facilities increased to $1.5 billion in 2025, from $1.4 billion in 2024. Our cost of funds increased 0.1% to 4.3% during 2025, from 4.2% during 2024.
Income Taxes. Income taxes increased $0.5 million, or 4.0%, to $13.4 million in 2025, from $12.8 million in 2024. The increase was primarily due to a $3.7 million increase in income before taxes compared to 2024 and offset by decreases related to excess tax benefits of share-based compensation. Our effective tax rate decreased to 23.1% in 2025, compared to 23.8% in 2024.
Comparison of the Year Ended December 31, 2024, Versus the Year Ended December 31, 2023
For a comparison of our results of operations for the years ended December 31, 2024 and December 31, 2023, see Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (which was filed with the SEC on February 21, 2025), which is incorporated by reference herein.
Liquidity and Capital Resources
Our primary cash needs relate to the funding of our lending activities and, to a lesser extent, expenditures relating to improving our technology infrastructure and expanding and maintaining our branch locations. We have historically financed, and plan to continue to finance, our short-term and long-term operating liquidity and capital needs through a combination of cash flows from operations and borrowings under our debt facilities, including our senior revolving credit facility, revolving warehouse credit facilities, and asset-backed securitization transactions, all of which are described below. We continue to seek ways to diversify our funding sources. As of December 31, 2025, we had a funded debt-to-equity ratio of 4.4 to 1.0 and a stockholders’ equity ratio of 17.7%, compared to 4.1 to 1.0 and 18.7%, respectively, as of December 31, 2024.
Cash and cash equivalents decreased to $3.8 million as of December 31, 2025, from $4.0 million as of December 31, 2024. We had immediate availability to draw down cash from our revolving credit facilities of $145.3 million and $132.9 million as of December 31, 2025 and the prior year-end, respectively. Our unused capacity on our revolving credit facilities (subject to the borrowing base) was $511.4 million and $466.2 million as of December 31, 2025 and the prior year-end, respectively. Our debt balance was $1.7 billion as of December 31, 2025 compared to $1.5 billion as of the prior year-end.
A summary of the future material financial obligations requiring payments as of December 31, 2025 is as follows:
Future Material Financial Obligations by Period
Dollars in thousands
Next Twelve Months
Beyond Twelve Months
Total
Principal payments on debt obligations
Interest payments on debt obligations
Operating lease obligations
Total
Based upon anticipated cash flows, we believe that cash flows from operations and our various financing alternatives will provide sufficient financing for debt maturities and operations over the next twelve months, as well as into the future.
Regional Management Corp. | 2025 Annual Report on Form 10-K | 54
Table of Contents
From time to time, we have extended the maturity date of and increased the borrowing limits under our senior revolving credit facility. While we have successfully obtained such extensions and increases in the past, there can be no assurance that we will be able to do so if and when needed in the future. As of December 31, 2025 the revolving period maturities of our securitizations and warehouse credit facilities (each as described below within “Financing Arrangements and Restricted Cash Reserve Accounts”) ranged from May 2026 to October 2027, with the exception of the RMIT 2022-1 securitization, for which the revolving period ended in February 2025. We had not exercised our right to redeem the notes of this securitization as of December 31, 2025. There can be no assurance that we will be able to secure an extension of the warehouse credit facilities or close additional securitization transactions if and when needed in the future.
Dividends and Stock Repurchases.
The Board may in its discretion declare and pay cash dividends on our common stock. The following table sets forth the dividends declared and paid for in the year ended December 31, 2025:
Period
Declaration Date
Record Date
Payment Date
Dividends Declared Per
Common Share
Dividends Paid
(in thousands)
February 5, 2025
February 20, 2025
March 13, 2025
April 30, 2025
May 21, 2025
June 11, 2025
July 30, 2025
August 20, 2025
September 10, 2025
November 5, 2025
November 25, 2025
December 16, 2025
Total
See Note 20, “Subsequent Events” of the Notes to Consolidated Financial Statements in Part II, Item 8, “Financial Statements and Supplementary Data,” for information regarding our quarterly cash dividend following the end of the year.
While we intend to pay our quarterly dividend for the foreseeable future, all subsequent dividends will be reviewed and declared at the discretion of the Board and will depend on many factors, including our financial condition, earnings, cash flows, capital requirements, level of indebtedness, statutory and contractual restrictions applicable to the payment of dividends, and other considerations that the Board deems relevant. Our dividend payments may change from time to time, and the Board may choose not to continue to declare dividends in the future.
In December 2024, we announced that our Board had authorized a $30.0 million stock repurchase program. The authorization was effective immediately and extended through December 31, 2026. In November 2025, we announced that our Board had approved a $30.0 million increase in the amount authorized under the stock repurchase program, from $30.0 million to $60.0 million. The authorization was effective immediately and extends through June 30, 2027. As of December 31, 2025, we had repurchased 0.8 million shares of common stock at a total cost of $27.7 million, including commissions and estimated excise taxes.
Cash Flow.
Operating Activities. Net cash provided by operating activities in 2025 was $309.1 million, compared to $268.9 million in 2024, a net increase of $40.1 million. The increase in net cash provided was primarily due to the growth of our loan portfolio.
Investing Activities. Investing activities consist of originations and repayments of finance receivables, purchases of intangible assets, and purchases of property and equipment for new and existing branches. Net cash used in investing activities in 2025 was $471.2 million, compared to $315.4 million in 2024, a net increase of $155.8 million. The increase in cash used was primarily driven by increased originations as we grew our loan portfolio, partially offset by increased repayments of finance receivables.
Financing Activities. Financing activities consist of borrowings and payments on our outstanding indebtedness. Net cash provided by financing activities in 2025 was $124.5 million, compared to $53.4 million in 2024, a net increase of $71.1 million. The net increase in cash provided was primarily due to an increase in net advances on debt instruments of $93.9 million, partially offset by an increase in the repurchases of common stock of $20.4 million.
Financing Arrangements and Restricted Cash Reserve Accounts.
As of December 31, 2025, we had five credit facilities outstanding and, from time to time, we engage in the private offering and sale of asset-backed notes. As part of our overall funding strategy, we have transferred certain finance receivables to affiliated VIEs for asset-backed financing transactions. Our debt arrangements described below, other than our senior revolving credit facility, are issued by each of our RMR and RMIT SPEs, which are considered VIEs under GAAP. These debts are supported by the expected cash
Regional Management Corp. | 2025 Annual Report on Form 10-K | 55
Table of Contents
flows from the underlying collateralized finance receivables. Collections on these finance receivables are remitted to restricted cash collection accounts, which totaled $81.8 million and $117.1 million as of December 31, 2025 and December 31, 2024, respectively. Our debt arrangements also contain various debt covenants. We were in compliance with all such debt covenants as of December 31, 2025.
Revolving Credit Facilities. The following is a summary of our revolving credit facilities as of December 31, 2025:
Dollars in thousands
Capacity
Debt Balance
Effective Interest Rate
Restricted Cash Reserves
Restricted Cash Collection
Maturity Date
Senior
Aug 2028
RMR IV warehouse
May 2027
RMR V warehouse
Nov 2027
RMR VI warehouse
Feb 2028
RMR VII warehouse
Oct 2026
Securitizations. The following is a summary of our securitizations as of December 31, 2025:
Dollars in thousands
Issue Amount
Debt Balance
Effective Interest Rate
Restricted Cash Reserves
Restricted Cash Collection
Revolving Period End Date
Maturity Date
RMIT 2021-2
Jul 2026
Aug 2033
RMIT 2021-3
Sep 2026
Oct 2033
RMIT 2022-1
Feb 2025
Mar 2032
RMIT 2024-1
May 2027
July 2036
RMIT 2024-2
Nov 2026
Dec 2033
RMIT 2025-1
Mar 2027
Apr 2034
RMIT 2025-2
Oct 2027
Nov 2037
RMC Reinsurance. Our wholly owned subsidiary, RMC Reinsurance, Ltd., is required to maintain reserves against life insurance policies ceded to it, as determined by the ceding company. These reserves are comprised of restricted cash and restricted AFS investments. As of December 31, 2025, the reserves totaled $24.4 million.
Critical Accounting Policies and Estimates
Management’s discussion and analysis of financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with GAAP and conform to general practices within the consumer finance industry. The preparation of these financial statements requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and disclosure of contingent assets and liabilities for the periods indicated in the financial statements. Management bases estimates on historical experience and other assumptions it believes to be reasonable under the circumstances and evaluates these estimates on an ongoing basis. Actual results may differ from these estimates under different assumptions or conditions.
Allowance for Credit Losses.
The allowance for credit losses is based on historical credit experience, current conditions, and reasonable and supportable economic forecasts. The historical loss experience is adjusted for quantitative and qualitative factors that are not fully reflected in the historical data. In determining our estimate of expected credit losses, we evaluate information related to credit metrics, changes in our lending strategies and underwriting practices, and the current and forecasted direction of the economic and business environment. These metrics include, but are not limited to, loan portfolio mix and growth, unemployment, credit loss trends, delinquency trends, changes in underwriting, and operational risks.
We selected a PD / LGD model to estimate our base allowance for credit losses, in which the estimated loss is equal to the product of PD and LGD. Historical net finance receivables are tracked over the term of the pools to identify the incidences of loss (PDs) and the average severity of losses (LGDs).
To enhance the precision of the allowance for credit loss estimate, we evaluate our finance receivable portfolio on a pool basis and segment each pool of finance receivables with similar credit risk characteristics. As part of our evaluation, we consider loan portfolio characteristics such as product type, loan size, loan term, internal or external credit scores, delinquency status, geographical
Regional Management Corp. | 2025 Annual Report on Form 10-K | 56
Table of Contents
location, and vintage. Based on analysis of historical loss experience, we selected the following segmentation: product type, FICO score, and delinquency status.
As finance receivables are originated, provisions for credit losses are recorded in amounts sufficient to maintain an allowance for credit losses at an adequate level to provide for estimated losses over the contractual life of the finance receivables (considering the effect of prepayments). Subsequent changes to the contractual terms that are a result of re-underwriting are not included in the finance receivable’s contractual life (considering the effect of prepayments). We use our segmentation loss experience to forecast expected credit losses. Historical information about losses generally provides a basis for the estimate of expected credit losses. We also consider the need to adjust historical information to reflect the extent to which current conditions differ from the conditions that existed for the period over which historical information was evaluated. These adjustments to historical loss information may be qualitative or quantitative in nature.
Macroeconomic forecasts are required for our allowance for credit loss model and require significant judgment and estimation uncertainty. We consider key economic factors, most notably unemployment rates, to incorporate into our estimate of the allowance for credit losses. We engaged a major rating service provider to assist with compiling a reasonable and supportable forecast which we use to support the adjustments of our historical loss experience.
Due to the judgment and uncertainty in estimating the expected credit losses, we may experience changes to the macroeconomic assumptions within our forecast, as well as changes to our credit loss performance outlook, both of which could lead to further changes in our allowance for credit losses, allowance as a percentage of net finance receivables, and provision for credit losses. Potential macroeconomic changes have created conditions that increase the level of uncertainty associated with our estimate of the amount and timing of future credit losses from our loan portfolio.
