Regional Management Corp. (NYSE:RM) Q1 2019 Earnings Conference Call Transcript

May 08, 2019 • 05:00 pm ET


Regional Management Corp. (NYSE:RM) Q1 2019 Earnings Conference Call Transcript


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Thank you for standing by. This is the conference operator. Welcome to the Regional Management First Quarter 2019 Earnings Conference Call. As a reminder, all participants are in listen-only mode and the conference is being recorded. (Operator Instructions)

I would now like to turn the conference over to Garrett Edson, Senior VP, ICR. Please go ahead.

Garrett Edson

Thank you, and good afternoon. By now, everyone should have access to our earnings announcement and slide presentation, which was released prior to this call, and which may also be found on our website at Before we begin our formal remarks, I need to remind everyone that part of our discussion today may include forward-looking statements, which are based on the expectations, estimates and projections of management as of today. The forward-looking statements in our discussion are subject to various assumptions, risks, uncertainties and other factors that are difficult to predict and which could cause actual results to differ materially from those expressed or implied in the forward-looking statements. These statements are not guarantees of future performance, and therefore, undue reliance should not be placed upon them.

We refer all of you to our recent filings with the SEC for a more detailed discussion of the risks and uncertainties that could impact the future operating results and financial condition of Regional Management. We disclaim any intentions or obligations to update or revise any forward-looking statements, except to the extent required by applicable law.

I would now like to introduce Peter Knitzer, President and CEO of Regional Management Corp.

Peter Knitzer

Thanks, Garrett, and welcome to our first quarter 2019 earnings call. As always, I want to thank everyone for participating this afternoon and for your continued interest in our Company. I'm here with our Executive Vice President and CFO, Don Thomas, who will speak later on the call. For those of you with access to a computer or mobile device, we've once again posted a supplemental presentation on our website at to provide additional color to our remarks.

We opened 2019 with another quarter of double-digit receivable and topline growth, speaking to the inherent strength of our underlying business. In addition, we completed the implementation of our custom scorecards and remained disciplined in managing our expenses. For the first quarter, we reported diluted EPS of $0.67 versus $0.72 in the prior-year period. While we continued our streak of robust double-digit year-over-year receivable growth, let me provide some context for the reduction in overall year-over-year results.

As we noted on our fourth quarter call, we initiated credit tightening actions and have been implementing custom underwriting scorecards in our branches. By the end of the first quarter of 2019, we have completed the custom scorecard rollout across the entire branch network. Given the benign macro environment, had we left the prior credit underwriting criteria in place, our near-term earnings would have benefited significantly from our continued strong underlying trends. However, in interest of prudent risk management, we felt the best long-term decision for the Company was to