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Regional Management Corp. (RM - Snapshot Report) reported net income of 52 cents for second quarter of 2013, in line with the Zacks Consensus Estimate as well as year ago earnings.

Net income increased slightly by 0.5% year over year to $6.7 million in the second quarter.

Quarter in Details

Regional Management generated $39.4 million in total revenue in the second quarter of 2013, improving 23.0% year over year. Improvement stemmed from higher interest and fee income, insurance income and other income. Results were in-line with the Zacks Consensus Estimate.

Same-store revenue increased 17.2% year over year in the reported quarter. Same-store finance receivables increase 22.4% year over year.

In the quarter under review, Regional Management opened 29 de novo branches and acquired 2 branches. As of June 30, 2013, Regional Management operated in 263 locations.

General and administrative expenses totaled $17.2 million, up 29.5% year over year. The increase was attributable to higher personnel costs due to new stores and higher advertising costs.

Total expense of Regional Management escalated nearly 34% year over year to $28.8 million.

Financial Update

Regional Management ended the quarter with cash balance of $2.9 million, down from $3.3 million at 2012 end.

As of Jun 30, 2013, finance receivables totaled $460.4 million, up 33.3% year over year. Annualized net charge-offs as a percentage of average finance receivables were 6.7% in the reported quarter, up from 6.1% in year-ago quarter.
Finance receivables outstanding at reported quarter end were $460.4 million, up 33.3% year over year. The increase was attributable to new branch additions over the year, as well as increase in same-store finance receivables.

Senior revolving credit facility was $302.2 million as of Jun 30, 2013, up from $292.4 million as of Dec 31, 2013.

On May 14, 2013, availability of the company’s senior revolving credit facility increased to $500 million from $325 million, with maturity in May 2016.

Performance of other consumer loan providers

Capital One Financial Corp.’s (COF - Analyst Report) second-quarter 2013 earnings of $1.87 per share surpassed the Zacks Consensus Estimate of $1.74. Moreover, this was above $1.79 earned in the prior-year quarter.

Discover Financial Services (DFS - Analyst Report) reported second-quarter 2013 earnings per share (EPS) of $1.20, surpassing the Zacks Consensus Estimate of $1.16. EPS also surpassed the year-ago quarter’s earnings of 99 cents.

SLM Corporation (SLM - Analyst Report) – commonly known as Sallie Mae – reported second-quarter 2013 core earnings of $1.02 per share, ahead of the Zacks Consensus Estimate of 69 cents. Results also compared favorably with the year-ago core earnings of 49 cents.

Zacks Rank

Regional Management carries a Zacks Rank #3 (Hold).

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