Macroeconomic Sensitivity. To demonstrate the sensitivity of forecasting macroeconomic conditions, we stressed our macroeconomic model with 10% increased weighting towards slower near-term growth that would have increased our reserves as of December 31, 2025 by $1.7 million.
The macroeconomic scenarios are highly influenced by timing, severity, and duration of changes in the underlying economic factors. This makes it difficult to estimate how potential changes in economic factors affect the estimated credit losses. Therefore, this hypothetical analysis is not intended to represent our expectation of changes in our estimate of expected credit losses due to a change in the macroeconomic environment, nor does it consider management’s judgment of other quantitative and qualitative information which could increase or decrease the estimate.
Regional Management Corp. | 2025 Annual Report on Form 10-K | 57
Table of Contents
ITEM 7A. QUANTITATIVE AND QUALITATI VE DISCLOSURES ABOUT MARKET RISK.
Interest Rate Risk
Interest rate risk arises from the possibility that changes in interest rates will affect our results of operations and financial condition. We originate finance receivables either at prevailing market rates or at statutory limits. Our finance receivables are structured on a fixed-rate, fixed-term basis. Accordingly, subject to statutory limits, our ability to react to changes in prevailing market rates is dependent upon the speed at which our customers pay off or renew loans in our existing loan portfolio, which allows us to originate new loans at prevailing market rates. Because our large loans have longer maturities than our small loans and typically renew at a slower rate than our small loans, our reaction time to changes may be affected as our large loans change as a percentage of our portfolio.
We also are exposed to changes in interest rates as a result of certain borrowing activities. As of December 31, 2025, 84% of our total debt balance consisted of fixed-rate borrowings from securitizations. We maintain liquidity and fund our business operations in part through variable-rate borrowings under a senior revolving credit facility and multiple revolving warehouse credit facilities. As of December 31, 2025, the balances and key terms of the credit facilities’ interest rate risk were as follows:
Revolving Credit Facility
Debt Balance
(in thousands)
Interest Payment Frequency
Floor
Margin
Rate Type
Effective Interest Rate
Senior
Monthly
1-month SOFR
RMR IV warehouse
Monthly
1-month SOFR
RMR V warehouse
Monthly
Conduit
RMR VI warehouse
Monthly
1-month SOFR
RMR VII warehouse
Monthly
1-month SOFR
Total
Based on the underlying rates and the outstanding balances as of December 31, 2025, an increase of 100 basis points in the rates of our revolving credit facilities would result in approximately $2.7 million of increased interest expense on an annual basis, in the aggregate, under these borrowings.
The nature and amount of our debt may vary as a result of future business requirements, market conditions, and other factors.
Regional Management Corp. | 2025 Annual Report on Form 10-K | 58
Table of Contents
ITEM 8. FINANCIAL STATEMEN TS AND SUPPLEMENTARY DATA.
Regional Management Corp.
Index to Consolidated Financial Statements
Fiscal Year Ended December 31, 2025
Page
Reports of Independent Registered Public Accounting Firm (PCAOB ID: 34 )
Consolidated Balance Sheets at December 31, 2025 and 2024
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2025, 2024, and 2023
Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2025, 2024, and 2023
Consolidated Statements of Cash Flows for the Years Ended December 31, 2025, 2024, and 2023
Notes to Consolidated Financial Statements
Note 1. Nature of Business
Note 2. Significant Accounting Policies
Note 3. Concentrations of Credit Risk
Note 4. Finance Receivables, Credit Quality Information, and Allowance for Credit Losses
Note 5. Restricted Available-for-Sale Investments
Note 6. Property and Equipment
Note 7. Leases
Note 8. Intangible Assets
Note 9. Other Assets
Note 10. Variable Interest Entities
Note 11. Debt
Note 12. Stockholders’ Equity
Note 13. Fair Value Measurements
Note 14. Income Taxes
Note 15. Earnings Per Share
Note 16. Share-Based Compensation
Note 17. Commitments and Contingencies
Note 18. Insurance Products and Reinsurance of Certain Risks
Note 19. Segment Reporting
Note 20. Subsequent Events
Regional Management Corp. | 2025 Annual Report on Form 10-K | 59
Table of Contents
Report of Independent Regis tered Public Accounting Firm
To the stockholders and the Board of Directors of Regional Management Corp.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Regional Management Corp. and subsidiaries (the “Company”) as of December 31, 2025, and 2024, the related consolidated statements of comprehensive income, stockholders' equity, and cash flows, for each of the three years in the period ended December 31, 2025, and the related notes to consolidated financial statements (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 20, 2026, expressed an unqualified opinion on the Company's internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Allowance for Credit Losses — Refer to Notes 2 and 4 to the consolidated financial statements
The Company’s estimate of expected credit losses in the Company’s loan portfolio is recorded in the allowance for credit losses. The allowance for credit losses is based on historical credit experience, current conditions, and reasonable and supportable economic forecasts. The historical loss experience is adjusted for quantitative and qualitative factors that are not fully reflected in the historical data. In determining its estimate of expected credit losses, the Company evaluates information related to credit metrics, changes in its lending strategies and underwriting practices, and the current and forecasted direction of the economic and business environment. These metrics include, but are not limited to, loan portfolio mix and growth, unemployment, credit loss trends, delinquency trends, changes in underwriting, and operational risks.
The Company selected a Probability of Default (“PD”) / Loss Given Default (“LGD”) model to estimate its base allowance for credit losses, in which the estimated loss is equal to the product of PD and LGD. Historical net finance receivables are tracked over the term of the pools to identify the incidences of loss (PDs) and the average severity of losses (LGDs). To enhance the precision of the allowance for credit loss estimate, the Company evaluates its finance receivable portfolio on a pool basis and segments each pool of finance receivables with similar credit risk characteristics. As part of its evaluation, the Company considers loan portfolio characteristics such as product type, loan size, loan term, internal or external credit scores, delinquency status, geographical location, and vintage. Based on analysis of historical loss experience, the Company selected the following segmentation: product type, Fair Isaac Corporation (“FICO”) score, and status.
Regional Management Corp. | 2025 Annual Report on Form 10-K | 60
Table of Contents
Historical information about losses generally provides a basis for the estimate of expected credit losses. The Company also considers the need to adjust historical information to reflect the extent to which current conditions differ from the conditions that existed for the period over which historical information was evaluated. These adjustments to historical loss information may be qualitative or quantitative in nature.
Reasonable and supportable macroeconomic forecasts are required for the Company’s allowance for credit loss model. The Company engaged a major rating service to assist with compiling a reasonable and supportable forecast. The Company reviews macroeconomic forecasts to use in its allowance for credit losses. The Company adjusts the historical loss experience by relevant qualitative factors for these expectations. The Company does not require reversion adjustments, as the contractual lives of its portfolio are shorter than its available forecast periods.
Given the size of the loan portfolio and the subjective nature of estimating the allowance for credit losses, auditing the allowance for credit losses involved a high degree of auditor judgment and an increased extent of effort.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the allowance for credit losses included the following, among others:
We tested the design and operating effectiveness of the relevant controls related to the (i) selection and weighting of the macroeconomic forecasts, (ii) execution and monitoring of the loss model, (iii) measurement of relevant qualitative factors and macroeconomic forecast loss estimate, (iv) determination of relevant assumptions, (v) completeness and accuracy of the data used in the estimate of expected credit losses, and (vi) calculation and disclosure of the allowance for credit losses.
We tested the completeness and accuracy of the data used in the estimate of expected credit losses.
We tested the allowance model by utilizing credit specialists to assist in performing model technical reviews, evaluating the relevance of the model in the current environment, testing the mathematical integrity of the model, evaluating the model’s loan segmentation and credit risk drivers.
We evaluated management’s documentation over loss forecasting methodology and tested the reasonableness of assumptions used.
We evaluated whether the macroeconomic forecasts used were consistent with independent data and evidence obtained in other areas of the audit.
/s/ DELOITTE & TOUCHE LLP
Charlotte, North Carolina
February 20, 2026
We have served as the Company's auditor since 2022.
Regional Management Corp. | 2025 Annual Report on Form 10-K | 61
Table of Contents
Report of Independent Registered Public Accounting Firm
To the stockholders and the Board of Directors of Regional Management Corp.
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Regional Management Corp. and subsidiaries (the “Company”) as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2025, of the Company and our report dated February 20, 2026, expressed an unqualified opinion on those financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Auditor’s Unqualified Report on Financial Statements. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ DELOITTE & TOUCHE LLP
Charlotte, North Carolina
February 20, 2026
Regional Management Corp. | 2025 Annual Report on Form 10-K | 62
Table of Contents
Regional Management Corp. and Subsidiaries
Consolidated B alance Sheets
(in thousands, except par value amounts)
December 31,
Assets
Cash
Net finance receivables
Unearned insurance premiums
Allowance for credit losses
Net finance receivables, less unearned insurance premiums and
allowance for credit losses
Restricted cash
Lease assets
Intangible assets
Restricted AFS investments
Property and equipment
Deferred tax assets, net
Other assets
Total assets
Liabilities and Stockholders’ Equity
Liabilities:
Debt
Unamortized debt issuance costs
Net debt
Lease liabilities
Deferred tax liability, net
Accounts payable and accrued expenses
Total liabilities
Commitments and contingencies (Note 17)
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, 15,168 shares issued and 9,554 shares outstanding at December 31, 2025 and 14,921 shares issued and 10,010 shares outstanding at December 31, 2024)
Additional paid-in capital
Retained earnings
Accumulated other comprehensive income (loss)
Treasury stock ( 5,614 shares at December 31, 2025 and 4,911 shares at December 31, 2024)
Total stockholders’ equity
Total liabilities and stockholders’ equity
Regional Management Corp. | 2025 Annual Report on Form 10-K | 63
Table of Contents
Regional Management Corp. and Subsidiaries
Consolidated State ments of Comprehensive Income
(in thousands, except per share amounts)
Year Ended December 31,
Revenue
Interest and fee income
Insurance income, net
Other income
Total revenue
Expenses
Provision for credit losses
Personnel
Occupancy
Marketing
Other
Total general and administrative expenses
Interest expense
Income before income taxes
Income taxes
Net income
Net income per common share:
Basic
Diluted
Weighted-average common shares outstanding:
Basic
Diluted
Other comprehensive income (loss), net of tax
Unrealized income (loss) on restricted AFS investments
Income taxes on unrealized items
Unrealized other comprehensive income (loss), net of tax
Net realized loss on restricted AFS investments
Income taxes on realized items
Reclassification adjustments included in net income, net of tax
Other comprehensive income (loss), net of tax
Total comprehensive income
See accompanying notes to consolidated financial statements.
Regional Management Corp. | 2025 Annual Report on Form 10-K | 64
Table of Contents
Regional Management Corp. and Subsidiaries
Consolidated Statements of Stockholders’ Equity
(in thousands)
As of and for the Year Ended December 31, 2025
Accumulated
Common Stock
Additional Paid-In
Retained
Other Comprehensive
Treasury
Shares
Amount
Capital
Earnings
Income (Loss)
Stock
Total
Beginning balance
Cash dividends
Issuance of restricted stock
Exercise of stock options
Repurchase of common stock
Shares withheld related to net share settlement
Share-based compensation
Net income
Other comprehensive loss
Ending balance
As of and for the Year Ended December 31, 2024
Accumulated
Common Stock
Additional Paid-In
Retained
Other Comprehensive
Treasury
Shares
Amount
Capital
Earnings
Income (Loss)
Stock
Total
Beginning balance
Cash dividends
Issuance of restricted stock
Exercise of stock options
Repurchase of common stock
Shares withheld related to net share settlement
Share-based compensation
Net income
Other comprehensive income
Ending balance
As of and for the Year Ended December 31, 2023
Accumulated
Common Stock
Additional Paid-In
Retained
Other Comprehensive
Treasury
Shares
Amount
Capital
Earnings
Income (Loss)
Stock
Total
Beginning balance
Cash dividends
Issuance of restricted stock
Exercise of stock options
Shares withheld related to net share settlement
Share-based compensation
Net income
Other comprehensive income
Ending balance
See accompanying notes to consolidated financial statements.
Regional Management Corp. | 2025 Annual Report on Form 10-K | 65
Table of Contents
Regional Management Corp. and Subsidiaries
Consolidated Stateme nts of Cash Flows
(in thousands)
Year Ended December 31,
Cash flows from operating activities:
Net income
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses
Depreciation and amortization
Amortization of deferred origination fees and costs
Loss on disposal of intangibles, property, and equipment
Loss on sale of restricted AFS investments
Share-based compensation
Deferred income taxes, net
Changes in operating assets and liabilities:
Increase (decrease) in unearned insurance premiums
(Increase) decrease in lease assets
(Increase) decrease in other assets
Increase (decrease) in accounts payable and accrued expenses
Increase (decrease) in lease liabilities
Net cash provided by operating activities
Cash flows from investing activities:
Originations of finance receivables
Repayments of finance receivables
Purchases of intangible assets
Purchases of property and equipment
Purchases of restricted AFS investments
Proceeds from sale of restricted AFS investments
Proceeds from maturities of restricted AFS investments
Net cash used in investing activities
Cash flows from financing activities:
Advances on revolving credit facilities
Payments on revolving credit facilities
Advances on securitizations
Payments on securitizations
Payments for debt issuance costs
Taxes paid related to net share settlement of equity awards
Cash dividends
Repurchases of common stock
Proceeds from exercise of stock options
Net cash provided by financing activities
Net change in cash and restricted cash
Cash and restricted cash at beginning of period
Cash and restricted cash at end of period
Supplemental cash flow information:
Interest paid
Income taxes paid
Operating leases paid
Non-cash lease assets obtained in exchange for operating lease liabilities
Regional Management Corp. | 2025 Annual Report on Form 10-K | 66
Table of Contents
The following table reconciles cash and restricted cash from the Consolidated Balance Sheets to the statements above:
December 31, 2025
December 31, 2024
December 31, 2023
Cash
Restricted cash
Total
See accompanying notes to consolidated financial statements.
Regional Management Corp. | 2025 Annual Report on Form 10-K | 67
Table of Contents
Regional Management Corp. and Subsidiaries
Notes to Consolidated Financial Statements
Note 1. Nature of Business
The Company was incorporated and began operations in 1987. The Company is engaged in the consumer finance business, offering large loans, small loans, and related payment and collateral protection insurance products. As of December 31, 2025, the Company operated under the name “Regional Finance” online and in branch locations in 19 states across the United States.
The Company’s large loan receivables are direct loans to customers, some of which are convenience check receivables and the vast majority of which are secured by non-essential household goods, automobiles, and/or other vehicles. Convenience checks are direct loans originated by mailing checks to customers based on a pre-screening process that includes a review of the prospective customer’s credit profile provided by national credit reporting bureaus or data aggregators. A recipient of a convenience check is able to enter into a loan by endorsing and depositing or cashing the check. The Company’s small loan portfolio is comprised of branch small loan receivables and convenience check receivables. Branch small loan receivables are direct loans to customers and are secured by non-essential household goods and, in some instances, an automobile.
The Company’s loan volume and contractual delinquency follow seasonal trends. Demand for the Company’s loans is typically highest during the second, third, and fourth quarters, which the Company believes is largely due to customers borrowing money for vacation, back-to-school, and holiday spending. Loan demand has generally been the lowest during the first quarter, which the Company believes is largely due to the timing of income tax refunds. Delinquencies generally reach their lowest point in the first half of the year and rise in the second half of the year. Changes in quarterly growth or liquidation could result in larger allowance for credit loss releases in periods of portfolio liquidation and larger provisions for credit losses in periods of portfolio growth. Consequently, the Company experiences seasonal fluctuations in its operating results. However, changes in macroeconomic factors, including inflation, higher interest rates, and geopolitical conflict, have impacted the Company’s typical seasonal trends for loan volume and delinquency.
Note 2. Significant Accounting Policies
The following is a description of significant accounting policies used in preparing the financial statements. The accounting and reporting policies of the Company are in accordance with GAAP.
Business segments: The Company has one reportable segment, which is the consumer finance segment.
Principles of consolidation: The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The Company operates through a separate wholly owned subsidiary in each state. The Company also consolidates VIEs when it is considered to be the primary beneficiary of the VIE because it has (i) power over the significant activities of the VIE and (ii) the obligation to absorb losses or the right to receive returns that could be significant to the VIE.
Variable interest entities: The Company transfers pools of loans to SPEs to secure debt for general funding purposes. These entities have the limited purpose of acquiring finance receivables, in addition to holding and making payments on the related debts. Assets transferred to each SPE are legally isolated from the Company and its affiliates, as well as the claims of the Company’s and its affiliates’ creditors. Further, the assets of each SPE are owned by such SPE and are not available to satisfy the debts or other obligations of the Company or any of its affiliates. The Company continues to service the finance receivables transferred to the SPEs. The lenders and investors in the debt issued by the SPEs generally only have recourse to the assets of the SPEs and do not have recourse to the general credit of the Company.
The SPEs’ debt arrangements are structured to provide credit enhancements to the lenders and investors, which may include overcollateralization, subordination of interests, excess spread, and reserve funds. These enhancements, along with the isolated finance receivables pools, increase the creditworthiness of the SPEs above that of the Company as a whole. This increases the marketability of the Company’s collateral for borrowing purposes, leading to more favorable borrowing terms, improved interest rate risk management, and additional flexibility to grow the business.
The SPEs are considered VIEs under GAAP and are consolidated into the financial statements of their primary beneficiary. The Company is considered to be the primary beneficiary of the SPEs because it has (i) power over the significant activities through its role as servicer of the finance receivables under each debt arrangement, (ii) the obligation to absorb losses that could be significant through note investment, if applicable, and (iii) the obligation to absorb losses or the right to receive returns that could be significant through the Company’s interest in the monthly residual cash flows of the SPEs.
Regional Management Corp. | 2025 Annual Report on Form 10-K | 68
Table of Contents
Consolidation of VIEs results in these transactions being accounted for as secured borrowings; therefore, the pooled receivables and the related debts remain on the consolidated balance sheet of the Company. Each debt is secured solely by the assets of the VIEs and not by any other assets of the Company. The assets of the VIEs are the only source of funds for repayment on each debt, and restricted cash held by the VIEs can only be used to support payments on the debt. The Company recognizes revenue and provision for credit losses on the finance receivables of the VIEs and interest expense on the related secured debt.
Use of estimates: The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and disclosure of contingent assets and liabilities for the periods indicated in the financial statements. Actual results could differ from those estimates.
Estimates that are susceptible to change relate to the determination of the allowance for credit losses, the valuation of deferred tax assets and liabilities, and the fair value of financial instruments.
Recent accounting pronouncements: In December 2023, the FASB issued ASU 2023-09, enhancing the transparency and decision usefulness of income tax disclosures. The amendment, among other things, improves transparency of income tax disclosures by requiring more consistent categories and greater disaggregation of information in rate reconciliations, and disaggregation of income taxes paid by jurisdiction. The amendments in this update are effective for annual periods beginning after December 15, 2024. The Company adopted and applied the update on a retrospective basis for all prior periods presented in the financial statements, and upon transition, the disaggregation of tax disclosures disclosed in the prior periods are based on the tax categories identified and disclosed in the period of adoption, if applicable. Implementation of the update did not have a financial effect on the Company’s consolidated financial statements. See Note 14, “Income Taxes,” for the Company’s enhanced disclosures to reflect the adoption of this update.
In November 2024, the FASB issued ASU 2024-03, enhancing the disclosures about a company’s expenses. The amendment, among other things, improves these disclosures by requiring disaggregated expense information about a company’s expense types. The amendments in this update are effective for annual periods beginning after December 15, 2026, and early adoption is permitted. The enhanced expense guidance can be applied on either a prospective (for financial statements issued during reporting periods after the effective date of this ASU) or retrospective (to any or all prior periods presented) basis. The Company is currently evaluating the impact of this update on its consolidated financial statements.
In September 2025, the FASB issued ASU 2025-06, amending the criteria for capitalization of internal-use software costs. The amendment, among other things, removes references to development stages and requires consideration of whether significant development uncertainty is present as part of the recognition threshold. The amendments in this update are effective for annual periods beginning after December 15, 2027, and early adoption is permitted as of the beginning of an annual reporting period. The amended guidance can be applied on a prospective, modified, or retrospective basis. The Company is currently evaluating the impact of this update on its consolidated financial statements.
Treasury stock: The Company records the repurchase of shares of its common stock at cost on the settlement date of the transaction. These shares are considered treasury stock, which is a reduction to stockholders’ equity. Treasury stock is included in authorized and issued shares but excluded from outstanding shares.
Net finance receivables: Generally, the Company classifies finance receivables as held for investment based on management’s intent at the time of origination. The Company determines classification on a receivable-by-receivable basis. The Company classifies finance receivables as held for investment due to its ability and intent to hold them until their contractual maturities. Net finance receivables consist of the Company’s installment loans. The Company carries net finance receivables at amortized cost, which includes remaining principal balance, accrued interest, and net unamortized deferred origination costs and unamortized fees.
Loan renewals are a significant piece of new volume and are considered a terminal event of the previous loan. The Company may renew delinquent secured or unsecured loan accounts if the customer meets the Company’s underwriting criteria and it does not appear the cause of past delinquency will affect the customer’s ability to repay the renewed loan.
Delinquency: The Company determines past due status using the contractual terms of the finance receivable. Delinquency is one of the primary credit quality indicators used to evaluate the allowance for credit losses for each class of finance receivables.
Finance receivable origination fees and costs: Non-refundable fees received and direct costs (personnel and digital loan origination costs) incurred for the origination of finance receivables are deferred and recognized to interest income over their contractual lives
Regional Management Corp. | 2025 Annual Report on Form 10-K | 69
Table of Contents
using the constant yield method. Unamortized amounts are recognized in interest income at the time that finance receivables are paid in full or renewed.
Nonaccrual status: Accrual of interest income on finance receivables is suspended when an account becomes 90 days delinquent. If the account is charged off, the accrued interest income is reversed as a reduction of interest and fee income. Interest received on such loans is accounted for on the cash-basis method, until qualifying for return to accrual. Under the cash-basis method, interest income is recorded when the payment is received. Generally, loans resume accruing interest when the past due status is brought below 90 days. Certain loan modification programs allow for past due status to be brought current but remain in nonaccrual status until payment activity is re-established. The Company made a policy election to not record an allowance for credit losses related to accrued interest because it has nonaccrual and charge-off policies that result in the timely suspension and reversal of accrued interest.
Allowance for credit losses: The allowance for credit losses is based on historical credit experience, current conditions, and reasonable and supportable economic forecasts. The historical loss experience is adjusted for quantitative and qualitative factors that are not fully reflected in the historical data. In determining its estimate of expected credit losses, the Company evaluates information related to credit metrics, changes in its lending strategies and underwriting practices, and the current and forecasted direction of the economic and business environment. These metrics include, but are not limited to, loan portfolio mix and growth, unemployment, credit loss trends, delinquency trends, changes in underwriting, and operational risks.
The Company selected a PD / LGD model to estimate its base allowance for credit losses, in which the estimated loss is equal to the product of PD and LGD. Historical net finance receivables are tracked over the term of the pools to identify the incidences of loss (PDs) and the average severity of losses (LGDs).
To enhance the precision of the allowance for credit loss estimate, the Company evaluates its finance receivable portfolio on a pool basis and segments each pool of finance receivables with similar credit risk characteristics. As part of its evaluation, the Company considers loan portfolio characteristics such as product type, loan size, loan term, internal or external credit scores, delinquency status, geographical location, and vintage. Based on analysis of historical loss experience, the Company selected the following segmentation: product type, FICO score, and delinquency status.
As finance receivables are originated, provisions for credit losses are recorded in amounts sufficient to maintain an allowance for credit losses at an adequate level to provide for estimated losses over the contractual life of the finance receivables (considering the effect of prepayments). Subsequent changes to the contractual terms that are a result of re-underwriting are not included in the finance receivable’s contractual life (considering the effect of prepayments). The Company uses its segmentation loss experience to forecast expected credit losses. Historical information about losses generally provides a basis for the estimate of expected credit losses. The Company also considers the need to adjust historical information to reflect the extent to which current conditions differ from the conditions that existed for the period over which historical information was evaluated. These adjustments to historical loss information may be qualitative or quantitative in nature.
Reasonable and supportable macroeconomic forecasts are required for the Company’s allowance for credit loss model. The Company engaged a major rating service to assist with compiling a reasonable and supportable forecast. The Company reviews macroeconomic forecasts to use in its allowance for credit losses. The Company adjusts the historical loss experience by relevant qualitative factors for these expectations. The Company does not require reversion adjustments, as the contractual lives of its portfolio are shorter than its available forecast periods.
The Company charges credit losses against the allowance for all products when an account reaches 180 days contractually delinquent, subject to certain exceptions. The Company’s customer accounts without a lien on a vehicle in a confirmed bankruptcy are charged off in the month following the bankruptcy notification or at 60 days contractually delinquent, subject to certain exceptions. Deceased borrower accounts are charged off in the month following the proper notification of passing, with the exception of borrowers with credit life insurance. Subsequent recoveries of amounts charged off, if any, are credited to the allowance.
Property and equipment: Leasehold improvements are depreciated over the shorter of their useful lives or the remaining term of the lease. Furniture and equipment are depreciated on the straight-line method over their estimated useful lives, generally five to ten years . Maintenance and repairs are charged to expense as incurred.
Leases: The Company leases its current headquarters building. Branch offices are leased under non-cancellable leases of three to seven years with renewal options. The Company’s lease liability is based on the present value of the remaining minimum rental payments using a discount rate that is based on the Company’s incremental borrowing rate on its senior revolving credit facility. The Company’s lease asset includes right-of-use assets equaling the lease liability, net of prepaid rent and deferred rents that existed as
Regional Management Corp. | 2025 Annual Report on Form 10-K | 70
Table of Contents
of the adoption of the current lease accounting standard. In addition to rent, the Company typically pays for all operating expenses, property taxes, and repairs and maintenance.
The Company assesses its leased assets for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. If a lease is impaired, the impairment loss is recognized in lease costs and the right-of-use asset is reduced to the impaired value.
Lease agreements with terms of twelve months or less are not capitalized as part of lease assets or liabilities and are expensed as incurred. The Company accounts for each separate lease component of a contract and its associated non-lease components as a single lease component for its branch leases. The Company has elected not to apply this policy in relation to the corporate headquarters lease. The Company has also determined that it is reasonably certain that the first option to extend lease contracts will be exercised for new branch locations; therefore, the first option to extend is included in the lease asset and liability calculation.
Restricted cash: Restricted cash includes cash and cash equivalents for which the Company’s ability to withdraw funds is contractually limited. The Company’s restricted cash consists of cash reserves that are maintained as collateral for potential credit life insurance claims and cash restricted for debt servicing of the Company’s revolving warehouse credit facilities and securitizations.
Restricted AFS investments: The Company classifies its investments in debt securities that were purchased with the Company’s restricted cash as restricted AFS investments and carries the investments at fair value. Unrealized gains and losses, net of taxes, are excluded from earnings and reported in other comprehensive income or loss until realized. The unrealized gains and losses, net of taxes, are recorded on the consolidated balance sheet in accumulated other comprehensive income or loss in stockholders’ equity. Realized gains and losses from the sale of AFS investments are specifically identified and reclassified from accumulated other comprehensive income or loss and included within earnings on the consolidated statement of income.
Income recognition: Interest income is recognized using the interest method (constant yield method). Therefore, the Company recognizes revenue from interest at an equal rate over the term of the loan. Unearned finance charges on pre-compute contracts are rebated to customers utilizing statutory methods, which in many cases is the sum-of-the-years’ digits method. The difference between income recognized under the constant yield method and the statutory method is recognized as an adjustment to interest income at the time of rebate.
The Company recognizes income on credit life insurance, credit personal property insurance, and vehicle single interest insurance using the sum-of-the-years’ digits or straight-line methods over the terms of the policies. The Company recognizes income on credit accident and health insurance using the average of the sum-of-the-years’ digits and the straight-line methods over the terms of the policies. The Company recognizes income on credit involuntary unemployment insurance using the straight-line method over the terms of the policies. Rebates are computed using statutory methods, which in many cases match the GAAP method, and where it does not match, the difference between the GAAP method and the statutory method is recognized in income at the time of rebate. Fee income for non-file insurance is recognized using the sum-of-the-years’ digits method over the loan term.
Charges for late fees are recognized as income when collected.
Share-based compensation: The Company measures compensation expense for share-based awards at estimated fair value and recognizes compensation expense over the service period for awards expected to vest. In addition, compensation expense for certain performance awards may be impacted by the probability of certain financial goals being achieved over the relevant performance period. The Company uses the closing stock price on the date of grant as the fair value of RSAs, performance-contingent RSUs, and service-based RSUs. The fair value of NQSOs is determined using the Black-Scholes valuation model, and the fair value of PRSUs is determined using the Monte Carlo valuation model. When applicable, the Black-Scholes and Monte Carlo models require the input of assumptions, including expected volatility, expected dividends, expected term, risk-free interest rate, and a discount associated with post-vest holding restrictions, changes to which can affect the fair value estimate. Expected volatility is based on the Company’s historical stock price volatility. Expected dividends are calculated using the expected dividend yield (annualized dividends divided by the grant date stock price). The expected term is calculated by using the simplified method (average of the vesting and original contractual terms) due to insufficient historical data to estimate the expected term. The risk-free rate is based on the zero-coupon U.S. Treasury bond rate over the expected term of the awards. The estimated discount associated with post-vest holding restrictions is calculated using a blend of the Finnerty and Chaffe models. In addition, the estimation of share-based awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from current estimates, such amounts will be recorded as a cumulative adjustment in the period estimates are revised.
Regional Management Corp. | 2025 Annual Report on Form 10-K | 71
Table of Contents
The Company allows for the settlement of share-based awards on a net share basis. With net share settlement, the employee does not surrender any cash or shares upon the exercise of stock options or the vesting of stock awards or stock units. Rather, the Company withholds the number of shares with a value equivalent to the option exercise price (for stock options) and the statutory tax withholding (for all share-based awards). Net share settlements have the effect of reducing the number of shares that would have otherwise been issued as a result of exercise or vesting.
The Company issues PRSUs, service-based RSUs, and RSAs to certain members of senior management under the Company’s LTIP. Recurring annual grants are made at the discretion of the Board. The annual grants are subject to cliff- and graded-vesting, generally concluding at the end of the third calendar year and subject to continued employment or as otherwise provided in the underlying award agreements. Vested PRSUs are subject to an additional one-year holding period following the vesting date. The actual value of the PRSUs that may be earned can range from 0 % to 150 % of target based on relative total shareholder return, plus an additive 20 % based on pre-provision return on assets over the performance period, resulting in a maximum payout of 170 %. PRSUs granted prior to 2025 may earn 0 % to 150 % of target based on achievement of total shareholder return performance concluding at the end of the third calendar year .
The Company also has a KTIP for certain other members of senior management. Recurring annual participation in the program is at the discretion of the Board and executive management. The annual grants are subject to graded-vesting, generally concluding at the end of the third calendar year and subject to continued employment or as otherwise provided in the underlying award agreements. Prior to 2024, the annual grant was subject to performance over a one-year period. Payout under the program ranged from 0 % to 150 % of target based on the achievement of five Company performance metrics and individual performance goals (subject to continued employment and certain other terms and conditions of the program). If earned, an RSA was issued following the one-year performance period that vested ratably over a subsequent two-year period (subject to continued employment or as otherwise provided in the underlying award agreement).
From time to time, the Company issues stock awards and other long-term incentive awards in conjunction with employment offers to select new employees and retention grants to select existing employees. The Company issues these awards to attract and retain talent and to provide market competitive compensation. The grants have various vesting terms, including fully-vested awards at the grant date, cliff-vesting, and graded-vesting over periods of up to five years (subject to continued employment or as otherwise provided in the underlying award agreements).
The Company awards its non-employee directors a cash retainer and shares of restricted common stock. The RSAs are granted on the fifth business day following the Company’s annual meeting of stockholders and fully vest upon the earlier of the first anniversary of the grant date or the completion of the directors’ annual service to the Company (so long as the period between the date of the annual stockholders’ meeting related to the grant date and the date of the next annual stockholders’ meeting is not less than 50 weeks).
The exercise price of all stock options is equal to the Company’s closing stock price on the date of grant. Stock options are subject to various vesting terms, including graded- and cliff-vesting over periods of up to five years . In addition, stock options vest and become exercisable in full or in part under certain circumstances, including following the occurrence of a change of control (as defined in the option award agreements). Participants who are awarded options must exercise their options within a maximum of ten years of the grant date.
Marketing costs: Marketing costs are expensed as incurred.
Income taxes: The Company records a tax provision for the anticipated tax consequences of its reported operating results. The provision for income taxes is computed using the asset and liability method, under which deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effects of future tax rate changes are recognized in the period when the enactment of new rates occurs.
The Company recognizes the financial statement effects of a tax position when it is more likely than not, based on technical merits, the position will be sustained upon examination. The tax benefits of the position recognized in the consolidated financial statements are then measured based on the largest amount of benefit that is greater than 50% likely to be realized upon settlement with a taxing authority.
The Company recognizes the tax benefits or deficiencies from the exercise or vesting of share-based awards in the income tax line of the consolidated statements of comprehensive income, in the period of exercise or vesting.
Regional Management Corp. | 2025 Annual Report on Form 10-K | 72
Table of Contents
Earnings per share: Earnings per share have been computed based on dividing net income by the weighted-average number of common shares outstanding during each reporting period presented. Common shares issuable upon the exercise of share-based compensation, which are computed using the treasury stock method, are included in the computation of diluted earnings per share. The Company uses the treasury stock method to calculate the effect of outstanding awards, by computing total employee proceeds as the sum of the amount employees must pay upon exercise of the awards and the amount of unearned share-based compensation costs attributable to future services.
Note 3. Concentrations of Credit Risk
As of December 31, 2025, customers living in Texas and North Carolina accounted for 30 % and 15 % , respectively, of the Company’s net finance receivables. Customers living in Texas, North Carolina, and South Carolina accounted for 30 %, 16 %, and 10 %, respectively, of the Company’s net finance receivables as of December 31, 2024. Given the primary concentration of the Company’s portfolio of finance receivables in these states, such customers’ ability to honor their installment contracts may be affected by economic conditions in these states.
The Company maintains amounts in bank accounts which, at times, may exceed federally insured limits. The Company has not experienced losses in such accounts, which are maintained with large domestic banks. Management believes the Company’s exposure to credit risk is minimal for these accounts.
Note 4. Finance Receivables, Credit Quality Information, and Allowance for Credit Losses
Net finance receivables for the periods indicated consisted of the following:
December 31,
Dollars in thousands
Large loans
Small loans
Total
Net finance receivables included net deferred origination fees of $ 15.1 million and $ 15.7 million as of December 31, 2025 and 2024, respectively.
The credit quality of the Company’s finance receivable portfolio is dependent on the Company’s ability to enforce sound underwriting standards, maintain diligent servicing of the portfolio, and respond to changing economic conditions as it manages and grows its portfolio. The allowance for credit losses uses FICO scores and delinquency as key data points in estimating the allowance. The Company uses six FICO band categories to assess FICO scores. The first three FICO band categories include subprime FICO scores below 620. The fourth and fifth FICO band categories include near-prime FICO scores ranging from 620 to 659. The sixth FICO band category includes prime FICO scores of 660 or higher.
Regional Management Corp. | 2025 Annual Report on Form 10-K | 73
Table of Contents
Net finance receivables by product, FICO band at origination, and origination year as of December 31, 2025 are as follows:
Net Finance Receivables by Origination Year
Dollars in thousands
Prior
Total Net Finance Receivables
Large Loans:
FICO Band
Total
Small Loans:
FICO Band
Total
Total Loans:
FICO Band
Total
Regional Management Corp. | 2025 Annual Report on Form 10-K | 74
Table of Contents
Net finance receivables by product, FICO band at origination, and origination year as of December 31, 2024 are as follows:
Net Finance Receivables by Origination Year
Dollars in thousands
Prior
Total Net Finance Receivables
Large Loans:
FICO Band
Total
Small Loans:
FICO Band
Total
Total Loans:
FICO Band
Total
Regional Management Corp. | 2025 Annual Report on Form 10-K | 75
Table of Contents
Credit losses by product and origination year for the periods indicated are as follows:
Year Ended December 31, 2025
Dollars in thousands
Prior
Total Credit Losses
Large loans
Small loans
Total
Year Ended December 31, 2024
Dollars in thousands
Prior
Total Credit Losses
Large loans
Small loans
Total
The contractual delinquency of the net finance receivable portfolio by product and aging for the periods indicated are as follows:
December 31, 2025
Large
Small
Total
Dollars in thousands
Current
1 to 29 days past due
Delinquent accounts:
30 to 59 days
60 to 89 days
90 to 119 days
120 to 149 days
150 to 179 days
Total delinquency
Total net finance receivables
Net finance receivables in nonaccrual status
December 31, 2024
Large
Small
Total
Dollars in thousands
Current
1 to 29 days past due
Delinquent accounts:
30 to 59 days
60 to 89 days
90 to 119 days
120 to 149 days
150 to 179 days
Total delinquency
Total net finance receivables
Net finance receivables in nonaccrual status
The accrual of interest income on finance receivables is suspended when an account becomes 90 days delinquent. If a loan is charged off, the accrued interest is reversed as a reduction of interest and fee income. The Company reversed $ 27.6 million , $ 23.6 million , and $ 24.2 million of accrued interest as a reduction of interest and fee income for the years ended December 31, 2025, 2024, and 2023, respectively.
Regional Management Corp. | 2025 Annual Report on Form 10-K | 76
Table of Contents
The following are changes in the allowance for credit losses by product for the periods indicated:
As of and For the Year Ended December 31, 2025
Dollars in thousands
Large
Small
Total
Beginning balance
Provision for credit losses
Credit losses
Recoveries
Ending balance
Net finance receivables
Allowance as percentage of net finance receivables
As of and For the Year Ended December 31, 2024
Dollars in thousands
Large
Small
Total
Beginning balance
Provision for credit losses
Credit losses
Recoveries
Ending balance
Net finance receivables
Allowance as percentage of net finance receivables
As of and For the Year Ended December 31, 2023
Dollars in thousands
Large
Small
Total
Beginning balance
Provision for credit losses
Credit losses
Recoveries
Ending balance
Net finance receivables
Allowance as percentage of net finance receivables
The Company uses certain loan modification programs for borrowers experiencing financial difficulties as a loss mitigation strategy to improve collectability of the loans and assist customers through financial setbacks. The programs consist of offering payment deferrals, refinancing, and, in limited instances, settlements. Customers may also pursue financial assistance through external sources, such as filing for bankruptcy protection. Modification programs available to our customers are described in more detail below:
Customers with temporary hardships may be offered payment deferrals related to past due payments. Such deferrals extend the customer’s maturity date and are generally considered insignificant delays, unless the deferral exceeds three deferrals in a rolling twelve-month period.
Customers with delinquent loans who meet certain criteria are eligible to receive a reduced interest rate and/or term extension, making the monthly payments more affordable.
The Company may also agree to settle a past-due loan by accepting less than the full principal balance owed, in certain limited cases, once it is determined that collection of the entire outstanding balance is unlikely.
Customers who receive bankruptcy protection may receive principal forgiveness, interest rate reductions, and/or term extensions.
Regional Management Corp. | 2025 Annual Report on Form 10-K | 77
Table of Contents
The information relating to modifications made to borrowers experiencing financial difficulty and their related percentage of applicable net finance receivables for the periods indicated are as follows:
As of and for the Year Ended December 31, 2025
Large
Small
Total
Dollars in thousands
Interest rate reduction
Interest rate reduction & term extension
Term extension
Principal forgiveness, interest rate reduction, & term extension
Total
As of and for the Year Ended December 31, 2024
Large
Small
Total
Dollars in thousands
Interest rate reduction
Interest rate reduction & term extension
Term extension
Principal forgiveness, interest rate reduction, & term extension
Total
As of and for the Year Ended December 31, 2023
Large
Small
Total
Dollars in thousands
Interest rate reduction & term extension
Term extension
Principal forgiveness, interest rate reduction, & term extension
Total
The financial effects of the modifications made to borrowers experiencing financial difficulty for the periods indicated are as follows:
Year Ended December 31, 2025
Loan Modification
Product
Financial Effect
Interest rate reduction
Large loans
Reduced the weighted-average contractual interest rate by 18.0 %.
Small loans
Reduced the weighted-average contractual interest rate by 29.5 %.
Term extension
Large loans
Added a weighted-average 1.5 years to the life of loans.
Small loans
Added a weighted-average 1.4 years to the life of loans.
Principal forgiveness
Large loans
Reduced the amortized cost basis of the loans by $ 1.1 million.
Small loans
Reduced the amortized cost basis of the loans by $ 0.4 million.
Year Ended December 31, 2024
Loan Modification
Product
Financial Effect
Interest rate reduction
Large loans
Reduced the weighted-average contractual interest rate by 12.6 %.
Small loans
Reduced the weighted-average contractual interest rate by 24.4 %.
Term extension
Large loans
Added a weighted-average 1.5 years to the life of loans.
Small loans
Added a weighted-average 1.4 years to the life of loans.
Principal forgiveness
Large loans
Reduced the amortized cost basis of the loans by $ 1.3 million.
Small loans
Reduced the amortized cost basis of the loans by $ 0.5 million.
Regional Management Corp. | 2025 Annual Report on Form 10-K | 78
Table of Contents
Year Ended December 31, 2023
Loan Modification
Product
Financial Effect
Interest rate reduction
Large loans
Reduced the weighted-average contractual interest rate by 10.7 %.
Small loans
Reduced the weighted-average contractual interest rate by 13.6 %.
Term extension
Large loans
Added a weighted-average 1.5 years to the life of loans.
Small loans
Added a weighted-average 1.4 years to the life of loans.
Principal forgiveness
Large loans
Reduced the amortized cost basis of the loans by $ 1.0 million.
Small loans
Reduced the amortized cost basis of the loans by $ 0.5 million.
The following tables provide the amortized cost basis for modifications made to borrowers experiencing financial difficulty within the previous twelve months that subsequently defaulted. The Company defines payment default as 90 days past due for this disclosure. The respective amounts for each modification for the periods indicated are as follows:
As of and for the Year Ended December 31, 2025
Dollars in thousands
Large
Small
Total
Interest rate reduction
Interest rate reduction & term extension
Term extension
Principal forgiveness, interest rate reduction, & term extension
Total
As of and for the Year Ended December 31, 2024
Dollars in thousands
Large
Small
Total
Interest rate reduction
Interest rate reduction & term extension
Term extension
Principal forgiveness, interest rate reduction, & term extension
Total
As of and for the Year Ended December 31, 2023
Dollars in thousands
Large
Small
Total
Interest rate reduction
Interest rate reduction & term extension
Term extension
Principal forgiveness, interest rate reduction, & term extension
Total
Regional Management Corp. | 2025 Annual Report on Form 10-K | 79
Table of Contents
The contractual delinquencies of loans that were modified to borrowers experiencing financial difficulty within the previous twelve months for the periods indicated are as follows:
December 31, 2025
Dollars in thousands
Large
Small
Total
Current
30 - 89 days past due
90+ days past due
Total (1)
(1) Excludes modified finance receivables that subsequently charged off of $ 3.3 million and $ 1.3 million in large and small loans, respectively .
December 31, 2024
Dollars in thousands
Large
Small
Total
Current
30 - 89 days past due
90+ days past due
Total (1)
(1) Excludes modified finance receivables that subsequently charged off of $ 1.4 million and $ 0.2 million in large and small loans, respectively.
Note 5. Restricted Available-for-Sale Investments
The following tables reconcile the amortized cost, gross unrealized gains and losses included in accumulated other comprehensive income or loss, and estimated fair value of the Company’s restricted AFS investments as of the periods indicated:
December 31, 2025
Dollars in thousands
Amortized Cost
Gross Unrealized Gains
Gross Unrealized Losses
Estimated Fair Value
Restricted investments
December 31, 2024
Dollars in thousands
Amortized Cost
Gross Unrealized Gains
Gross Unrealized Losses
Estimated Fair Value
Restricted investments
The following tables include the gross unrealized losses and estimated fair values of restricted AFS investments that were in a continuous unrealized loss position, for which no allowance for credit loss has been recorded, as of the periods indicated:
December 31, 2025
Less than 12 Months
12 Months or Longer
Total
Dollars in thousands
Estimated Fair Value
Gross Unrealized Losses
Estimated Fair Value
Gross Unrealized Losses
Estimated Fair Value
Gross Unrealized Losses
Restricted investments
December 31, 2024
Less than 12 Months
12 Months or Longer
Total
Dollars in thousands
Estimated Fair Value
Gross Unrealized Losses
Estimated Fair Value
Gross Unrealized Losses
Estimated Fair Value
Gross Unrealized Losses
Restricted investments
The restricted AFS investments consist of U.S. Treasuries which are measured at fair value and include accrued interest receivables of $ 13 thousand at December 31, 2025 and 2024 . The investments consist of highly rated securities backed by the U.S. federal government. As a result, the Company has not recorded an allowance for credit losses related to the restricted AFS investments.
Regional Management Corp. | 2025 Annual Report on Form 10-K | 80
Table of Contents
The following tables include the amortized cost and estimated fair values of restricted AFS investments by contractual maturity as of the period indicated:
December 31, 2025
Dollars in thousands
Amortized Cost
Estimated Fair Value
Due in one year
Due within one year to five years
Due within five years to ten years
Due after ten years
Total
The Company had no gross realized gains or losses for both the years ended December 31, 2025 and 2023. The Company had gross realized losses of $ 20 thousand for the year ended December 31, 2024. For additional information on the Company's restricted AFS investments, see Note 13, “Fair Value Measurements.”
Note 6. Property and Equipment
For the periods indicated, property and equipment consisted of the following:
December 31,
Dollars in thousands
Furniture, fixtures, and equipment
Leasehold improvements
Property and equipment cost
Less accumulated depreciation
Property and equipment, net
Depreciation expense for the years ended December 31, 2025, 2024, and 2023 totaled $ 5.0 million , $ 4.8 million , and $ 4.6 million , respectively.
Note 7. Leases
The Company maintains lease agreements related to its branch network and for its corporate headquarters. The branch lease agreements range from three to seven years and generally contain options to extend from three to five years . The corporate headquarters lease agreement is for eleven years and contains options to extend for ten years . All of the Company’s lease agreements are considered operating leases. None of the Company’s lease payments are dependent on an index that may change after the commencement date.
The Company’s rent expense for the periods indicated is as follows:
Year Ended December 31,
Dollars in thousands
Operating leases
Short-term leases
Total
The Company’s weighted-average remaining lease term and discount rate for the periods indicated are as follows:
December 31,
Weighted-average remaining lease term (in years)
Weighted-average discount rate
Regional Management Corp. | 2025 Annual Report on Form 10-K | 81
Table of Contents
Future minimum lease payments on the Company’s lease liabilities are as follows:
Dollars in thousands
December 31, 2025
Thereafter
Total
Present value adjustment
Lease liability
Note 8. Intangible Assets
The following table provides the gross carrying amount and related accumulated amortization of intangible assets for the periods indicated:
December 31, 2025
December 31, 2024
Dollars in thousands
Gross Carrying Amount
Accumulated Amortization
Net Carrying Amount
Gross Carrying Amount
Accumulated Amortization
Net Carrying Amount
Software
Other
Total
Intangible amortization expense for the years ended December 31, 2025, 2024, and 2023 totaled $ 5.6 million , $ 4.4 million , and $ 3.7 million , respectively. As of December 31, 2025, the Company’s weighted-average amortization period for software was 6.0 years. The following table sets forth the future amortization of software:
Dollars in thousands
Amount
Thereafter
Total
Note 9. Other Assets
Other assets include the following as of the periods indicated:
December 31,
Dollars in thousands
Prepaid expenses
Income tax receivable
Credit insurance receivable
Card payments receivable
Warehouse credit facilities debt issue costs
Other
Total
Regional Management Corp. | 2025 Annual Report on Form 10-K | 82
Table of Contents
Note 10. Variable Interest Entities
As part of its overall funding strategy, the Company has transferred certain finance receivables to affiliated VIEs for asset-backed financing transactions, including securitizations. The Company’s revolving warehouse credit facilities and securitizations are issued by the Company’s SPEs, which are considered VIEs under GAAP and are consolidated into the financial statements of their primary beneficiary.
These debts are supported by the expected cash flows from the underlying collateralized finance receivables. Collections on these finance receivables are remitted to restricted cash collection accounts, which totaled $ 81.8 million and $ 117.1 million as of December 31, 2025 and December 31, 2024, respectively. Cash inflows from the finance receivables are distributed to the lenders/investors, the service providers, and/or the residual interest that the Company owns in accordance with a monthly contractual priority of payments. The SPEs pay a servicing fee to the Company, which is eliminated in consolidation. Distributions from the SPEs to the Company are permitted under the debt arrangements.
At each sale of receivables from the Company’s affiliates to the SPEs, the Company makes certain representations and warranties about the quality and nature of the collateralized receivables. The debt arrangements require the Company to repurchase the receivables in certain circumstances, including circumstances in which the representations and warranties made by the Company concerning the quality and characteristics of the receivables are inaccurate. Assets transferred to each SPE are legally isolated from the Company and its affiliates, as well as the claims of the Company’s and its affiliates’ creditors. Further, the assets of each SPE are owned by such SPE and are not available to satisfy the debts or other obligations of the Company or any of its affiliates.
The following table presents the assets and liabilities of the Company’s consolidated VIEs:
Dollars in thousands
December 31, 2025
December 31, 2024
Assets
Cash
Net finance receivables
Allowance for credit losses
Restricted cash
Other assets
Total assets
Liabilities
Net debt
Accounts payable and accrued expenses
Total liabilities
Note 11. Debt
The following is a summary of the Company’s debt as of the periods indicated:
December 31, 2025
December 31, 2024
Dollars in thousands
Debt
Unamortized Debt Issuance Costs (1)
Net Debt
Debt
Unamortized Debt Issuance Costs (1)
Net Debt
Revolving credit facilities
Securitizations
Total
Unused amount of revolving credit facilities (subject to borrowing base)
(1) Unamortized debt issuance costs related to the revolving warehouse credit facilities are presented within other assets in the consolidated balance sheets. These credit facilities had $ 1.8 million and $ 2.2 million in such costs as of December 31, 2025 and December 31, 2024 , respectively.
Revolving Credit Facilities: The Company’s revolving credit facilities are secured by substantially all of the Company’s finance receivables and equity interests of the majority of its subsidiaries. The Company pays unused commitment fees on its revolving credit
Regional Management Corp. | 2025 Annual Report on Form 10-K | 83
Table of Contents
facilities, generally based upon the average outstanding balance. As of December 31, 2025, the Company held $ 3.8 million in unrestricted cash. The Company had $ 145.3 million of immediate available liquidity to draw down cash under its revolving credit facilities as of December 31, 2025. Each of the Company’s revolving warehouse credit facilities holds restricted cash reserves to satisfy provisions of its respective credit agreement.
The following table includes the key terms under each of the Company’s revolving credit facilities as of December 31, 2025:
Dollars in thousands
Total Credit Facility
Debt Balance
Restricted Cash Reserves
Advance Rate Cap
Current Advance Rate
Unused Commitment Fee
Revolving Period End Date
Maturity Date
Senior (1) (2)
Aug 2028
RMR IV warehouse (3)
May 2026
May 2027
RMR V warehouse
Nov 2026
Nov 2027
RMR VI warehouse (4)
Feb 2027
Feb 2028
RMR VII warehouse
Oct 2026
Total
(1) In August 2025, the Company entered into a loan agreement replacing the previous senior revolving credit facility of $ 355 million. In connection with the new facility, the Company terminated its senior revolving credit facility previously scheduled to mature in September 2025 . The new agreement, among other things, (i) provides for a senior revolving credit facility of up to $ 355 million (with an accordion provision that can expand up to $ 420 million); (ii) has a maturity date scheduled in August 2028 ; and (iii) updates the unused commitment fee to range between 0.3 % - 0.9 % based on daily average outstanding balance (previously ranging between 0.5 % - 1.0 %).
(2) The senior revolving credit facility has an additional advance rate cap of 60 % of eligible delinquent renewals. As of December 31, 2025, this advance rate was 50 % .
(3) Following a May 2025 amendment, the revolving period end date is now May 2026 (previously May 2025 ), the maturity date is now May 2027 (previously May 2026 ), and the unused commitment fee is now 0.5 % (previously ranging between 0.4 % - 0.7 %).
(4) Following a January 2025 amendment, the revolving period end date is now February 2027 (previously February 2025 ), and the maturity date is now February 2028 (previously February 2026 ).
Borrowings under the revolving credit facilities bear interest, payable monthly, at a rate equal to the sum of any applicable floor, benchmark adjustment, margin, and the market rate of each respective rate type that was effective as of December 31, 2025 (as follows):
Floor
Margin
Rate Type
Effective Interest Rate
Senior (1)
1-month SOFR
RMR IV warehouse (2)
1-month SOFR
RMR V warehouse
Conduit
RMR VI warehouse (3)
1-month SOFR
RMR VII warehouse
1-month SOFR
(1) Following the August 2025 agreement for a new senior revolving credit facility, the benchmark adjustment has been removed (previously 0.1 %), and the margin is now 2.8 % (previously 3.0 %).
(2) Following a May 2025 amendment, the benchmark adjustment has been removed (previously 0.1 %), and the margin is now 2.3 % (previously 2.8 %).
(3) Following a January 2025 amendment, (i) the margin was reduced to 2.1 % (previously 2.5 %) and (ii) interest may accrue based on the daily or 1-month SOFR (previously only the 1-month SOFR ).
Securitizations: From time to time, the Company and its SPE, RMR III, complete private offerings and sales of asset-backed notes through the Company’s Issuance Trusts. The asset-backed notes are secured by finance receivables and other related assets that RMR III purchased from the Company, which RMR III then sells and transfers to the Issuance Trusts. The Issuance Trusts hold restricted cash reserves to satisfy provisions of the transaction documents. Borrowings under the securitizations bear interest, payable monthly, and principal repayments begin the month subsequent to the end of the revolving period. Prior to maturity, the Company may redeem
Regional Management Corp. | 2025 Annual Report on Form 10-K | 84
Table of Contents
the notes in full, but not in part, at its option on securitization-specific, designated dates. No payments of principal of the notes will be made during the revolving periods.
The following table includes the key terms under each of the Company’s securitizations as of December 31, 2025:
Dollars in thousands
Issue Date
Issue Amount
Debt Balance
Restricted Cash Reserves
Effective Interest Rate
Revolving Period End Date
Maturity Date
RMIT 2021-2
Jul 2021
Jul 2026
Aug 2033
RMIT 2021-3
Oct 2021
Sep 2026
Oct 2033
RMIT 2022-1
Feb 2022
Feb 2025
Mar 2032
RMIT 2024-1
Jun 2024
May 2027
Jul 2036
RMIT 2024-2
Nov 2024
Nov 2026
Dec 2033
RMIT 2025-1 (1)
Mar 2025
Mar 2027
Apr 2034
RMIT 2025-2 (2)
Oct 2025
Oct 2027
Nov 2037
Total
(1) In March 2025, the Company, its SPE, RMR III, and the Company’s indirect SPE, RMIT 2025-1, completed a private offering and sale of $ 265 million of asset-backed notes. The transaction consisted of the issuance of four classes of fixed-rate, asset-backed notes by RMIT 2025-1. The asset-backed notes are secured by finance receivables and other related assets that RMR III purchased from the Company, which RMR III then sold and transferred to RMIT 2025-1. Prior to maturity in April 2034, the Company may redeem the notes in full, but not in part, at its option on any note payment date on or after the payment date occurring in April 2027. No payments of principal of the notes will be made during the revolving period.
(2) In October 2025, the Company, its SPE, RMR III, and the Company’s indirect SPE, RMIT 2025-2, completed a private offering and sale of $ 253 million of asset-backed notes. The transaction consisted of the issuance of four classes of fixed-rate, asset-backed notes by RMIT 2025-2. The asset-backed notes are secured by finance receivables and other related assets that RMR III purchased from the Company, which RMR III then sold and transferred to RMIT 2025-2. Prior to maturity in November 2037, the Company may redeem the notes in full, but not in part, at its option on any note payment date on or after the payment date occurring in November 2027. No payments of principal of the notes will be made during the revolving period.
RMIT 2020-1 Securitization: In September 2020, the Company, its SPE, RMR III, and its indirect SPE, RMIT 2020-1, completed a private offering and sale of $ 180 million of asset-backed notes. In March 2025, the Company and RMR III exercised the right to make an optional principal repayment in full and, in connection with such prepayment, the securitization terminated.
RMIT 2021-1 Securitization: In February 2021, the Company, its SPE, RMR III, and the Company’s indirect SPE, RMIT 2021-1, completed a private offering and sale of $ 249 million of asset-backed notes. In October 2025, the Company and RMR III exercised the right to make an optional principal repayment in full and, in connection with such prepayment, the securitization terminated.
The Company’s debt arrangements are subject to certain covenants, including monthly and annual reporting, maintenance of specified interest coverage and debt ratios, restrictions on distributions, limitations on other indebtedness, and certain other restrictions. As of December 31, 2025, the Company was in compliance with all debt covenants.
The following is a summary of estimated future principal payments required on outstanding debt:
Dollars in thousands
Amount
Thereafter
Total
Regional Management Corp. | 2025 Annual Report on Form 10-K | 85
Table of Contents
Note 12. Stockholders’ Equity
Stock repurchase program: In December 2024, the Company announced that the Board had authorized a $ 30 million stock repurchase program. The authorization was effective immediately and extended through December 31, 2026 . In November 2025, the Company announced that the Board had approved a $ 30 million increase in the amount authorized under the stock repurchase program announced in December 2024, from $ 30 million to $ 60 million. The authorization was effective immediately and extends through June 30, 2027. As of December 31, 2025, the Company had repurchased 807 thousand shares of common stock at a total cost of $ 27.7 million , including commissions and estimated excise taxes, over the life of the program.
Share repurchases under the stock repurchase program may be made in the open market at prevailing market prices, through privately negotiated transactions, or through other structures in accordance with applicable federal securities laws, at times and in amounts as the Company’s management deems appropriate. The timing and the amount of any common stock repurchases will be determined by the Company’s management based on its evaluation of market conditions, the Company’s liquidity needs, legal and contractual requirements and restrictions (including covenants in the Company’s credit agreements), share price, and other factors. Repurchases of common stock may be made under a Rule 10b5-1 plan, which would permit common stock to be repurchased when the Company might otherwise be precluded from doing so under insider trading laws. The repurchase program does not obligate the Company to purchase any particular number of shares and may be suspended, modified, or discontinued at any time without prior notice.
The Company repurchased 702 thousand and 105 thousand shares of common stock for the years ended December 31, 2025 and 2024, respectively. The Company did no t repurchase any shares of common stock for the year ended December 31, 2023.
Quarterly cash dividend: The Board may in its discretion declare and pay cash dividends on the Company’s common stock. The following table presents the dividends declared per share of common stock for the periods indicated:
Year Ended December 31,
Dividends declared per common share
See Note 20, “Subsequent Events,” for information regarding the Company’s cash dividend following the end of the fiscal year.
Note 13. Fair Value Measurements
The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:
Cash and restricted cash: Cash and restricted cash is recorded at cost, which approximates fair value due to its highly liquid nature.
Restricted AFS investments: The fair value of U.S. Treasury securities is priced using an external pricing service which the Company corroborates using a secondary external vendor. For additional information on the Company's restricted AFS investments, see Note 5, “Restricted Available-for-Sale Investments.”
Net finance receivables: The Company determines the fair value of net finance receivables using a discounted cash flows methodology. The application of this methodology requires the Company to make certain estimates and judgments. These estimates and judgments include, but are not limited to, prepayment rates, default rates, loss severity, and risk-adjusted discount rates.
Debt: The Company estimates the fair value of debt using estimated credit marks based on an index of similar financial instruments (credit facilities) and projected cash flows from the underlying collateralized finance receivables (securitizations), each discounted using a risk-adjusted discount rate.
Certain of the Company’s assets estimated fair value are classified and disclosed in one of the following three categories:
Level 1 – Quoted market prices in active markets for identical assets or liabilities.
Level 2 – Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.
Level 3 – Unobservable inputs that are not corroborated by market data.
Regional Management Corp. | 2025 Annual Report on Form 10-K | 86
Table of Contents
In determining the appropriate levels, the Company performs an analysis of the assets and liabilities that are estimated at fair value. At each reporting period, all assets and liabilities for which the fair value measurement is based on significant unobservable inputs are classified as Level 3.
The following table includes the carrying amounts and estimated fair values of financial assets and liabilities disclosed but not carried at fair value:
December 31, 2025
December 31, 2024
Dollars in thousands
Carrying
Amount
Estimated
Fair Value
Carrying
Amount
Estimated
Fair Value
Assets
Level 1:
Cash
Restricted cash
Level 3:
Net finance receivables, less unearned insurance
premiums and allowance for credit losses
Liabilities
Level 3:
Debt
The following table includes the carrying amounts and estimated fair values of amounts the Company measures at fair value on a recurring basis:
December 31, 2025
December 31, 2024
Dollars in thousands
Carrying
Amount
Estimated
Fair Value
Carrying
Amount
Estimated
Fair Value
Assets
Level 2:
Restricted AFS investments
As of the periods indicated above, there were no financial assets or liabilities measured at fair value on a non-recurring basis.
Note 14. Income Taxes
The Company and its subsidiaries file a consolidated federal income tax return. The Company files consolidated or separate state income tax returns as required by individual states in which it operates. The Company is generally no longer subject to federal, state, or local income tax examinations by taxing authorities before 2021.
Income tax expense attributable to total income before income taxes consists of the following for the periods indicated:
Year Ended December 31,
Dollars in thousands
Current:
Federal
State and local
Deferred:
Federal
State and local
Total
Regional Management Corp. | 2025 Annual Report on Form 10-K | 87
Table of Contents
Income tax expense differed from the amount computed by applying the federal income tax rate to total income before income taxes as a result of the following:
Year Ended December 31,
Dollars in thousands
Federal tax expense at statutory rate
Increase (reduction) in income taxes resulting from:
State and local income tax , net of federal income tax effect (1)
Tax credits:
Research and development
Other
Nontaxable or nondeductible items:
Nondeductible compensation
Other
Unrecognized tax benefits
Other adjustments
Total
(1) In 2025, Texas, Illinois, and Virginia made up the majority of the tax effect in this category. In 2024, Texas, North Carolina, and South Carolina made up the majority of the tax effect in this category. In 2023, Texas made up the majority of the tax effect in this category.
Income taxes paid (net of refunds) consisted of the following jurisdictions for the periods indicated:
Year Ended December 31,
Dollars in thousands
Federal
State:
Texas
South Carolina
Illinois
Missouri
North Carolina
Alabama
Other
Total
Regional Management Corp. | 2025 Annual Report on Form 10-K | 88
Table of Contents
Net deferred tax assets and liabilities consist of the following as of the periods indicated:
December 31,
Dollars in thousands
Deferred tax assets:
Allowance for credit losses
Lease liability
Unearned insurance commissions
Share-based compensation
Accrued expenses
State net operating loss carryforward
Research and experimental expenditures
Unearned premium reserves
Other
Deferred tax assets
Deferred tax liabilities:
Fair market value adjustment of net finance receivables
Lease assets
Deferred loan costs
Depreciation and software amortization
Research and experimental expenditures
Prepaid expenses
Unearned premium reserves
Other
Deferred tax liabilities
Deferred tax assets (liabilities), net
The Company had a state net operating loss carryforward of approximately $ 66.0 million as of December 31, 2025 . These carryforwards are available to offset future taxable income. If not used, the carryforward will expire beginning in 2032 .
Companies are not permitted to recognize the tax benefit attributable to a tax position unless such position is more likely than not to be sustained upon examination by taxing authorities, based solely on the technical merits of the position. At December 31, 2025, the Company had $ 1.0 million of unrecognized tax benefits that, if recognized, would affect the effective tax rate. The Company recognizes interest and penalties accrued related to unrecognized tax benefits in the income tax line of the consolidated statements of comprehensive income. The Company recognized approximately $ 42 thousand , $ 0.1 million , and $ 0.1 million of interest and penalties for the years ended December 31, 2025, 2024, and 2023, respectively.
The following schedule reconciles unrecognized tax positions for the periods indicated:
As of and for the Year Ended December 31,
Dollars in thousands
Beginning balance
Additions based on tax positions related to the current year
Additions for tax positions of prior years
Reductions for tax positions of prior years
Ending balance
Regional Management Corp. | 2025 Annual Report on Form 10-K | 89
Table of Contents
Note 15. Earnings Per Share
The following schedule reconciles the computation of basic and diluted earnings per share for the periods indicated:
Year Ended December 31,
Dollars in thousands, except per share amounts
Numerator:
Net income
Denominator:
Weighted-average shares outstanding for basic earnings per share
Effect of dilutive securities
Weighted-average shares adjusted for dilutive securities
Earnings per share:
Basic
Diluted
The Company excluded outstanding shares of common stock totaling 37 thousand , 0.2 million , and 0.4 million for the years ended December 31, 2025, 2024, and 2023 , respectively, from the computation of diluted earnings per share because they were anti-dilutive.
Note 16. Share-Based Compensation
On May 16, 2024, the stockholders of the Company approved the 2024 Plan. As of December 31, 2025 , subject to adjustments as provided in the 2024 Plan, the maximum aggregate number of shares of the Company’s common stock that could be issued under the 2024 Plan could not exceed the sum of (i) 381,000 shares plus (ii) any shares remaining available for the grant of awards as of May 16, 2024 under the 2015 Plan, plus (iii) any shares subject to an award granted under the 2015 Plan which award is forfeited, cash-settled, cancelled, terminated, expires, or lapses for any reason after May 16, 2024 without the issuance of shares or pursuant to which such shares are forfeited (subject to adjustment for anti-dilution purposes as provided in the 2024 Plan). Of the amount described in the preceding sentence, no more than 381,000 shares may be issued under the 2024 Plan pursuant to the grant of incentive stock options (subject to adjustment for anti-dilution purposes). As of December 31, 2025, there were 0.5 million shares available for grant under the 2024 Plan.
For the years ended December 31, 2025, 2024, and 2023, the Company recorded share-based compensation expense of $ 11.9 million , $ 11.2 million , and $ 11.8 million , respectively. As of December 31, 2025, unrecognized share-based compensation expense to be recognized over future periods approximated $ 11.3 million . This amount will be recognized as expense over a weighted-average period of 1.6 years. Share-based compensation expenses are recognized on a straight-line basis over the requisite service period of the agreement. All share-based compensation is classified as equity awards. For the years ended December 31, 2025 and 2024, share-based compensation of $ 0.5 million and $ 0.8 million , respectively, was capitalized as software. There was no capitalization of share-based compensation for the year ended December 31, 2023.
The following are the terms and amounts of the awards issued under the Company’s share-based incentive programs:
Nonqualified stock options: The following table summarizes the stock option activity for the year ended December 31, 2025:
Dollars and shares in thousands, except per share amounts
Number of Shares
Weighted-Average Exercise Price
Per Share
Weighted-Average Remaining Contractual
Life (Years)
Aggregate Intrinsic Value
Options outstanding at beginning of period
Granted
Exercised
Forfeited
Expired
Options outstanding at end of period
Options exercisable at end of period
Regional Management Corp. | 2025 Annual Report on Form 10-K | 90
Table of Contents
The following table provides additional stock option information for the periods indicated:
Year Ended December 31,
Dollars in thousands, except per share amounts
Weighted-average grant date fair value per share
Intrinsic value of options exercised
Fair value of stock options that vested
Performance restricted stock units: The following are the weighted-average assumptions for the PRSU grants for the periods indicated:
Year Ended December 31,
Expected volatility
Risk-free rate
Discount for post-vesting restrictions
The following table summarizes PRSU activity for the year ended December 31, 2025:
Dollars and units in thousands, except per unit amounts
Units
Weighted-Average
Grant Date
Fair Value Per Unit
Non-vested units at beginning of period
Granted
Performance adjustment
Vested
Forfeited
Non-vested units at end of period
The following table provides additional PRSU information for the periods indicated:
Year Ended December 31,
Dollars in thousands, except per unit amounts
Weighted-average grant date fair value per unit
Fair value of PRSUs that vested
Performance-contingent restricted stock units: There was no performance-contingent RSU balance or activity for the year ended December 31, 2025. The following table provides additional performance-contingent RSU information for the periods indicated:
Year Ended December 31,
Dollars in thousands, except per unit amounts
Weighted-average grant date fair value per unit
Fair value of RSUs that vested
Restricted stock units: The following table summarizes service-based RSU activity for the year ended December 31, 2025:
Dollars and units in thousands, except per unit amounts
Units
Weighted-Average
Grant Date
Fair Value Per Unit
Non-vested units at beginning of period
Granted
Vested
Forfeited
Non-vested units at end of period
Regional Management Corp. | 2025 Annual Report on Form 10-K | 91
Table of Contents
The following table provides additional service-based RSU information for the periods indicated:
Year Ended December 31,
Dollars in thousands, except per unit amounts
Weighted-average grant date fair value per unit
Fair value of RSUs that vested
Restricted stock awards: The following table summarizes RSA activity for the year ended December 31, 2025:
Dollars and shares in thousands, except per share amounts
Shares
Weighted-Average
Grant Date
Fair Value Per Share
Non-vested shares at beginning of period
Granted
Vested
Forfeited
Non-vested shares at end of period
The following table provides additional RSA information for the periods indicated:
Year Ended December 31,
Dollars in thousands, except per share amounts
Weighted-average grant date fair value per share
Fair value of RSAs that vested
Note 17. Commitments and Contingencies
In the normal course of business, the Company has been named as a defendant in legal actions in connection with its activities. Some of the actual or threatened legal actions include claims for compensatory damages or claims for indeterminate amounts of damages. The Company contests liability and the amount of damages, as appropriate, in each pending matter.
Where available information indicates that it is probable that a liability has been incurred and the Company can reasonably estimate the amount of that loss, the Company accrues the estimated loss by a charge to net income.
However, in many legal actions, it is inherently difficult to determine whether any loss is probable, or even reasonably possible, or to estimate the amount of loss. This is particularly true for actions that are in their early stages of development or where plaintiffs seek indeterminate damages. In addition, even where a loss is reasonably possible or an exposure to loss exists in excess of the liability already accrued, it is not always possible to reasonably estimate the size of the possible loss or range of loss. Before a loss, additional loss, range of loss, or range of additional loss can be reasonably estimated for any given action, numerous issues may need to be resolved, including through lengthy discovery, following determination of important factual matters, and/or by addressing novel or unsettled legal .
For certain other legal actions, the Company can estimate reasonably possible losses, additional losses, ranges of loss, or ranges of additional loss in excess of amounts accrued, but the Company does not believe, based on current knowledge and after consultation with counsel, that such losses will have a material adverse effect on the consolidated financial statements.
While the Company will continue to identify legal actions where it believes a material loss to be reasonably possible and reasonably estimable, there can be no assurance that material losses will not be incurred from claims that the Company has not yet been notified of or are not yet determined to be probable, or reasonably possible and reasonable to estimate.
The Company expenses legal costs as they are incurred.
Regional Management Corp. | 2025 Annual Report on Form 10-K | 92
Table of Contents
Note 18. Insurance Products and Reinsurance of Certain Risks
RMC Reinsurance, Ltd. is a wholly owned insurance subsidiary of the Company. The Company sells optional insurance products to its customers in connection with its lending operations. These optional products include credit life, credit accident and health, credit property, vehicle single interest, and credit involuntary unemployment insurance. The type and terms of our optional insurance products vary from state to state based on applicable laws and regulations. Insurance premiums are remitted to an unaffiliated company that issues the policy to the customer. This unaffiliated company cedes the premiums to RMC Reinsurance, Ltd. Life insurance premiums are ceded to the Company as written and non-life products are ceded as earned. Unearned insurance premiums represent insurance premiums, net of premiums held by the unaffiliated insurance underwriter, that will be earned over the terms of the policies.
The Company maintains a restricted reserve comprised of restricted cash and restricted AFS investments for life insurance claims in an amount determined by the ceding company. At December 31, 2025 and 2024, the restricted reserves consisted of $ 23.1 million and $ 21.2 million of unearned premium reserves, respectively, and $ 1.4 million and $ 1.2 million of unpaid claim reserves, respectively. For non-life products, the Company had no unpaid claim reserves at both December 31, 2025 and 2024, as changes in claim reserves are settled between the Company and the unaffiliated insurance underwriter as they are incurred. For the year ended December 31, 2025, non-life unpaid claim reserves, included in insurance income, net as presented in the table below, decreased $ 1.0 million . For the year ended December 31, 2024, non-life unpaid claim reserves increased $ 0.8 million , and decreased $ 0.2 million for the year ended December 31, 2023.
Insurance income, net consists primarily of earned premiums, net of certain direct costs, from the sale of various optional payment and collateral protection insurance products offered to customers who obtain loans directly from the Company. Earned premiums are accounted for over the period of the underlying reinsured policies using assumptions consistent with the policy terms. Direct costs included in insurance income, net are claims paid, changes in claims reserves, ceding fees, and premium taxes paid. The Company does not allocate to insurance income, net, any other head office or branch administrative costs associated with managing its insurance operations, managing its captive insurance company, marketing and selling insurance products, legal and compliance review, or internal audits.
The following table summarizes the components of insurance income, net for the periods indicated:
Year Ended December 31,
Dollars in thousands
Earned premiums
Claims, reserves, and certain direct expenses
Insurance income, net
Apart from the various optional payment and collateral protection insurance products that the Company offers to customers, on certain loans, the Company also collects a fee from customers and, in turn, purchases non-file insurance from an unaffiliated insurance company for its benefit in lieu of recording and perfecting its security interest in personal property collateral. Non-file insurance protects the Company from credit losses where, following an event of default, it is unable to take possession of personal property collateral because its security interest is not perfected (for example, in certain instances where a customer files for bankruptcy). In such circumstances, non-file insurance generally will pay to the Company an amount equal to the lesser of the loan balance or the collateral value.
Note 19. Segment Reporting
The Company has one reportable segment: consumer finance. The Company allocates resources and assesses financial performance on a consolidated basis because its product offerings require similar technology and marketing strategies, and do not significantly
Regional Management Corp. | 2025 Annual Report on Form 10-K | 93
Table of Contents
differ on the bases of geographic areas and/or related regulatory environments. The Company’s chief executive officer is the CODM and is responsible for allocating resources and assessing financial performance.
Consolidated net income is the measure used by the CODM in evaluating the segment profit or loss of the Company. The CODM either reviews or is otherwise regularly provided with amounts for the following measures in the Company’s financial results for the periods indicated:
Year Ended December 31,
Dollars in thousands
Interest income
Fee income
Insurance income, net
Other income
Provision for credit losses
Share-based compensation expense
Depreciation and amortization expense
Interest expense
Income tax expense
The following table presents the Company’s revenues from external customers for each significant product and service for the periods indicated:
Year Ended December 31,
Dollars in thousands
Large loans
Small loans
Interest and fee income
Insurance income, net
Other income
Total revenue
As part of the CODM’s review and evaluation process for allocating resources, the CODM is provided with consolidated expenses and total assets as noted on the face of the Company’s Consolidated Statements of Comprehensive Income and Consolidated Balance Sheets, respectively.
The Company’s balance sheet expenditures for long-lived assets either reviewed by the CODM or otherwise regularly provided to the CODM are included in the Company’s Consolidated Statements of Cash Flows. These expenditures are represented as “Purchases of intangible assets,” “Purchases of property and equipment,” and “Operating leases paid” within the referenced statements.
The Company operates in the consumer finance industry within the United States and, therefore, does not have any customer concentration or international operations. See Note 3, “Concentrations of Credit Risk,” for additional information regarding the risks relating to geographic concentration.
Note 20. Subsequent Events
Quarterly cash dividend: In February 2026 , the Company announced that the Board declared a quarterly cash dividend of $ 0.30 per share. The dividend will be paid on March 12, 2026 to shareholders of record at the close of business on February 19, 2026 . The declaration, amount, and payment of any future cash dividends on shares of the Company’s common stock will be at the discretion of the Board.
Regional Management Corp. | 2025 Annual Report on Form 10-K | 94
Table of Contents
